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Dichotomous-choice contingent valuation with 'dont know' responses and misreporting

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  • Kelvin Balcombe

    (Department of Agricultural and Food Economics, University of Reading, Reading, UK)

  • Iain Fraser

    (School of Economics, University of Kent, UK)

Abstract

A new approach is presented that simultaneously deals with Misreporting and Don't Know (DK) responses within a dichotomous-choice contingent valuation framework. Utilising a modification of the standard Bayesian Probit framework, a Gibbs with Metropolis-Hastings algorithm is used to estimate the posterior densities for the parameters of interest. Several model specifications are applied to two contingent valuation datasets: one on wolf management plans, and one on the US Fee Demonstration Program. We find that DKs are more likely to be from people who would be predicted to have positive utility for the bid. Therefore, a DK is more likely to be a YES than a NO. We also find evidence of misreporting, primarily in favour of the NO option. The inclusion of DK responses has an unpredictable impact on willingness-to-pay estimates, since it impacts differently on the results for the two datasets we examine. Copyright © 2009 John Wiley & Sons, Ltd.

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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Journal of Applied Econometrics.

Volume (Year): 24 (2009)
Issue (Month): 7 ()
Pages: 1137-1152

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Handle: RePEc:jae:japmet:v:24:y:2009:i:7:p:1137-1152

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  1. K. Balcombe & A. Bailey & A. Chalak & I. Fraser, 2007. "Bayesian Estimation of Willingness-to-pay Where Respondents Mis-report Their Preferences," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 69(3), pages 413-438, 06.
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  5. Alberini, Anna & Boyle, Kevin & Welsh, Michael, 2003. "Analysis of contingent valuation data with multiple bids and response options allowing respondents to express uncertainty," Journal of Environmental Economics and Management, Elsevier, vol. 45(1), pages 40-62, January.
  6. Haener, Michel K. & Adamowicz, Wiktor L., 1998. "Analysis Of "Don'T Know" Response To Referendum Contingent Valuation Questions," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 27(2), October.
  7. Champ, Patricia A. & Bishop, Richard C. & Brown, Thomas C. & McCollum, Daniel W., 1997. "Using Donation Mechanisms to Value Nonuse Benefits from Public Goods," Journal of Environmental Economics and Management, Elsevier, vol. 33(2), pages 151-162, June.
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  10. Catherine Chambers & John Whitehead, 2003. "A Contingent Valuation Estimate of the Benefits of Wolves in Minnesota," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 26(2), pages 249-267, October.
  11. Arana, Jorge E. & Leon, Carmelo J., 2005. "Flexible mixture distribution modeling of dichotomous choice contingent valuation with heterogenity," Journal of Environmental Economics and Management, Elsevier, vol. 50(1), pages 170-188, July.
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  14. Steven B. Caudill & Franklin G. Mixon, 2005. "Analysing Misleading Discrete Responses: A Logit Model Based on Misclassified Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 67(1), pages 105-113, 02.
  15. Wang, Hua, 1997. "Treatment of "Don't-Know" Responses in Contingent Valuation Surveys: A Random Valuation Model," Journal of Environmental Economics and Management, Elsevier, vol. 32(2), pages 219-232, February.
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Cited by:
  1. Kelvin Balcombe & Aurelia Samuel & Iain Fraser, 2009. "Estimating WTP With Uncertainty Choice Contingent Valuation," Studies in Economics 0921, Department of Economics, University of Kent.

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