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Improved Estimation of Willingness to Pay in Dichotomous Choice Contingent Valuation Studies

Author

Listed:
  • Ian H. Langford
  • Ian J. Bateman
  • Andrew P. Jones
  • Hugh D. Langford
  • Stavros Georgiou

Abstract

This paper uses recently developed statistical techniques to achieve improved parameter estimates from models of dichotomous choice contingent valuation data. Random effects associated with bid amounts presented to respondents are modelled alongside the variance of individual responses, to give a nested model which more truly reflects the structure of the data being analyzed. Quasi-likelihood methods for estimating parameters in such hierarchical models are discussed, and a simulation method for assessing goodness of fit is demonstrated. However, estimated parameters may still be biased, and hence, a parametric bootstrap technique is presented and compared to a delta method approximation.

Suggested Citation

  • Ian H. Langford & Ian J. Bateman & Andrew P. Jones & Hugh D. Langford & Stavros Georgiou, 1998. "Improved Estimation of Willingness to Pay in Dichotomous Choice Contingent Valuation Studies," Land Economics, University of Wisconsin Press, vol. 74(1), pages 65-75.
    • Handle: RePEc:uwp:landec:v:74:y:1998:i:1:p:65-75
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    Citations

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    Cited by:

    1. Ian Langford* & Areti Kontogianni & Mihalis Skourtos & Stavros Georgiou & Ian Bateman, 1998. "Multivariate Mixed Models for Open-Ended Contingent Valuation Data: Willingness To Pay For Conservation of Monk Seals," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 12(4), pages 443-456, December.
    2. Bateman, Ian J. & Langford, Ian H. & Jones, Andrew P. & Kerr, Geoffrey N., 2001. "Bound and path effects in double and triple bounded dichotomous choice contingent valuation," Resource and Energy Economics, Elsevier, vol. 23(3), pages 191-213, July.
    3. Areti Kontogianni & Ian Langford & Andreas Papandreou & Mihalis Skourtos, 2003. "Social Preferences for Improving Water Quality: An Economic Analysis of Benefits from Wastewater Treatment," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 17(5), pages 317-336, October.
    4. Juyong Lee & Youngsang Cho & Jungwoo Shin, 2019. "A Study on the Optimal Ratio of Research and Development Investment in the Energy Sector: An Empirical Analysis in South Korea," Energies, MDPI, vol. 12(2), pages 1-12, January.
    5. George Parsons & Kelley Myers, 2017. "Fat tails and truncated bids in contingent valuation: an application to an endangered shorebird species," Chapters, in: Daniel McFadden & Kenneth Train (ed.), Contingent Valuation of Environmental Goods, chapter 2, pages 17-42, Edward Elgar Publishing.
    6. Steven Humphrey & Paul Mann & Chris Starmer, 2005. "Testing for feedback-conditional regret effects using a natural lottery," Discussion Papers 2005-07, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    7. Rhee, Hae-Chun & Lee, Kyu-yong & Cho, Joonmo, 2005. "Liberalizing employment of foreign workers in Korea: Public perception and assessment," Journal of Policy Modeling, Elsevier, vol. 27(8), pages 971-987, November.
    8. Scarpa, Riccardo & Chilton, Susan M. & Hutchinson, W. George & Buongiorno, Joseph, 2000. "Valuing the recreational benefits from the creation of nature reserves in Irish forests," Ecological Economics, Elsevier, vol. 33(2), pages 237-250, May.
    9. Ian H Langford & Mihalis S Skourtos & Areti Kontogianni & Rosemary J Day & Stavros Georgiou & Ian J Bateman, 2001. "Use and Nonuse Values for Conserving Endangered Species: The Case of the Mediterranean Monk Seal," Environment and Planning A, , vol. 33(12), pages 2219-2233, December.
    10. Greiner, Romy & Rolfe, John, 2003. "Estimating consumer surplus and elasticity of demand of tourist visitation to a region in North Queensland using contingent valuation," 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia 57881, Australian Agricultural and Resource Economics Society.
    11. W. George Hutchinson & Riccardo Scarpa & Susan M. Chilton & T. McCallion, 2001. "Parametric and Non‐Parametric Estimates of Willingness to Pay for Forest Recreation in Northern Ireland: A Discrete Choice Contingent Valuation Study with Follow‐Ups," Journal of Agricultural Economics, Wiley Blackwell, vol. 52(1), pages 104-122, January.
    12. Romy Greiner & John Rolfe, 2004. "Estimating Consumer Surplus and Elasticity of Demand of Tourist Visitation to a Region in North Queensland Using Contingent Valuation," Tourism Economics, , vol. 10(3), pages 317-328, September.
    13. Brown, Katrina & Adger, W. Neil & Tompkins, Emma & Bacon, Peter & Shim, David & Young, Kathy, 2001. "Trade-off analysis for marine protected area management," Ecological Economics, Elsevier, vol. 37(3), pages 417-434, June.
    14. Nicholas E. Flores & Jennifer Thacher, 2002. "Money, Who Needs It? Natural Resource Damage Assessment," Contemporary Economic Policy, Western Economic Association International, vol. 20(2), pages 171-178, April.
    15. Hae-Chun Rhee & Kwangho Woo & Joonmo Cho, 2014. "Identifying the winners under the Age Discrimination Prohibition Legislation in Korea: policy remedy for redistribution," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 19(1), pages 186-201, January.
    16. Zhang, Rui & Shonkwiler, J. Scott, 2017. "Bias Correction of Welfare measures in Non-Market Valuation: Comparison of the Delta Method, Jackknife and Bootstrap," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258099, Agricultural and Applied Economics Association.
    17. Rodelio F Subade, 2005. "Valuing Biodiversity Conservation in a World Heritage Site: Citizen's Non-use Values for Tubbataha Reefs National Marine Park, Philippines," EEPSEA Research Report rr2005064, Economy and Environment Program for Southeast Asia (EEPSEA), revised Jun 2005.
    18. Fredrik Carlsson & Peter Martinsson, 2001. "Willingness to pay for reduction in air pollution: a multilevel analysis," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 4(1), pages 17-27, March.
    19. Steven Humphrey & Paul Mann & Chris Starmer, 2005. "Testing for feedback-conditional regret effects using a natural lottery," Discussion Papers 2005-07, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.

    More about this item

    JEL classification:

    • Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources

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