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The Provision Point Mechanism and Scenario Rejection in Contingent Valuation

Author

Listed:
  • Peter A. Groothuis
  • John C. Whitehead

Abstract

The provision point mechanism mitigates free riding behavior in economic experiments. In two contingent valuation method surveys, we implement the provision point design. We ask respondents about their perceptions about the success of the provision point mechanism. One of the determinants that identifies who is likely to feel the provision point will be met is the bid itself. We find that respondents who believe that the provision point would not be met are more likely to say no to a contingent valuation dichotomous choice question. The scenario rejection that arises may result in biased willingness to pay estimates. Key Words: Provision Point Mechanism, Contingent Valuation, Willingness to Pay, Public Goods

Suggested Citation

  • Peter A. Groothuis & John C. Whitehead, 2008. "The Provision Point Mechanism and Scenario Rejection in Contingent Valuation," Working Papers 08-01, Department of Economics, Appalachian State University.
    • Handle: RePEc:apl:wpaper:08-01
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    File URL: http://econ.appstate.edu/RePEc/pdf/wp0801.pdf
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    2. Gabriela Mundaca, 2024. "Economic valuation of environmental and health impacts from mining: the case of Peru," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(1), pages 2415-2441, January.
    3. Peter A. Groothuis & Tanga M. Mohr & John C. Whitehead & Kristan Cockerill, 2015. "Payment and Policy Consequentiality in Contingent Valuation," Working Papers 15-04, Department of Economics, Appalachian State University.
    4. Daniel Franco & Luca Luiselli, 2013. "A procedure to analyse the strategic outliers and the multiple motivations in a contingent valuation," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 40(3), pages 246-266, February.
    5. O. Ashton Morgan & William L.Huth & Paul Hindsley, 2017. "Examining the Perceptions and Effects of Survey Consequentiality Across Population Subgroups," Working Papers 17-10, Department of Economics, Appalachian State University.
    6. Franco, Daniel & Luiselli, Luca, 2013. "A procedure to analyse the strategic outliers and the multiple motivations in a contingent valuation: a case study for a concrete policy purpose," MPRA Paper 66498, University Library of Munich, Germany.
    7. Roxana Leitold & Javier Revilla Diez & Van Tran, 2020. "Are we expecting too much from the private sector in flood adaptation? Scenario-based field experiments with small- and medium-sized firms in Ho Chi Minh City, Vietnam," Climatic Change, Springer, vol. 163(1), pages 359-378, November.
    8. Paul R. Hindsley & O. Ashton Morgan, 2022. "The Role of Cultural Worldviews in Willingness to Pay for Environmental Policy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 81(2), pages 243-269, February.
    9. Pamela Wicker & John C Whitehead & Daniel S Mason & Bruce K Johnson, 2017. "Public support for hosting the Olympic Summer Games in Germany: The CVM approach," Urban Studies, Urban Studies Journal Limited, vol. 54(15), pages 3597-3614, November.

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    Keywords

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    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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