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A Spatial Probit Modeling Approach to Account for Spatial Spillover Effects in Dichotomous Choice Contingent Valuation Surveys

Author

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  • Loomis, John B.
  • Mueller, Julie M.

Abstract

We present a demonstration of a Bayesian spatial probit model for a dichotomous choice contingent valuation method willingness-to-pay (WTP) questions. If voting behavior is spatially correlated, spatial interdependence exists within the data, and standard probit models will result in biased and inconsistent estimated nonbid coefficients. Adjusting sample WTP to population WTP requires unbiased estimates of the nonbid coefficients, and we find a $17 difference in population WTP per household in a standard vs. spatial model. We conclude that failure to correctly model spatial dependence can lead to differences in WTP estimates with potentially important policy ramifications.

Suggested Citation

  • Loomis, John B. & Mueller, Julie M., 2013. "A Spatial Probit Modeling Approach to Account for Spatial Spillover Effects in Dichotomous Choice Contingent Valuation Surveys," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 45(1), pages 53-63, February.
    • Handle: RePEc:cup:jagaec:v:45:y:2013:i:01:p:53-63_00
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    Cited by:

    1. Artell, Janne & Ahtiainen, Heini & Pouta, Eija, 2019. "Distance decay and regional statistics in international benefit transfer," Ecological Economics, Elsevier, vol. 164(C), pages 1-1.
    2. Corral, Paul & Radchenko, Natalia, 2017. "What’s So Spatial about Diversification in Nigeria?," World Development, Elsevier, vol. 95(C), pages 231-253.
    3. Kei Kabaya, 2022. "Examining spatially heterogeneous preferences for coastal ecosystem restoration with Bayesian spatial probit approaches," Letters in Spatial and Resource Sciences, Springer, vol. 15(1), pages 99-112, April.
    4. Adjognon, Serge & Liverpool-Tasie, Lenis, 2015. "Spatial Neighborhood Effects in Agricultural Technology Adoption: Evidence from Nigeria," 2015 Conference, August 9-14, 2015, Milan, Italy 210934, International Association of Agricultural Economists.
    5. Adjognon, Serge & Liverpool-Tasie, Lenis Saweda O., 2014. "Spatial Dependence in the Adoption of the Urea Deep Placement for Rice Production in Niger State, Nigeria: A Bayesian Spatial Autoregressive Probit Estimation Approach," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170515, Agricultural and Applied Economics Association.

    More about this item

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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