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Willingness-to-Pay Estimates Using the Double-Bounded Dichotomous-Choice Contingent Valuation Format: A Test for Validity and Precision in a Bayesian Framework

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  • Donald M. McLeod
  • Olvar Bergland
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    Abstract

    The Double-Bounded Dichotomous- Choice (DB-DC) Contingent Valuation format is thought to yield more precise welfare estimates. Questions remain about its validity. The initial bid may represent information with which respondents update their willingness to pay. A Bayesian model of respondent decision making is estimated for two data sets. The results indicate updating or shifts in respondent willingness to pay between iterated valuations. Nonparametric testing of the welfare estimates reveals that the model incorporating updating yields different values from the standard model. The expected increases in the precision of the DB-DC welfare estimates are lost when updating occurs.

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    Bibliographic Info

    Article provided by University of Wisconsin Press in its journal Land Economics.

    Volume (Year): 75 (1999)
    Issue (Month): 1 ()
    Pages: 115-125

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    Handle: RePEc:uwp:landec:v:75:y:1999:i:1:p:115-125

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    Web page: http://le.uwpress.org/

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    Cited by:
    1. Krishna, Vijesh V. & Qaim, Matin, 2006. "Estimating the Adoption of Bt Eggplant in India: Who Benefits from Public-Private Partnership?," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25311, International Association of Agricultural Economists.
    2. Day, Brett & Pinto Prades, Jose-Luis, 2010. "Ordering anomalies in choice experiments," Journal of Environmental Economics and Management, Elsevier, vol. 59(3), pages 271-285, May.
    3. Andrew Mill, Greig & van Rensburg, Tom M. & Hynes, Stephen & Dooley, Conor, 2007. "Preferences for multiple use forest management in Ireland: Citizen and consumer perpectives," Ecological Economics, Elsevier, vol. 60(3), pages 642-653, January.
    4. Garces-Voisenat, Juan-Pedro & Mukherjee, Zinnia, 2012. "Estimating the Willingness to Pay for Environmental Resources in the Chilean Patagonia," Working Papers 105, Wake Forest University, Economics Department.
    5. Barton, David N., 2002. "The transferability of benefit transfer: contingent valuation of water quality improvements in Costa Rica," Ecological Economics, Elsevier, vol. 42(1-2), pages 147-164, August.
    6. Jeffrey Czajkowski, 2006. "Identifying the True Willingness-To-Pay of Bayesian Respondents in a Dichotomous Choice Contingent Valuation Methodology," Working Papers 0606, Florida International University, Department of Economics.
    7. Aadland, David & Caplan, Arthur J., 2005. "A Bayesian Examination of Anchoring Bias and Cheap Talks in Constructed Markets," 2005 Annual meeting, July 24-27, Providence, RI 19568, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. M. Genius & E. Strazzera, 2005. "Modeling Elicitation effects in contingent valuation studies: a Monte Carlo Analysis of the bivariate approach," Working Paper CRENoS 200502, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    9. Genius, Margarita & Strazzera, Elisabetta, 2011. "Can unbiased be tighter? Assessment of methods to reduce the bias-variance trade-off in WTP estimation," Resource and Energy Economics, Elsevier, vol. 33(1), pages 293-314, January.
    10. 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.
    11. David Aadland & Arthur Caplan & Owen Phillips, 2007. "A Bayesian examination of information and uncertainty in contingent valuation," Journal of Risk and Uncertainty, Springer, vol. 35(2), pages 149-178, October.
    12. Michaël Schwarzinger & Fabrice Carrat & Stéphane Luchini, 2009. ""If you have the flu symptoms, your asymptomatic spouse may better answer the willingness-to-pay question". Evidence from a double-bounded dichotomous choice model with heterogeneous anchori," Post-Print inserm-00636179, HAL.
    13. Kim, GwanSeon & Petrolia, Daniel R. & Interis, Matthew G., 2012. "A Method for Improving Welfare Estimates from Multiple-Referendum Surveys," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 37(2), August.
    14. Schwarzinger, Michaël & Carrat, Fabrice & Luchini, Stéphane, 2009. ""If you have the flu symptoms, your asymptomatic spouse may better answer the willingness-to-pay question": Evidence from a double-bounded dichotomous choice model with heterogeneous anchori," Journal of Health Economics, Elsevier, vol. 28(4), pages 873-884, July.

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