Modeling Shifts in Willingness to Pay from a Bayesian Updating Perspective
This paper derives a structural shift empirical specification for a double-bound dichotomous choice contingent valuation methodology premised upon willingness-to-pay (WTP) shifts ensuing from a representative model of respondent Bayesian updating behavior. We demonstrate by way of data simulations that a traditional structural shift specification may often fail at estimating true WTP in this context. Further simulations demonstrate that a simple extension of the traditional structural shift model derived explicitly from our Bayesian framework can correct for much of the WTP bias, with an empirical application confirming the simulation outcomes. Finally, we investigate the relationship between strategic behavior and WTP shifts.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Loomis, John & Ekstrand, Earl, 1998. "Alternative approaches for incorporating respondent uncertainty when estimating willingness to pay: the case of the Mexican spotted owl," Ecological Economics, Elsevier, vol. 27(1), pages 29-41, October.
- Donald M. McLeod & Olvar Bergland, 1999. "Willingness-to-Pay Estimates Using the Double-Bounded Dichotomous-Choice Contingent Valuation Format: A Test for Validity and Precision in a Bayesian Framework," Land Economics, University of Wisconsin Press, vol. 75(1), pages 115-125.
- David Aadland & Arthur Caplan & Owen Phillips, 2007. "A Bayesian examination of information and uncertainty in contingent valuation," Journal of Risk and Uncertainty, Springer, vol. 35(2), pages 149-178, October.
When requesting a correction, please mention this item's handle: RePEc:uwp:landec:v:85:y:2009:i:2:p:308-328. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.