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Comparing continuous and discrete contingent valuation questions

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Author Info
Bengt Kriström
Abstract

This paper explores two commonly used methods to elicit an individual's willingness to pay (WTP) for a public good in contingent valuation studies. Currently, the most preferred method is the “take-it-or-leave” valuation question, or discrete valuation question (DVQ), where the respondent accepts or rejects a suggested cost for the good. The traditional method, the continuous valuation question (CVQ), simply asks an individual to state his WTP for the suggested change in the provision of a public good like cleaner air. We introduce a simple way to compare the results from these two methods. We also test the anchoring behavior suggested in the psychological literature on choice under uncertainty. The results do not support the anchoring hypothesis, but suggest the hypothesis that people perceive the two tested valuation questions differently. Copyright Kluwer Academic Publishers 1993

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File URL: http://hdl.handle.net/10.1007/BF00338320
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Article provided by European Association of Environmental and Resource Economists in its journal Environmental & Resource Economics.

Volume (Year): 3 (1993)
Issue (Month): 1 (February)
Pages: 63-71
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Handle: RePEc:kap:enreec:v:3:y:1993:i:1:p:63-71

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Related research
Keywords: Contingent valuation; valuation questions; anchoring; non-parametrics;

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References listed on IDEAS
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. Walsh, Richard G. & Johnson, Donn M. & McKean, John R., 1989. "Issues In Nonmarket Valuation And Policy Application: A Retrospective Glance," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 14(01), July. [Downloadable!]
  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. Hoehn, John P. & Randall, Alan, 1987. "A satisfactory benefit cost indicator from contingent valuation," Journal of Environmental Economics and Management, Elsevier, vol. 14(3), pages 226-247, September. [Downloadable!] (restricted)
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  1. Smith, V. Kerry & Huang, Ju-Chin, 1997. "Monte Carlo Benchmarks for Discrete Response Valuation Methods," Discussion Papers dp-97-23, Resources For the Future. [Downloadable!]
  2. P. Frykblom & Jason Shogren, 2000. "An Experimental Testing of Anchoring Effects in Discrete Choice Questions," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 16(3), pages 329-341, July. [Downloadable!] (restricted)
  3. Carlsson, Fredrik & Martinsson, Peter, 2006. "Do Experience and Cheap Talk influence Willingness to Pay in an Open-Ended Contingent Valuation Survey?," Working Papers in Economics 190, Göteborg University, Department of Economics. [Downloadable!]
  4. Munro, Alistair, 2007. "When is some number really better than no number? On the optimal choice between non-market valuation methods," MPRA Paper 8978, University Library of Munich, Germany. [Downloadable!]
  5. Carlsson, Fredrik & Köhlin, Gunnar & Mekonnen, Alemu, 2004. "Contingent valuation of community plantations in Ethiopia: a look into value elicitation formats and intra-household preference variations," Working Papers in Economics 151, Göteborg University, Department of Economics. [Downloadable!]
  6. John Whitehead & Ju-Chin Huang & Glenn Blomquist & Richard Ready, 1998. "Construct Validity of Dichotomous and Polychotomous Choice Contingent Valuation Questions," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 11(1), pages 107-116, January. [Downloadable!] (restricted)
    Other versions:
  7. Sund, Björn, 2009. "Certainty calibration in contingent valuation - exploring the within-difference between dichotomous choice and open-ended answers as a certainty measure," Working Papers 2009:1, Örebro University, Swedish Business School. [Downloadable!]
  8. Stina Hökby & Tore Söderqvist, 2003. "Elasticities of Demand and Willingness to Pay for Environmental Services in Sweden," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 26(3), pages 361-383, November. [Downloadable!] (restricted)
  9. Ricardo Faria & Raul Matsuhita & Jorge Nogueira & Benjamin Tabak, 2007. "Realism Versus Statistical Efficiency: A Note on Contingent Valuation with Follow-up Queries," Atlantic Economic Journal, International Atlantic Economic Society, vol. 35(4), pages 451-462, December. [Downloadable!] (restricted)
  10. Ian Langford & Ian Bateman & Hugh Langford, 1996. "A multilevel modelling approach to triple-bounded dichotomous choice contingent valuation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 7(3), pages 197-211, April. [Downloadable!] (restricted)
  11. Carlsson, Fredrik & Martinsson, Peter, 2004. "Willingness to Pay among Swedish Households to Avoid Power Outages - A Random Parameter Tobit Model Approach," Working Papers in Economics 154, Göteborg University, Department of Economics. [Downloadable!]
    Other versions:
  12. Carlsson, Fredrik & Martinsson, Peter & Akay, Alpaslan, 2009. "The Effect of Power Outages and Cheap Talk on Willingness to Pay to Reduce Outages," IZA Discussion Papers 4307, Institute for the Study of Labor (IZA). [Downloadable!]
  13. Bente Halvorsen, 2000. "Comparing Ranking and Contingent Valuation for Valuing Human Lives, Applying Nested and Non-Nested Logit Models," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 17(1), pages 1-19, September. [Downloadable!] (restricted)
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