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Minimax D-optimal designs of contingent valuation experiments: willingness to pay for environmentally friendly clothes

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  • Ellinor Fackle-Fornius
  • Linda Anna W�nstr�m

Abstract

This paper demonstrates how to plan a contingent valuation experiment to assess the value of ecologically produced clothes. First, an appropriate statistical model (the trinomial spike model) that describes the probability that a randomly selected individual will accept any positive bid, and if so, will accept the bid A, is defined. Secondly, an optimization criterion that is a function of the variances of the parameter estimators is chosen. However, the variances of the parameter estimators in this model depend on the true parameter values. Pilot study data are therefore used to obtain estimates of the parameter values and a locally optimal design is found. Because this design is only optimal given that the estimated parameter values are correct, a design that minimizes the maximum of the criterion function over a plausable parameter region (i.e. a minimax design) is then found.

Suggested Citation

  • Ellinor Fackle-Fornius & Linda Anna W�nstr�m, 2014. "Minimax D-optimal designs of contingent valuation experiments: willingness to pay for environmentally friendly clothes," Journal of Applied Statistics, Taylor & Francis Journals, vol. 41(4), pages 895-908, April.
    • Handle: RePEc:taf:japsta:v:41:y:2014:i:4:p:895-908
    DOI: 10.1080/02664763.2013.858670
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    1. Alberini Anna, 1995. "Optimal Designs for Discrete Choice Contingent Valuation Surveys: Single-Bound, Double-Bound, and Bivariate Models," Journal of Environmental Economics and Management, Elsevier, vol. 28(3), pages 287-306, May.
    2. Barbara J. Kanninen, 1993. "Optimal Experimental Design for Double-Bounded Dichotomous Choice Contingent Valuation," Land Economics, University of Wisconsin Press, vol. 69(2), pages 138-146.
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    1. Chi Thao Dinh & Takuro Uehara & Takahiro Tsuge, 2021. "Green Attributes in Young Consumers’ Purchase Intentions: A Cross-Country, Cross-Product Comparative Study Using a Discrete Choice Experiment," Sustainability, MDPI, vol. 13(17), pages 1-19, September.

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