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Dichotomous-Choice, Contingent-Valuation Questions: Functional Form Is Important

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  • Boyle, Kevin J.

Abstract

A variety of questioning formats have been used in contingent-valuation studies, with dichotomous-choice questions becoming the preferred format. However, as with any empirical technique, continued applications raise questions that require attention if the credibility of the procedure is to be maintained. It is shown that estimated Hicksian surplus can be substantially affected by the selection of a functional form when analyzing responses to dichotomous-choice questions. Given that theory, intuition, and empiricism all play a role in developing these estimates, several maxims are suggested for evaluating and/or mitigating such effects in future studies.

Suggested Citation

  • Boyle, Kevin J., 1990. "Dichotomous-Choice, Contingent-Valuation Questions: Functional Form Is Important," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 19(2), October.
  • Handle: RePEc:ags:nejare:29039
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    1. Milon, J. Walter, 1989. "Contingent valuation experiments for strategic behavior," Journal of Environmental Economics and Management, Elsevier, vol. 17(3), pages 293-308, November.
    2. Boyle, Kevin J. & Welsh, Michael P. & Bishop, Richard C., 1988. "Validation of empirical measures of welfare change: comment," MPRA Paper 31237, University Library of Munich, Germany.
    3. Christine Seller & John R. Stoll & Jean-Paul Chavas, 1985. "Validation of Empirical Measures of Welfare Change: A Comparison of Nonmarket Techniques," Land Economics, University of Wisconsin Press, vol. 62(2), pages 156-175.
    4. Hoehn, John P. & Randall, Alan, 1987. "A satisfactory benefit cost indicator from contingent valuation," Journal of Environmental Economics and Management, Elsevier, vol. 14(3), pages 226-247, September.
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    Cited by:

    1. Lupi, Frank, 1998. "Increasing At An Increasing Rate: The Potential Convexity Of Discrete-Choice Welfare Measures," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20970, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Halstead, John M. & Luloff, A.E. & Stevens, Thomas H., 1992. "Protest Bidders In Contingent Valuation," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 21(2), October.
    3. Spencer, Michael A. & Swallow, Stephen K. & Miller, Christopher J., 1998. "Valuing Water Quality Monitoring: A Contingent Valuation Experiment Involving Hypothetical and Real Payments," Agricultural and Resource Economics Review, Cambridge University Press, vol. 27(01), pages 28-42, April.
    4. Kline, Jeffrey & Wichelns, Dennis, 1998. "Measuring heterogeneous preferences for preserving farmland and open space," Ecological Economics, Elsevier, vol. 26(2), pages 211-224, August.
    5. repec:eco:journ2:2017-04-11 is not listed on IDEAS
    6. Swallow, Stephen K. & Opaluch, James J. & Weaver, Thomas F., 2001. "Strength-of-Preference Indicators and an Ordered-Response Model for Ordinarily Dichotomous, Discrete Choice Data," Journal of Environmental Economics and Management, Elsevier, vol. 41(1), pages 70-93, January.
    7. Lakhani, Raksha & Doluweera, Ganesh & Bergerson, Joule, 2014. "Internalizing land use impacts for life cycle cost analysis of energy systems: A case of California’s photovoltaic implementation," Applied Energy, Elsevier, vol. 116(C), pages 253-259.
    8. repec:eee:ecoser:v:24:y:2017:i:c:p:16-27 is not listed on IDEAS
    9. Nunes, Paulo A. L. D. & van den Bergh, Jeroen C. J. M., 2001. "Economic valuation of biodiversity: sense or nonsense?," Ecological Economics, Elsevier, vol. 39(2), pages 203-222, November.
    10. Nunes, P.A.L.D. & Nijkamp, P., 2011. "Biodiversity: Economic perspectives," Serie Research Memoranda 0002, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    11. Irwin, Elena G. & Roe, Brian E. & Morrow-Jones, Hazel, 2002. "The Effects Of Farmland, Farmland Preservation And Other Neighborhood Amenities On Proximate Housing Values: Results Of A Conjoint Analysis Of Housing Choice," 2002 Annual meeting, July 28-31, Long Beach, CA 19611, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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