The Effect of Uncertainty on Contingent Valuation Estimates: A Comparison
AbstractWe examine the impact of uncertainty on contingent valuation responses using (1) a survey of Canadian landowners about willingness to accept compensation for converting cropland to forestry and (2) a survey of Swedish residents about willingness to pay for forest conservation. Five approaches from the literature for incorporating respondent uncertainty are used and compared to the traditional RUM model with assumed certainty. The results indicate that incorporating uncertainty has the potential to increase fit, but could introduce additional variance. While some methods for uncertainty are an improvement over traditional approaches, we caution against systematic judgments about the effect of uncertainty on contingent valuation responses.
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Bibliographic InfoPaper provided by University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group in its series Working Papers with number 2005-15.
Length: 34 pages
Date of creation: Nov 2005
Date of revision:
respondent uncertainty; willingness to accept; contingent valuation;
Find related papers by JEL classification:
- Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
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- Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
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