Monte Carlo Benchmarks for Discrete Response Valuation Methods
This paper argues that the widespread belief that discrete contingent valuation (CV) questions yield substantially larger estimates of the mean (and the median) willingness to pay (WTP) for nonmarket environmental resources in comparison to estimates from open-ended CV questions is unfounded. A set of Monte Carlo experiments estimate the factors influencing the performance of WTP estimates based on discrete response models. Most of the error in the WTP estimates arises from the specification errors that are common in most of the empirical models used in the literature. These experiments suggest models based on choices where WTP is dominated by non use (or passive use) values are likely to have smaller errors than where large use values influence these decisions.
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|Date of creation:||1996|
|Date of revision:|
|Publication status:||Published in LAND ECONOMICS, Vol. 74, 1998, pages 186-202|
|Contact details of provider:|| Postal: Department of Economics Duke University 213 Social Sciences Building Box 90097 Durham, NC 27708-0097|
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- Kevin J. Boyle & F. Reed Johnson & Daniel W. McCollum & William H. Desvousges & Richard W. Dunford & Sara P. Hudson, 1996. "Valuing Public Goods: Discrete versus Continuous Contingent-Valuation Responses," Land Economics, University of Wisconsin Press, vol. 72(3), pages 381-396.
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- Trudy Ann Cameron, 1992. "Combining Contingent Valuation and Travel Cost Data for the Valuation of Nonmarket Goods," Land Economics, University of Wisconsin Press, vol. 68(3), pages 302-317.
- Bengt Kriström, 1993. "Comparing continuous and discrete contingent valuation questions," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 3(1), pages 63-71, February.
- Joseph Cooper & John Loomis, 1992. "Sensitivity of Willingness-to-Pay Estimates to Bid Design in Dichotomous Choice Contingent Valuation Models," Land Economics, University of Wisconsin Press, vol. 68(2), pages 211-224.
- Anna Alberini, 1995. "Testing Willingness-to-Pay Models of Discrete Choice Contingent Valuation Survey Data," Land Economics, University of Wisconsin Press, vol. 71(1), pages 83-95.
- Cameron, Trudy Ann, 1988. "A new paradigm for valuing non-market goods using referendum data: Maximum likelihood estimation by censored logistic regression," Journal of Environmental Economics and Management, Elsevier, vol. 15(3), pages 355-379, September.
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