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Efficiency Gains Afforded by Improved Bid Design versus Follow-up Valuation Questions in Discrete-Choice CV Studies

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  • Riccardo Scarpa
  • Ian Bateman

Abstract

ABSTRACT. Interval data analysis of CV discrete choice responses delivers efficiency gains which must be weighed against the risk of introducing strategic response bias. Efficiency gains are also achievable by improved bid design. We assess these gains on median WTP estimates first in an empirical application, then by means of a Monte Carlo experiment comparing three different bid designs. Improved, but sub-optimal, bid design delivers comparable gains to those achieved by one and two follow-up questions. The first follow-up captures more than 50% of the efficiency gain provided by a second follow-up.

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Bibliographic Info

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

Volume (Year): 76 (2000)
Issue (Month): 2 ()
Pages: 299-311

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Handle: RePEc:uwp:landec:v:76:y:2000:i:2:p:299-311

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

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Cited by:
  1. Giaccaria Sergio & Frontuto Vito & Dalmazzone Silvana, 2010. "Who’s afraid of power lines? Merging survey and GIS data to account for spatial heterogeneity," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201002, University of Turin.
  2. Pere Riera & Raúl Brey & Guillermo Gándara, 2008. "Bid design for non-parametric contingent valuation with a single bounded dichotomous choice format," Hacienda Pública Española, IEF, vol. 186(3), pages 43-60, October.
  3. Catalina M. Torres Figuerola & Nick Hanley & Antoni Riera Font, 2008. "The implications of incorrect utility function specification for welfare measurement in choice experiments," CRE Working Papers (Documents de treball del CRE) 2008/6, Centre de Recerca Econòmica (UIB ·"Sa Nostra").
  4. 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.
  5. Giuseppe Nocella & Lionel Hubbard & Riccardo Scarpa, 2010. "Farm Animal Welfare, Consumer Willingness to Pay, and Trust: Results of a Cross-National Survey," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 32(2), pages 275-297.
  6. Catalina M. Torres Figuerola & Nick Hanley & Sergio Colombo, 2011. "Incorrectly accounting for taste heterogeneity in choice experiments: Does it really matter for welfare measurement?," CRE Working Papers (Documents de treball del CRE) 2011/1, Centre de Recerca Econòmica (UIB ·"Sa Nostra").
  7. Jorge Araña & Carmelo León, 2007. "Repeated Dichotomous Choice Formats for Elicitation of Willingness to Pay: Simultaneous Estimation and Anchoring Effect," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 36(4), pages 475-497, April.
  8. Bateman, Ian J. & Day, Brett H. & Dupont, Diane P. & Georgiou, Stavros, 2006. "Incentive compatibility and procedural invariance testing of the one-and-one-half-bound dichotomous choice elicitation method: distinguishing strategic behaviour from the anchoring heuristic," 2006 Annual meeting, July 23-26, Long Beach, CA 21104, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  9. 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.
  10. Powe, N. A. & Bateman, I. J., 2003. "Ordering effects in nested 'top-down' and 'bottom-up' contingent valuation designs," Ecological Economics, Elsevier, vol. 45(2), pages 255-270, June.
  11. 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.
  12. Rong-Chang Jou & Yuan-Chan Wu & Ke-Hong Chen, 2011. "Analysis of the environmental benefits of a motorcycle idling stop policy at urban intersections," Transportation, Springer, vol. 38(6), pages 1017-1033, November.
  13. Torres, Cati & Hanley, Nick & Riera, Antoni, 2011. "How wrong can you be? Implications of incorrect utility function specification for welfare measurement in choice experiments," Journal of Environmental Economics and Management, Elsevier, vol. 62(1), pages 111-121, July.
  14. Kang, Heechan & Haab, Timothy C. & Interis, Matthew G., 2013. "Identifying inconsistent responses in dichotomous choice contingent valuation with follow-up questions," Resource and Energy Economics, Elsevier, vol. 35(3), pages 396-411.
  15. 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.
  16. Araña, Jorge E. & León, Carmelo J., 2008. "Do emotions matter? Coherent preferences under anchoring and emotional effects," Ecological Economics, Elsevier, vol. 66(4), pages 700-711, July.
  17. Riccardo Scarpa & Kenneth Willis & Guy Garrod, 2001. "Estimating Benefits for Effective Enforcement of Speed Reduction from Dichotomous-Choice CV," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 20(4), pages 281-304, December.
  18. Aravena, Claudia & Hutchinson, W. George & Longo, Alberto, 2012. "Environmental pricing of externalities from different sources of electricity generation in Chile," Energy Economics, Elsevier, vol. 34(4), pages 1214-1225.
  19. Neil Powe & Kenneth Willis & Guy Garrod, 2006. "Difficulties in valuing street light improvement: trust, surprise and bound effects," Applied Economics, Taylor & Francis Journals, vol. 38(4), pages 371-381.
  20. Kang, Heechan & Haab, Timothy C., 2006. "Inconsistent responses in the dichotomous choice contingent valuation with follow-up questions," 2006 Annual meeting, July 23-26, Long Beach, CA 21394, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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