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Nonparticipation or Misspecification? The Impacts of Nonparticipation on Dichotomous Choice Contingent Valuation

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  • Timothy Haab

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Abstract

Dichotomous choice (or Referendum) contingent valuation surveys have become the predominate choice for valuing goods and services otherwise not valued in a standard market (nonmarket goods and services). A number of researchers have recently recommended that dichotomous choice contingent valuation studies include a follow-up question to all no responses to determine whether the no response is a result of unwillingness to pay, or nonparticipation. If the goal of the study is to investigate the impact of covariates on either mean willingness to pay or the probability of nonparticipation, simple identification of indifferent individuals will not suffice. A simulation study shows that existing econometric models designed to account for nonparticipation are extremely sensitive to misspecification bias. Accurate identification of the probability of nonparticipation is hampered by potential misspecification of the distribution of willingness to pay. Copyright Kluwer Academic Publishers 1999

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Bibliographic Info

Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 14 (1999)
Issue (Month): 4 (December)
Pages: 443-461

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Handle: RePEc:kap:enreec:v:14:y:1999:i:4:p:443-461

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Web page: http://www.springerlink.com/link.asp?id=100263

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  1. Cameron, Trudy Ann, 1988. "A new paradigm for valuing non-market goods using referendum data: Maximum likelihood estimation by censored logistic regression," Journal of Environmental Economics and Management, Elsevier, vol. 15(3), pages 355-379, September.
  2. Bengt Kristrom, 1990. "A Non-Parametric Approach to the Estimation of Welfare Measures in Discrete Response Valuation Studies," Land Economics, University of Wisconsin Press, vol. 66(2), pages 135-139.
  3. An, Mark Y. & Roberto Ayala, 1995. "A Mixture Model of Willingness to Pay Distributions," Working Papers 95-21, Duke University, Department of Economics.
  4. McConnell, K. E., 1990. "Models for referendum data: The structure of discrete choice models for contingent valuation," Journal of Environmental Economics and Management, Elsevier, vol. 18(1), pages 19-34, January.
  5. Timothy C. Haab & Kenneth E. McConnell, 1998. "Referendum Models and Economic Values: Theoretical, Intuitive, and Practical Bounds on Willingness to Pay," Land Economics, University of Wisconsin Press, vol. 74(2), pages 216-229.
  6. Richard Carson & Robert Mitchell & Michael Hanemann & Raymond Kopp & Stanley Presser & Paul Ruud, 2003. "Contingent Valuation and Lost Passive Use: Damages from the Exxon Valdez Oil Spill," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 25(3), pages 257-286, July.
  7. John W. Duffield & David A. Patterson, 1991. "Inference and Optimal Design for a Welfare Measure in Dichotomous Choice Contingent Valuation," Land Economics, University of Wisconsin Press, vol. 67(2), pages 225-239.
  8. Haab, Timothy C. & McConnell, Kenneth E., 1997. "Referendum Models and Negative Willingness to Pay: Alternative Solutions," Journal of Environmental Economics and Management, Elsevier, vol. 32(2), pages 251-270, February.
  9. Carson Richard T. & Mitchell Robert Cameron, 1995. "Sequencing and Nesting in Contingent Valuation Surveys," Journal of Environmental Economics and Management, Elsevier, vol. 28(2), pages 155-173, March.
  10. Richard C. Ready & Dayuan Hu, 1995. "Statistical Approaches to the Fat Tail Problem for Dichotomous Choice Contingent Valuation," Land Economics, University of Wisconsin Press, vol. 71(4), pages 491-499.
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Citations

RePEc Biblio mentions

As found on the RePEc Biblio, the curated bibliography for Economics:
  1. > Environmental and Natural Resource Economics > Environmental Economics > Valuation > Contingent valuation method > Question format and econometric issues
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Cited by:
  1. John C. Whitehead & William B. Clifford & Thomas J. Hoban, 2000. "“Willingness to Pay for a Coastal Recreational Fishing License: A Comparison of North Carolina Angler Groups,”," Working Papers 0009, East Carolina University, Department of Economics.
  2. van der Heide, C. Martijn & van den Bergh, Jeroen C.J.M. & van Ierland, Ekko C. & Nunes, Paulo A.L.D., 2008. "Economic valuation of habitat defragmentation: A study of the Veluwe, the Netherlands," Ecological Economics, Elsevier, vol. 67(2), pages 205-216, September.
  3. Birol, Ekin & Koundouri, Phoebe & Kountouris, Yiannis, 2007. "Using the contingent valuation method to inform sustainable wetland management: the case of the Akrotiri wetland in Cyprus," MPRA Paper 38430, University Library of Munich, Germany.
  4. Johannes Diederich & Timo Goeschl, 2014. "Willingness to Pay for Voluntary Climate Action and Its Determinants: Field-Experimental Evidence," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 57(3), pages 405-429, March.
  5. Birol, Ekin & Das, Sukanya, 2010. "Valuing the environment in developing countries: Modeling the impact of distrust in public authorities' ability to deliver public services on the citizens' willingness to pay for improved environmenta," IFPRI discussion papers 1043, International Food Policy Research Institute (IFPRI).
  6. Carlsson, Fredrik & Kataria, Mitesh, 2006. "Assessing management options for weed control with demanders and non-demanders in a choice experiment," Working Papers in Economics 208, University of Gothenburg, Department of Economics.
  7. Fredrik Carlsson & Mitesh Kataria & Elina Lampi, 2009. "Dealing with ignored attributes in choice experiments on valuation of Sweden's environmental quality objectives," Jena Economic Research Papers 2009-089, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  8. Kaneko, Naoya & Chern, Wen S., 2003. "Consumer Acceptance Of Genetically Modified Foods: A Telephone Survey," 2003 Annual meeting, July 27-30, Montreal, Canada 21999, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  9. Mosi Rosenboim & Tal Shavit, 2012. "Whose money is it anyway? Using prepaid incentives in experimental economics to create a natural environment," Experimental Economics, Springer, vol. 15(1), pages 145-157, March.
  10. Andersson, Henrik & Hammitt, James & Lindberg, Gunnar & Sundström, Kristian, 2011. "Willingness to Pay and Sensitivity to Time Framing: A Theoretical Analysis and an Application on Car Safety," LERNA Working Papers 11.20.354, LERNA, University of Toulouse.
  11. Carson, Richard T. & Hanemann, W. Michael, 2006. "Contingent Valuation," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 17, pages 821-936 Elsevier.
  12. Elisabetta Strazzera & Margarita Genius & Riccardo Scarpa & George Hutchinson, 2003. "The Effect of Protest Votes on the Estimates of WTP for Use Values of Recreational Sites," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 25(4), pages 461-476, August.
  13. Hu, Wuyang, 2006. "Use of Spike Models in Measuring Consumers' Willingness to Pay for Non-GM Oil," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 38(03), December.
  14. Ekin Birol & Sukanya Das, 2010. "Valuing the Environment in Developing Countries: Modeling the Impact of Distrust in Public Authorities’ Ability to Deliver on the Citizens’ Willingness to Pay for Improved Environmental Quality," Working Papers 2010-055, Madras School of Economics,Chennai,India.
  15. 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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