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Multivariate Mixed Models for Open-Ended Contingent Valuation Data: Willingness To Pay For Conservation of Monk Seals

  • Ian Langford*
  • Areti Kontogianni
  • Mihalis Skourtos
  • Stavros Georgiou
  • Ian Bateman

Although dichotomous choice (DC) contingent valuation (CV) has been recommended by the US NOAA 'blue-ribbon' panel for large-scale contingent valuation studies, useful information can still be obtained from smaller, open-ended (OE) studies, often undertaken as a precursor to a DC survey. The CV study considered here was carried out in Greece and looked at willingness-to-pay (WTP) for protecting the Mediterranean monk seal (Monachus-monachus) in the Aegean area. This is the most endangered seal in the world, and the application of the CV methodology was the first such application in Greece. The OE data consist of two responses: first, a binary response detailing whether or not respondents were in principle prepared to pay for the protection of this seal; secondly, those respondents who answered 'yes' to the first question were then asked to state their maximum WTP for such protection. A multivariate binomial – log-normal mixture model is used to develop a bid function including explanatory variables such as income, sex, age and education. Such a modelling approach provides an alternative to more commonplace tobit estimation. However, the model is extended to include further information which was collected on: (a) an increased WTP amount given in response to information that the initial WTP amount may not be enough to prevent the extinction of the seal; (b) respondents were asked to divide their final WTP amount between use, option and existence values, the latter requiring a multivariate model with four binary and four continuous responses per individual in the same model. The discussion focuses on the methodological issues raised with some comment on the substantive interpretation of results. Copyright Kluwer Academic Publishers 1998

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Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 12 (1998)
Issue (Month): 4 (December)
Pages: 443-456

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Handle: RePEc:kap:enreec:v:12:y:1998:i:4:p:443-456
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  1. Carson, Richard T. & Hanemann, W. Michael, 2006. "Contingent Valuation," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 17, pages 821-936 Elsevier.
  2. James Tobin, 1956. "Estimation of Relationships for Limited Dependent Variables," Cowles Foundation Discussion Papers 3R, Cowles Foundation for Research in Economics, Yale University.
  3. Ian Langford & Ian Bateman & Hugh Langford, 1996. "A multilevel modelling approach to triple-bounded dichotomous choice contingent valuation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 7(3), pages 197-211, April.
  4. Bateman, Ian J. & Langford, Ian H. & Turner, R. Kerry & Willis, Ken G. & Garrod, Guy D., 1995. "Elicitation and truncation effects in contingent valuation studies," Ecological Economics, Elsevier, vol. 12(2), pages 161-179, February.
  5. Ian H. Langford & Ian J. Bateman & Andrew P. Jones & Hugh D. Langford & Stavros Georgiou, 1998. "Improved Estimation of Willingness to Pay in Dichotomous Choice Contingent Valuation Studies," Land Economics, University of Wisconsin Press, vol. 74(1), pages 65-75.
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