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Valuing publicly sponsored research projects: Risks, scenario adjustments, and inattention

  • Daniel Burghart
  • Trudy Cameron

    ()

  • Geoffrey Gerdes

Survey-based choice scenarios used to value non-market public goods typically preclude any risk that the benefits described may not be delivered. Our survey specifies explicit risks of (a) outright program failure and (b) program redundancy due to possible private sector substitutes. Additionally, most analyses assume that survey subjects fully accept these scenarios and that all provided information receives their complete attention. Our discounted expected utility model of choice accommodates both these objective risks and the possibility of subjective scenario adjustment or selective inattention by respondents. We then counterfactually simulate willingness-to-pay in the absence of these distortions. Copyright Springer Science+Business Media, LLC 2007

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File URL: http://hdl.handle.net/10.1007/s11166-007-9018-5
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Article provided by Springer in its journal Journal of Risk and Uncertainty.

Volume (Year): 35 (2007)
Issue (Month): 1 (August)
Pages: 77-105

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Handle: RePEc:kap:jrisku:v:35:y:2007:i:1:p:77-105
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=100299

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