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Can unbiased be tighter? Assessment of methods to reduce the bias-variance trade-off in WTP estimation

  • Genius, Margarita
  • Strazzera, Elisabetta

This paper aims at verifying the claim, appeared in recent literature, that it is possible to control for response bias associated to the double bound elicitation method, while keeping gains in efficiency of the WTP estimates. Results from a Monte Carlo analysis lead, in general, to reject the claim; but when initial bids are not correctly chosen, the gains in efficiency are confirmed. An empirical application dealing with WTP estimation for drinking water quality improvements illustrates a case where a flexible modeling approach based on Copula distributions allows relevant gains with respect to the Single Bound estimator.

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File URL: http://www.sciencedirect.com/science/article/B6VFJ-50KC6MJ-1/2/40848cc3b5e37113548e115875e05439
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Article provided by Elsevier in its journal Resource and Energy Economics.

Volume (Year): 33 (2011)
Issue (Month): 1 (January)
Pages: 293-314

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Handle: RePEc:eee:resene:v:33:y:2011:i:1:p:293-314
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505569

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  14. Elisabetta Strazzera & Riccardo Scarpa & Pinuccia Calia & Guy Garrod & Kenneth Willis, 2003. "Modelling zero values and protest responses in contingent valuation surveys," Applied Economics, Taylor & Francis Journals, vol. 35(2), pages 133-138.
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  17. Genius, Margarita & Strazzera, Elisabetta, 2002. "A note about model selection and tests for non-nested contingent valuation models," Economics Letters, Elsevier, vol. 74(3), pages 363-370, February.
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