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Correcting for the endogeneity of pro-environment behavioral choices in contingent valuation

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  • Martínez-Espiñeira, Roberto
  • Lyssenko, Nikita

Abstract

In contingent valuation studies, observed behavioral choices often enter as independent variables in the willingness to pay function. However, these variables may be endogenously determined when the error term in the behavioral model is correlated with the error term in the willingness to pay model. We investigate the effects of correcting for the endogeneity of a variable, namely membership status in environmental organizations that proxies unobservable characteristics of the respondents. Jointly modeling the membership variable and the willingness to pay response yields an estimate for the effect of the former that contradicts previous findings but is intuitive and agrees with theoretical expectations.

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  • Martínez-Espiñeira, Roberto & Lyssenko, Nikita, 2011. "Correcting for the endogeneity of pro-environment behavioral choices in contingent valuation," Ecological Economics, Elsevier, vol. 70(8), pages 1435-1439, June.
    • Handle: RePEc:eee:ecolec:v:70:y:2011:i:8:p:1435-1439
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    5. Vargas, Andrés & Díaz, David, 2014. "Community-based conservation programs and local people willingness to pay for wildlife protection: The case of the cotton-top tamarin in the Colombian Caribbean," Revista Lecturas de Economía, Universidad de Antioquia, CIE, issue 81, pages 187-206, April.
    6. Kassahun, Habtamu Tilahun & Jacobsen, Jette Bredahl & Nicholson, Charles F., 2020. "Revisiting money and labor for valuing environmental goods and services in developing countries," Ecological Economics, Elsevier, vol. 177(C).
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