Monte Carlo Benchmarks for Discrete Response Valuation Methods
AbstractThis paper argues that the widespread belief that discrete contingent valuation (CV) questions yield substantially larger estimates of the mean (and the median) willingness to pay (WTP) for nonmarket environmental resources in comparison to estimates from open-ended CV questions is unfounded. A set of Monte Carlo experiments estimate the factors influencing the performance of WTP estimates based on discrete response models. Most of the error in the WTP estimates arises from the specification errors that are common in most of the empirical models used in the literature. These experiments suggest models based on choices where WTP is dominated by non use (or passive use) values are likely to have smaller errors than where large use values influence these decisions.
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Bibliographic InfoPaper provided by Duke University, Department of Economics in its series Working Papers with number 96-24.
Date of creation: 1996
Date of revision:
Publication status: Published in LAND ECONOMICS, Vol. 74, 1998, pages 186-202
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Other versions of this item:
- Ju-Chin Huang & V. Kerry Smith, 1998. "Monte Carlo Benchmarks for Discrete Response Valuation Methods," Land Economics, University of Wisconsin Press, vol. 74(2), pages 186-202.
- Smith, V. Kerry & Huang, Ju-Chin, 1997. "Monte Carlo Benchmarks for Discrete Response Valuation Methods," Discussion Papers dp-97-23, Resources For the Future.
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
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