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Binary Choice Valuation Studies with Heteregeneous Preferences Regarding the Program Being Valued

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  • Anni Huhtala

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Abstract

We investigate the effect of respondents' heterogeneous preferences regarding the good to be valued in binary-choice contingent valuationstudies. This is especially important when the valuation options give rise to both highly negative and highly positive attitudes.The survey design employs questionnaires which include separate items for willingness to favorandwillingness to contribute in monetary terms to the provision of the good. In light of our analysis, eliciting respondents' differentpreferences for the project first, without monetary considerations, wouldimprove the WTP estimates as welfare measures. Our results alsosuggest that nonparametric estimation could offer another solution foraccounting for preference heterogeneity. Nonparametric estimation is less sensitive to those `no' responses which are in fact not intended toreflect the respondents' WTP as such but merely to express their dislikefor the good at issue. Copyright Kluwer Academic Publishers 2000

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File URL: http://hdl.handle.net/10.1023/A:1008388426777
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Article provided by Springer & European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 16 (2000)
Issue (Month): 3 (July)
Pages: 263-279

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Handle: RePEc:kap:enreec:v:16:y:2000:i:3:p:263-279
DOI: 10.1023/A:1008388426777
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Keywords: conflicting objectives; heterogeneous preferences; contingent valuation;

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  1. Haab, Timothy C. & McConnell, Kenneth E., 1997. "Referendum Models and Negative Willingness to Pay: Alternative Solutions," Journal of Environmental Economics and Management, Elsevier, vol. 32(2), pages 251-270, February.
  2. Thomas C. Brown & Patricia A. Champ & Richard C. Bishop & Daniel W. McCollum, 1996. "Which Response Format Reveals the Truth about Donations to a Public Good?," Land Economics, University of Wisconsin Press, vol. 72(2), pages 152-166.
  3. W. Michael Hanemann, 1984. "Welfare Evaluations in Contingent Valuation Experiments with Discrete Responses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(3), pages 332-341.
  4. Krinsky, Itzhak & Robb, A Leslie, 1986. "On Approximating the Statistical Properties of Elasticities," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 715-719, November.
  5. Cummings, Ronald G & Harrison, Glenn W & Rutstrom, E Elisabet, 1995. "Homegrown Values and Hypothetical Surveys: Is the Dichotomous Choice Approach Incentive-Compatible?," American Economic Review, American Economic Association, vol. 85(1), pages 260-266, March.
  6. Adamowicz W. & Louviere J. & Williams M., 1994. "Combining Revealed and Stated Preference Methods for Valuing Environmental Amenities," Journal of Environmental Economics and Management, Elsevier, vol. 26(3), pages 271-292, May.
  7. Kealy, Mary Jo & Montgomery, Mark & Dovidio, John F., 1990. "Reliability and predictive validity of contingent values: Does the nature of the good matter?," Journal of Environmental Economics and Management, Elsevier, vol. 19(3), pages 244-263, November.
  8. Bengt Kriström, 1997. "Spike Models in Contingent Valuation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 1013-1023.
  9. Carson, Richard T & Wilks, Leanne & Imber, David, 1994. "Valuing the Preservation of Australia's Kakadu Conservation Zone," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 727-749, Supplemen.
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Cited by:

  1. Arana, Jorge E. & Leon, Carmelo J., 2005. "Flexible mixture distribution modeling of dichotomous choice contingent valuation with heterogenity," Journal of Environmental Economics and Management, Elsevier, vol. 50(1), pages 170-188, July.
  2. Bugbee, Marcia & Loureiro, Maria L., 2003. "A Risk Perception Analysis Of Genetically Modified Foods Based On Stated Preferences," 2003 Annual meeting, July 27-30, Montreal, Canada 22017, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  3. Cho, Seong-Hoon & Yen, Steven T. & Bowker, James Michael & Newman, David H., 2008. "Modeling Willingness to Pay for Land Conservation Easements: Treatment of Zero and Protest Bids and Application and Policy Implications," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 40(01), April.
  4. Nahuelhual, Laura & Loureiro, Maria L. & Loomis, John B., 2004. "Using Random Parameters to Account for Heterogeneous Preferences in Contingent Valuation of Public Open Space," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(03), December.
  5. Ovaskainen, Ville & Kniivila, Matleena, 2005. "Consumer versus citizen preferences in contingent valuation: evidence on the role of question framing," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(4), December.
  6. Schlapfer, Felix, 2006. "Survey protocol and income effects in the contingent valuation of public goods: A meta-analysis," Ecological Economics, Elsevier, vol. 57(3), pages 415-429, May.
  7. Huhtala, Anni, 2010. "Income effects and the inconvenience of private provision of public goods for bads: The case of recycling in Finland," Ecological Economics, Elsevier, vol. 69(8), pages 1675-1681, June.
  8. Kim, Soo-Il & Haab, Timothy C., 2009. "Temporal insensitivity of willingness to pay and implied discount rates," Resource and Energy Economics, Elsevier, vol. 31(2), pages 89-102, May.
  9. Loureiro, Maria L. & Loomis, John B. & Nahuelhual, Laura, 2004. "A comparison of a parametric and a non-parametric method to value a non-rejectable public good," Journal of Forest Economics, Elsevier, vol. 10(2), pages 61-74, September.
  10. Kim, Sooil & Haab, Timothy C., 2003. "Temporal Insensitivity Of Pvwtp And Implied Discount Rates In Cvm," 2003 Annual meeting, July 27-30, Montreal, Canada 21921, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  11. Pere Riera & Raúl Brey & Guillermo Gándara, 2008. "Bid design for non-parametric contingent valuation with a single bounded dichotomous choice format," Hacienda Pública Española, IEF, vol. 186(3), pages 43-60, October.

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