Testing and Correcting for Sample Selection Bias in Discrete Choice Contingent Valuation Studies
AbstractThe discrete choice or ”referendum” contingent valuation technique has become a popular tool for assessing the value of non-market goods. Surveys used in these studies frequently suffer from large non-response which can lead to significant bias in parameter estimates and in the estimate of mean Willingness to Pay. We investigate the properties of tests for sample selection bias and the losses made by applying estimators assuming no sample selection. The effects of sample selection bias can be sizable but bivariate probit estimation give unbiased estimates. A computationally straightforward test for sample selection bias is found to perform well.
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Bibliographic InfoPaper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 171.
Length: 38 pages
Date of creation: May 1997
Date of revision: 23 Jun 1999
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Bivariate probit; non-response; willingness to pay; omitted variables test;
Find related papers by JEL classification:
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- Seung-Hoon Yoo & Hee-Jong Yang, 2001. "Application of Sample Selection Model to Double-Bounded Dichotomous Choice Contingent Valuation Studies," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 20(2), pages 147-163, October.
- Jennifer Grannis & Dawn D. Thilmany, 2002. "Marketing natural pork: An empirical analysis of consumers in the mountain region," Agribusiness, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 18(4), pages 475-489.
- Lyssenko, Nikita & Martinez-Espineira, Roberto, 2009. "`Been there done that': Disentangling option value effects from user heterogeneity when valuing natural resources with a use component," MPRA Paper 21976, University Library of Munich, Germany, revised 08 Apr 2010.
- Xie, Jing & Gao, Zhifeng, 2013. "The Comparison of three Non-hypothetical Valuation Methods: Choice Experiments, Contingent Valuation, and Experimental Auction," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida, Southern Agricultural Economics Association 143103, Southern Agricultural Economics Association.
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