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Application of Sample Selection Model to Double-Bounded Dichotomous Choice Contingent Valuation Studies

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  • Seung-Hoon Yoo
  • Hee-Jong Yang

Abstract

Modeling households' behavior with the data from a contingentvaluation (CV) survey is often complicated by samplenon-response, which can cause non-response bias and sampleselection bias, leading to inconsistent parameter estimates and adistorted mean willingness-to-pay estimate. This paper reportsthe results of empirical tests for both biases using householdsurvey data in which the double-bounded dichotomous choice CVquestion involved the benefit of a tap water quality improvementpolicy in Korea. No non-response bias, but sample selection bias,is detected in the sample. To correct for sample selection bias,a sample selection model is employed. The authors also discusshow failure to correct for bias may distort aggregate benefitestimates. Copyright Kluwer Academic Publishers 2001

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  • Seung-Hoon Yoo & Hee-Jong Yang, 2001. "Application of Sample Selection Model to Double-Bounded Dichotomous Choice Contingent Valuation Studies," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 20(2), pages 147-163, October.
    • Handle: RePEc:kap:enreec:v:20:y:2001:i:2:p:147-163
    DOI: 10.1023/A:1012625929384
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    4. Nguyen, Hanh Tien & Ariyawardana, Anoma & Ratnasiri, Shyama, 2020. "Forest plantation owners' willingness to pay for hybrid nursery stock: The case of Acacia hybrids in Central Vietnam," Forest Policy and Economics, Elsevier, vol. 116(C).
    5. Gschwandtner, Adelina & Jang, Cheul & McManus, Richard, 2018. "Improving Drinking Water Quality in South Korea: A Choice Experiment," 92nd Annual Conference, April 16-18, 2018, Warwick University, Coventry, UK 273472, Agricultural Economics Society.
    6. John C. Whitehead, 2006. "Improving Willingness to Pay Estimates for Quality Improvements through Joint Estimation with Quality Perceptions," Southern Economic Journal, John Wiley & Sons, vol. 73(1), pages 100-111, July.
    7. Luchini, Stéphane & Watson, Verity, 2013. "Uncertainty and framing in a valuation task," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 204-214.
    8. 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.
    9. Garcia, Serge & Harou, Patrice & Montagné, Claire & Stenger, Anne, 2009. "Models for sample selection bias in contingent valuation: Application to forest biodiversity," Journal of Forest Economics, Elsevier, vol. 15(1-2), pages 59-78, January.
    10. Owusu, Victor & Owusu, Michael Anifori, 2010. "Measuring Market Potential for Fresh Organic Fruit and Vegetable in Ghana," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 95955, African Association of Agricultural Economists (AAAE).
    11. Luchini, Stéphane & Watson, Verity, 2013. "Uncertainty and framing in a valuation task," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 204-214.
    12. Cho, Seong-Hoon & Yen, Steven T. & Bowker, J.M. & 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, Cambridge University Press, vol. 40(1), pages 267-285, April.
    13. Rihar, Miha & Hrovatin, Nevenka & Zoric, Jelena, 2015. "Household valuation of smart-home functionalities in Slovenia," Utilities Policy, Elsevier, vol. 33(C), pages 42-53.
    14. Lyssenko, Nikita & Martinez-Espineira, Roberto, 2009. "`Been there done that': Disentangling option value effects from user heterogeneity when valuing natural resources with a use component," MPRA Paper 21976, University Library of Munich, Germany, revised 08 Apr 2010.
    15. Wan-Jiun Chen & Jihn-Fa Jan & Chih-Hsin Chung & Shyue-Cherng Liaw, 2022. "Resident Willingness to Pay for Ecosystem Services in Hillside Forests," IJERPH, MDPI, vol. 19(10), pages 1-17, May.
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    17. Silva, Tiago Manuel & Silva, Susana & Carvalho, Armindo, 2022. "Economic valuation of urban parks with historical importance: The case of Quinta do Castelo, Portugal," Land Use Policy, Elsevier, vol. 115(C).
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    19. Gustafsson-Wright, Emily & Asfaw, Abay & van der Gaag, Jacques, 2009. "Willingness to pay for health insurance: An analysis of the potential market for new low-cost health insurance products in Namibia," Social Science & Medicine, Elsevier, vol. 69(9), pages 1351-1359, November.

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