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Contingent Valuation of Community Forestry Programs in Ethiopia: Observing Preference Anomalies in Double-Bounded CVM

  • Dambala Gelo

    ()

    (Department of Economics, University of Pretoria)

  • Steven F. Koch

    ()

    (Department of Economics, University of Pretoria)

This study examines the potential for anomalous response behaviour effects within the context of double-bounded contingent valuation methods applied to community forestry programs in rural Ethiopia. Anomalous responses considered include shift effects, framing effects and anchoring effects, and these effects are considered within a double-bounded contingent valuation study. The results confirmed the presence of incentive incompatibility and framing effects. However, anchoring effects are not uncovered. After controlling for these biases, the community forestry program considered is shown to offer a welfare gain ranging from Ethiopian Birr (ETB) 20.14 to 22.80. In addition to these welfare benefits, the results raise questions with respect to the validity of previous welfare estimates associated with double-bounded CVM studies in developing countries, suggesting that future studies should control for incentive incompatibility and framing effects bias.

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Paper provided by University of Pretoria, Department of Economics in its series Working Papers with number 201124.

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Length: 33 pages
Date of creation: Nov 2011
Date of revision:
Handle: RePEc:pre:wpaper:201124
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