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The Effect of Uncertainty on Contingent Valuation Estimates: A Comparison

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  • Shaikh, Sabina L.
  • Sun, Lili
  • van Kooten, G. Cornelis

Abstract

We examine the impact of uncertainty on contingent valuation responses using (1) a survey of Canadian landowners about willingness to accept compensation for converting cropland to forestry and (2) a survey of Swedish residents about willingness to pay for forest conservation. Five approaches from the literature for incorporating respondent uncertainty are used and compared to the traditional RUM model with assumed certainty. The results indicate that incorporating uncertainty has the potential to increase fit, but could introduce additional variance. While some methods for uncertainty are an improvement over traditional approaches, we caution against systematic judgments about the effect of uncertainty on contingent valuation responses.

Suggested Citation

  • Shaikh, Sabina L. & Sun, Lili & van Kooten, G. Cornelis, 2005. "The Effect of Uncertainty on Contingent Valuation Estimates: A Comparison," Working Papers 37025, University of Victoria, Resource Economics and Policy.
  • Handle: RePEc:ags:uvicwp:37025
    DOI: 10.22004/ag.econ.37025
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    Cited by:

    1. John E. Ataguba & Hyacinth E. Ichoku & William M. Fonta, 2008. "Estimating the willingness to pay for community healthcare insurance in rural Nigeria," Working Papers PMMA 2008-10, PEP-PMMA.

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    More about this item

    Keywords

    Environmental Economics and Policy; Land Economics/Use;

    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

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