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Incorporating zero and missing responses into CVM with open-ended bidding: willingness to pay for blue skies in Beijing

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  • YU, XIAOHUA
  • ABLER, DAVID

Abstract

Based on decision theory, this paper suggests a four-hurdle model to deal with zero and missing responses in the contingent valuation method with open-ended bidding, which is used to analyze the willingness to pay for blue skies in Beijing where air pollution is known to be very serious. The mean and the median of the predicted willingness to pay for blue skies per household are, respectively, 120.15 and 128.60 yuan, less than 0.2% of the per capita annual disposal income in Beijing. This is very low compared to results from studies of other countries. The empirical results also indicate that the four-hurdle model is superior to the Tobit model and raw data estimation.

Suggested Citation

  • Yu, Xiaohua & Abler, David, 2010. "Incorporating zero and missing responses into CVM with open-ended bidding: willingness to pay for blue skies in Beijing," Environment and Development Economics, Cambridge University Press, vol. 15(5), pages 535-556, October.
    • Handle: RePEc:cup:endeec:v:15:y:2010:i:05:p:535-556_00
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    Cited by:

    1. Xiaofu Chen & Chang Liu & Xiaohua Yu, 2022. "Urbanization, Economic Development, and Ecological Environment: Evidence from Provincial Panel Data in China," Sustainability, MDPI, vol. 14(3), pages 1-15, January.
    2. Moritz A. Drupp, 2018. "Limits to Substitution Between Ecosystem Services and Manufactured Goods and Implications for Social Discounting," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 69(1), pages 135-158, January.
    3. Wang, Hanjie & Maruejols, Lucie & Yu, Xiaohua, 2021. "Predicting energy poverty with combinations of remote-sensing and socioeconomic survey data in India: Evidence from machine learning," Energy Economics, Elsevier, vol. 102(C).
    4. Levison S. Chiwaula & Gowokani Chijere Chirwa & Lucy S. Binauli & James Banda & Joseph Nagoli, 2018. "Gender differences in willingness to pay for capital-intensive agricultural technologies: the case of fish solar tent dryers in Malawi," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 6(1), pages 1-15, December.
    5. AHMED, Musa H. & MELESSE, Kumilachew A. & TEREFE, Aemro T., 2015. "Valuing Soil Conservation Practices Using Contingent Valuation Technique: Evidence From The Central Rift Valley Of Ethiopia," Review of Agricultural and Applied Economics (RAAE), Faculty of Economics and Management, Slovak Agricultural University in Nitra, vol. 18(2), pages 1-11, October.
    6. Ghosh, Ranjan & Goyal, Yugank & Rommel, Jens & Sagebiel, Julian, 2017. "Are small firms willing to pay for improved power supply? Evidence from a contingent valuation study in India," Energy Policy, Elsevier, vol. 109(C), pages 659-665.
    7. Ahlheim, Michael & Frör, Oliver & Nguyen Minh Duc & Rehl, Antonia & Siepmann, Ute & Pham Van Dinh, 2017. "Labour as a utility measure reconsidered," Hohenheim Discussion Papers in Business, Economics and Social Sciences 03-2017, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    8. Kiran Krishnamurthy, Chandra & Kriström, Bengt, 2013. "Determinants of the price-premium for Green Energy: Evidence from an OECD cross-section," CERE Working Papers 2013:7, CERE - the Center for Environmental and Resource Economics, revised 30 Jun 2014.
    9. Lazarus MUCHABAIWA & Lloyd CHIGUSIWA & Samuel BINDU & Victoria MUDAVANHU & David DAMIYANO & Bongani Edwin MUSHANYURI, 2017. "Feasibility and Sustainability of Community Based Health Insurance in Rural Areas Case Study of Musana, Zimbabwe," Expert Journal of Finance, Sprint Investify, vol. 5, pages 73-85.
    10. Xiaohua Yu & Binjian Yan & Zhifeng Gao, 2014. "Can willingness-to-pay values be manipulated? Evidence from an organic food experiment in China," Agricultural Economics, International Association of Agricultural Economists, vol. 45(S1), pages 119-127, November.
    11. Agnieszka Mandziuk & Dagmara Stangierska & Beata Fornal-Pieniak & Jerzy Gębski & Barbara Żarska & Marta Kiraga, 2022. "Preferences of Young Adults concerning the Pocket Parks with Water Reservoirs in the Aspect of Willingness to Pay (WTP) in Warsaw City, Poland," Sustainability, MDPI, vol. 14(9), pages 1-13, April.
    12. Mandy Ryan & Emmanouil Mentzakis & Catriona Matheson & Christine Bond, 2020. "Survey modes comparison in contingent valuation: Internet panels and mail surveys," Health Economics, John Wiley & Sons, Ltd., vol. 29(2), pages 234-242, February.
    13. Stefan Baumgärtner & Alexandra Klein & Denise Thiel & Klara Winkler, 2015. "Ramsey Discounting of Ecosystem Services," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 61(2), pages 273-296, June.
    14. Broberg, Thomas & Kazukauskas, Andrius, 2014. "Inefficiencies in residential use of energy - A critical overview of literature and energy efficiency policies in EU and Sweden," CERE Working Papers 2014:7, CERE - the Center for Environmental and Resource Economics.
    15. Xuhui Wang & Asad Hassan Butt & Qilin Zhang & Muhammad Nouman Shafique & Hassaan Ahmad & Zahid Nawaz, 2020. "Gaming Avatar Can Influence Sustainable Healthy Lifestyle: Be Like an Avatar," Sustainability, MDPI, vol. 12(5), pages 1-22, March.
    16. Blankenship, Brian & Wong, Jason Chun Yu & Urpelainen, Johannes, 2019. "Explaining willingness to pay for pricing reforms that improve electricity service in India," Energy Policy, Elsevier, vol. 128(C), pages 459-469.
    17. Bigerna, Simona & Choudhary, Piyush & Kumar Jain, Nikunj & Micheli, Silvia & Polinori, Paolo, 2022. "Avoiding unanticipated power outages: households’ willingness to pay in India," MPRA Paper 114160, University Library of Munich, Germany.
    18. Liu, L-Q. & Yin, Z-L. & Xie, B-C. & Zhou, W., 2020. "Willingness to Pay for Better Air Quality: The case of China," Cambridge Working Papers in Economics 2042, Faculty of Economics, University of Cambridge.
    19. Yu, Xiaohua & Gao, Zhifeng & Zeng, Yinchu, 2014. "Willingness to pay for the “Green Food” in China," Food Policy, Elsevier, vol. 45(C), pages 80-87.
    20. Chandra Kiran B. Krishnamurthy & Bengt Kriström, 2016. "Determinants of the Price-Premium for Green Energy: Evidence from an OECD Cross-Section," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(2), pages 173-204, June.
    21. Tian, Xu & Yu, Xiaohua & Holst, Rainer, 2011. "Applying the payment card approach to estimate the WTP for green food in China," IAMO Forum 2011: Will the "BRICs Decade" Continue? – Prospects for Trade and Growth 23, Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO).
    22. Xiaohua, Yu & Binjian, Yan & Zhifeng, Gao, 2014. "Can Willingness-To-Pay Values be Manipulated? Evidences from an Experiment on Organic Food in China," GlobalFood Discussion Papers 169402, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    23. Blackman, Allen & Qin, Ping & Yang, Jun, 2020. "How costly are driving restrictions? Contingent valuation evidence from Beijing," Journal of Environmental Economics and Management, Elsevier, vol. 104(C).

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