Incentive Compatibility in an Attribute-Based Referendum Model
The manner in which WTP survey responses are elicited has received much attention in the nonmarket valuation literature because of the potential bias that may be introduced via alternate response formats. One issue of particular concern is that of incentive compatibility. Several studies have concluded that response formats that present a series of valuation questions are not incentive compatible. While the single dichotomous choice elicitation format reduces the amount of information collected, multiple-bounded elicitation formats may yield biased, unreliable results. Understanding this trade-off can help provide better information on response formats that will elicit incentive compatible responses and therefore provide realistic and policy-relevant information. This research investigates the effect of the number of multinomial choices presented to respondents in an attribute-based referendum (ABR) format on incentive compatibility of responses. Data was collected from two versions of a mail survey that used an attribute-based description of a hypothetical forest easement program in Michigan's Upper Peninsula and a referendum-style choice between the status quo and various forest easement program scenarios. The first version of the survey presented four choice scenarios to respondents while the second version presented only one choice scenario. Results suggest that the multiple-bound response format improves statistical efficiency due to the statistical significance of all estimated parameters. However, this efficiency may also overestimate WTP. The single-bounded response format displays lower statistical efficiency but may reflect more accurate preferences from respondents. Results lead to a rejection of the hypothesis that the number of choices presented to respondents has no effect on results and have implications for the reliability of nonmarket valuation information from multiple-bound response formats in attribute-based referenda models.
|Date of creation:||2008|
|Date of revision:|
|Contact details of provider:|| Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202|
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
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.:
- John C. Whitehead, 2002. "Incentive Incompatibility and Starting-Point Bias in Iterative Valuation Questions," Land Economics, University of Wisconsin Press, vol. 78(2), pages 285-297.
- Richard Carson & Theodore Groves, 2007.
"Incentive and informational properties of preference questions,"
Environmental & Resource Economics,
Springer;European Association of Environmental and Resource Economists, vol. 37(1), pages 181-210, May.
- Carson, Richard T & Groves, Theodore, 2010. "Incentive and Information Properties of Preference Questions," University of California at San Diego, Economics Working Paper Series qt88d8644g, Department of Economics, UC San Diego.
- Robert Mitchell, 2002. "On Designing Constructed Markets in Valuation Surveys," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 22(1), pages 297-321, June.
- Anthony Burton & Katherine Carson & Susan Chilton & W. Hutchinson, 2007. "Resolving questions about bias in real and hypothetical referenda," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 38(4), pages 513-525, December.
- Nick Hanley & Robert Wright & Vic Adamowicz, 1998. "Using Choice Experiments to Value the Environment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 11(3), pages 413-428, April.
- Taylor, Laura O. & McKee, Michael & Laury, Susan K. & Cummings, Ronald G., 2001. "Induced-value tests of the referendum voting mechanism," Economics Letters, Elsevier, vol. 71(1), pages 61-65, April.
- Boxall, Peter C. & Adamowicz, Wiktor L. & Swait, Joffre & Williams, Michael & Louviere, Jordan, 1996. "A comparison of stated preference methods for environmental valuation," Ecological Economics, Elsevier, vol. 18(3), pages 243-253, September.
- Boxall, Peter C. & Rollins, Kimberly S. & Englin, Jeffrey E., 2002.
"Heterogeneous Preferences For Congestion During A Wilderness Experience,"
34133, University of Guelph, Department of Food, Agricultural and Resource Economics.
- Boxall, Peter & Rollins, Kimberly & Englin, Jeffrey, 2003. "Heterogeneous preferences for congestion during a wilderness experience," Resource and Energy Economics, Elsevier, vol. 25(2), pages 177-195, May.
- Cummings, Ronald G, et al, 1997. "Are Hypothetical Referenda Incentive Compatible?," Journal of Political Economy, University of Chicago Press, vol. 105(3), pages 609-21, June.
- Stevens, T. H. & Belkner, R. & Dennis, D. & Kittredge, D. & Willis, C., 2000. "Comparison of contingent valuation and conjoint analysis in ecosystem management," Ecological Economics, Elsevier, vol. 32(1), pages 63-74, January.
- Bateman, Ian J. & Burgess, Diane & Hutchinson, W. George & Matthews, David I., 2008. "Learning design contingent valuation (LDCV): NOAA guidelines, preference learning and coherent arbitrariness," Journal of Environmental Economics and Management, Elsevier, vol. 55(2), pages 127-141, March.
- Timothy C. Haab & Ju-Chin Huang & John C. Whitehead, .
"Are Hypothetical Referenda Incentive Compatible? A Comment,"
9708, East Carolina University, Department of Economics.
- Timothy C. Haab & Ju-Chin Huang & John C. Whitehead, 1999. "Are Hypothetical Referenda Incentive Compatible? A Comment," Journal of Political Economy, University of Chicago Press, vol. 107(1), pages 186-196, February.
- Kevin J. Boyle & Richard C. Bishop & Michael P. Welsh, 1985. "Starting Point Bias in Contingent Valuation Bidding Games," Land Economics, University of Wisconsin Press, vol. 62(2), pages 188-194.
- Thomas P. Holmes & Kevin J. Boyle, 2005. "Dynamic Learning and Context-Dependence in Sequential, Attribute-Based, Stated-Preference Valuation Questions," Land Economics, University of Wisconsin Press, vol. 81(1).
- Frank Lupi & Michael D. Kaplowitz & John P. Hoehn, 2002. "The Economic Equivalency of Drained and Restored Wetlands in Michigan," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(5), pages 1355-1361.
When requesting a correction, please mention this item's handle: RePEc:ags:aaea08:6477. 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: (AgEcon Search)
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.