Constructing Krinsky and Robb Confidence Interval for Mean and Median WTP Using Stata
AbstractThe ultimate goal of most non-market valuation studies is to obtain welfare measures i.e. mean and/or median willingness to pay (WTP) and confidence intervals. While the delta (nlcom) and bootstrap (bs) methods can be used for constructing such confidence intervals in Stata, they are not recommended because WTP measures are non-linear functions of random parameters (Creel and Loomis, 1991). The best and widely used approach, which is not available in Stata, consists in simulating the confidence intervals using the Krinsky and Robb procedure (Haab and McConnell, 2002). Hole (2007) has recently introduced a useful command, wtp, which implements the Krinsky and Robb procedure in Stata, but does not feature mean and median WTP estimates and their confidence intervals. I present a Stata command, wtpcikr, which computes mean and median WTP, confidence intervals using the Krinsky and Robb procedure, achieved significance level (ASL) for testing the null hypothesis that WTP equals zero, and a relative efficiency measure (Loomis and Ekstrand, 1998). The command supports both linear and exponential contingent valuation models estimated with or without covariates using the Stata commands probit, logit, biprobit, and xtprobit. I will illustrate the use of wtpcikr by replicating empirical results in Haab and McConnell (2002).
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Bibliographic InfoPaper provided by Stata Users Group in its series North American Stata Users' Group Meetings 2007 with number 8.
Date of creation: 15 Aug 2007
Date of revision: 30 Aug 2007
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- Liu, Yuanyuan & Zeng, Yinchu & Yu, Xiaohua, 2009. "Consumer Willingness to Pay for Food Safety in Beijing: A Case Study of Food Additives," 2009 Conference, August 16-22, 2009, Beijing, China 51234, International Association of Agricultural Economists.
- Diederich, Johannes & Goeschl, Timo, 2011. "Willingness to Pay for Individual Greenhouse Gas Emissions Reductions: Evidence from a Large Field Experiment," Working Papers 0517, University of Heidelberg, Department of Economics.
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