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The Effect of Protest Votes on the Estimates of WTP for Use Values of Recreational Sites

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  • Elisabetta Strazzera

    ()

  • Margarita Genius
  • Riccardo Scarpa
  • George Hutchinson

Abstract

Contingent valuation studies are often characterized by a considerable number of protest responses, which may cause selectivity bias on the final estimates for WTP. Sample selection models can detect and – if necessary – correct selectivity bias. In economic applications where the relevant dependent variable is continuous, sample selection models are generally estimated using Heckman's 2-step method rather than the FIML estimator. Either method has its own drawback: computational complexity for the FIML method, susceptibility to collinearity problems for the 2-step method. Using data on valuation of forest resources for recreational use, we analyse the performance of the two estimators. In this application, given the presence of some collinearity, the FIML is preferred to the 2-step method. A procedure is outlined to deal with selectivity problems in similar settings. Copyright Kluwer Academic Publishers 2003

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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): 25 (2003)
Issue (Month): 4 (August)
Pages: 461-476

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Handle: RePEc:kap:enreec:v:25:y:2003:i:4:p:461-476

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

Related research

Keywords: contingent valuation; FIML; protest responses; sample selection; 2-step method;

References

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  1. Timothy Haab, 1999. "Nonparticipation or Misspecification? The Impacts of Nonparticipation on Dichotomous Choice Contingent Valuation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 14(4), pages 443-461, December.
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  7. Elisabetta Strazzera & Riccardo Scarpa & Pinuccia Calia & Guy Garrod & Kenneth Willis, 2003. "Modelling zero values and protest responses in contingent valuation surveys," Applied Economics, Taylor & Francis Journals, vol. 35(2), pages 133-138.
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  16. Cameron Trudy Ann & Quiggin John, 1994. "Estimation Using Contingent Valuation Data from a Dichotomous Choice with Follow-Up Questionnaire," Journal of Environmental Economics and Management, Elsevier, vol. 27(3), pages 218-234, November.
  17. Trudy Ann Cameron, 1991. "Interval Estimates of Non-Market Resource Values from Referendum Contingent Valuation Surveys," Land Economics, University of Wisconsin Press, vol. 67(4), pages 413-421.
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  19. Shyamsundar, Priya & Kramer, Randall A., 1996. "Tropical Forest Protection: An Empirical Analysis of the Costs Borne by Local People," Journal of Environmental Economics and Management, Elsevier, vol. 31(2), pages 129-144, September.
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