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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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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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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Richard T. Carson & Robert Cameron Mitchell & Michael Hanemann & Raymond J. Kopp & Stanley Presser & Paul Ruud, 1995. "Contingent Valuation and Lost Passive Use: Damages from the Exxon Valdez," University of California at San Diego, Economics Working Paper Series 95-02, Department of Economics, UC San Diego.
  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. [Downloadable!] (restricted)
  3. 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. [Downloadable!] (restricted)
  4. 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. [Downloadable!] (restricted)
  5. 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. [Downloadable!] (restricted)
  6. 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. [Downloadable!] (restricted)
  7. 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. [Downloadable!] (restricted)
  8. W. Michael HANEMANN & Barbara KANNINEN, 1996. "The Statistical Analysis Of Discrete-Response Cv Data," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series 798, Department of Agricultural & Resource Economics, UC Berkeley. [Downloadable!]
  9. 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. [Downloadable!] (restricted)
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  10. Hanemann, William Michael & Kanninen, Barbara Joan, 1996. "The statistical analysis of discrete-response CV data," CUDARE Working Paper Series 798, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy. [Downloadable!]
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. 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). [Downloadable!]
  2. 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, Göteborg University, Department of Economics. [Downloadable!]
    Other versions:
  3. 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. [Downloadable!]
  4. 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. [Downloadable!] (restricted)
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