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Protesting or Justifying? A Latent Class Model for Contingent Valuation with Attitudinal Data

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  • Cunha-e-Sa, Maria Antonieta
  • Madureira, Livia
  • Nunes, Luis Catela
  • Otrachshenko, Vladimir

Abstract

This article develops a latent class model for estimating willingness-to-pay for public goods using simultaneously contingent valuation (CV) and attitudinal data capturing protest attitudes related to the lack of trust in public institutions providing those goods. A measure of the social cost associated with protest responses and the consequent loss in potential contributions for providing the public good is proposed. The presence of potential justification biases is further considered, that is, the possibility that for psychological reasons the response to the CV question affects the answers to the attitudinal questions. The results from our empirical application suggest that psychological factors should not be ignored in CV estimation for policy purposes, allowing for a correct identification of protest responses. JEL codes: C35, C85, Q51

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Bibliographic Info

Paper provided by Universidade Nova de Lisboa, Faculdade de Economia in its series FEUNL Working Paper Series with number wp547.

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Length: 25 pages
Date of creation: 2010
Date of revision:
Handle: RePEc:unl:unlfep:wp547

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  1. Joan Walker & Jieping Li, 2007. "Latent lifestyle preferences and household location decisions," Journal of Geographical Systems, Springer, vol. 9(1), pages 77-101, April.
  2. Mark Gradstein, 2008. "Institutional Traps And Economic Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(3), pages 1043-1066, 08.
  3. Bradley Jorgensen & Geoffrey Syme & Brian Bishop & Blair Nancarrow, 1999. "Protest Responses in Contingent Valuation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 14(1), pages 131-150, July.
  4. Meyerhoff, Jurgen & Liebe, Ulf, 2006. "Protest beliefs in contingent valuation: Explaining their motivation," Ecological Economics, Elsevier, vol. 57(4), pages 583-594, June.
  5. Carson, Richard T & Groves, Theodore, 2010. "Incentive and Information Properties of Preference Questions," University of California at San Diego, Economics Working Paper Series qt88d8644g, Department of Economics, UC San Diego.
  6. Bernauer, Thomas & Koubi, Vally, 2009. "Effects of political institutions on air quality," Ecological Economics, Elsevier, vol. 68(5), pages 1355-1365, March.
  7. Jürgen Meyerhoff & Ulf Liebe, 2008. "Do protest responses to a contingent valuation question and a choice experiment differ?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 39(4), pages 433-446, April.
  8. Angel Bujosa Bestard & Antoni Riera Font & Robert L. Hicks, 2009. "Combining discrete and continuous representations of preference heterogeneity: a latent class approach," CRE Working Papers (Documents de treball del CRE) 2009/2, Centre de Recerca Econòmica (UIB ·"Sa Nostra").
  9. Robert J. Johnston & Joshua M. Duke, 2007. "Willingness to Pay for Agricultural Land Preservation and Policy Process Attributes: Does the Method Matter?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(4), pages 1098-1115.
  10. Kristin Jakobsson & Andrew Dragun, 2001. "The Worth of a Possum: Valuing Species with the Contingent Valuation Method," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 19(3), pages 211-227, July.
  11. Jorgensen, Bradley S. & Syme, Geoffrey J., 2000. "Protest responses and willingness to pay: attitude toward paying for stormwater pollution abatement," Ecological Economics, Elsevier, vol. 33(2), pages 251-265, May.
  12. Edward Morey & Jennifer Thacher & William Breffle, 2006. "Using Angler Characteristics and Attitudinal Data to Identify Environmental Preference Classes: A Latent-Class Model," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 34(1), pages 91-115, 05.
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Cited by:
  1. Madureira, Lívia & Nunes, Luis C. & Borges, José G. & Falcão, André O., 2011. "Assessing forest management strategies using a contingent valuation approach and advanced visualisation techniques: A Portuguese case study," Journal of Forest Economics, Elsevier, vol. 17(4), pages 399-414.

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