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Contingent Valuation of Community Forestry Programs in Ethiopia: Observing Preference Anomalies in Double-Bounded CVM

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  • Dambala Gelo
  • Steven F Koch

Abstract

This study examines the potential for anomalous response behaviour effects within the context of double-bounded contingent valuation applied to community forestry programs in rural Ethiopia. Anomalous responses considered include shift effects, framing effects, anchoring effects, and others closely related to these. The results confirmed the presence of anomalous responses, especially shift and framing effects; anchoring effects are not uncovered. After controlling for these biases, the analysed community forestry program is shown to offer a welfare gain ranging from Ethiopian Birr (ETB) 20.14 to 22.80 annually, per household. In addition to uncovering limited welfare benefits, the results raise questions regarding the validity of previous double-bounded contingent valuation welfare estimates in developing countries, suggesting that future studies should control for incentive incompatibility and framing effects bias.

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Bibliographic Info

Paper provided by Economic Research Southern Africa in its series Working Papers with number 272.

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Length: 28 pages
Date of creation: 2012
Date of revision:
Handle: RePEc:rza:wpaper:272

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Keywords: Double-bounded contingent valuation; shift bias; anchoring bias;

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