One-and-one-half-bound dichotomous choice contingent valuation
AbstractAlthough the double-bound (DB) format for the discrete choice contingent valuation method (CVM) has the benefit of higher efficiency in welfare benefit estimates than the single-bound (SB) discrete choice CVM, it has been subject to criticism due to evidence that some of the responses to the second bid may be inconsistent with the responses to the first bid. As a means to reduce the potential for response bias on the follow-up bid in multiple-bound discrete choice formats such as the DB model while maintaining much of the efficiency gains of the multiple-bound approach, we introduce the one-and-one-half-bound (OOHB) approach and present a real-world application. In a laboratory setting, despite the fact that the OOHB model uses less information than the DB approach, the efficiency gains in moving from SB to OOHB capture a large portion of the gain associated with moving from SB to DB. Utilizing distribution-free seminonparametric estimation techniques on a split-survey data set, our OOHB estimates demonstrated higher consistency with respect to the follow-up data than the DB estimates and were more efficient as well. Hence, OOHB may serve as a viable alternative to the DB format in situations where follow-up response bias may be a concern. Â© 2002 President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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Bibliographic InfoPaper provided by University of California at Berkeley, Department of Agricultural and Resource Economics and Policy in its series CUDARE Working Paper Series with number 921.
Length: 31 pages
Date of creation: 2001
Date of revision:
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Other versions of this item:
- Joseph C. Cooper & Michael Hanemann & Giovanni Signorello, 2002. "One-and-One-Half-Bound Dichotomous Choice Contingent Valuation," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 742-750, November.
- Cooper, Joseph C. & Hanemann, W. Michael & Signorello, Giovanni, 2001. "One-and-One-Half Bound Dichotomous Choice Contingent Valuation," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series, Department of Agricultural & Resource Economics, UC Berkeley qt09c663b2, Department of Agricultural & Resource Economics, UC Berkeley.
- Cooper, Joseph C. & Hanemann, W.M. & Signorello, Giovanni, 2002. "One and One-Half Bound Dichotomous Choice Contingent Valuation," MPRA Paper 17190, University Library of Munich, Germany, revised Nov 2002.
- Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources
- C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
- Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
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