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Correcting for the endogeneity of pro-environment behavioral choices in contingent valuation

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  • Martínez-Espiñeira, Roberto
  • Lyssenko, Nikita

Abstract

In contingent valuation studies, observed behavioral choices often enter as independent variables in the willingness to pay function. However, these variables may be endogenously determined when the error term in the behavioral model is correlated with the error term in the willingness to pay model. We investigate the effects of correcting for the endogeneity of a variable, namely membership status in environmental organizations that proxies unobservable characteristics of the respondents. Jointly modeling the membership variable and the willingness to pay response yields an estimate for the effect of the former that contradicts previous findings but is intuitive and agrees with theoretical expectations.

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Bibliographic Info

Article provided by Elsevier in its journal Ecological Economics.

Volume (Year): 70 (2011)
Issue (Month): 8 (June)
Pages: 1435-1439

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Handle: RePEc:eee:ecolec:v:70:y:2011:i:8:p:1435-1439

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Web page: http://www.elsevier.com/locate/ecolecon

Related research

Keywords: Contingent valuation Environmental attitudes Bivariate probit Endogeneity Whales;

References

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Cited by:
  1. Christopher Jeffords, 2014. "Preference-directed regulation when ethical environmental policy choices are formed with limited information," Empirical Economics, Springer, vol. 46(2), pages 573-606, March.

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