Accounting for Negative, Zero and Positive Willingness to Pay for Landscape Change in a National Park
In contingent valuation, despite the fact that many externalities manifest themselves as costs to some and benefits to others, most studies restrict willingness to pay to being non-negative. In this paper, we investigate the impact of allowing for negative, zero and positive preferences for prospective changes in woodland cover in two UK national parks, the Lake District and the Trossachs. An extended spike model is used to accomplish this. The policy implications of not allowing for negative values in terms of aggregate benefits are also investigated, by comparing the extended spike model with a simple spike making use of only zero and positive bids, and a model which considers positive bids only. We find that ignoring negative values over-states the aggregate benefits of a woodland planting project by up to 44%.
|Date of creation:||Jun 2008|
|Date of revision:|
|Contact details of provider:|| Postal: Division of Economics, University of Stirling, Stirling, Scotland FK9 4LA|
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- Mark Yuying An & Roberto Ayala, 1996.
"A Mixture Model of Willingness to Pay Distributions,"
- An, Mark Y. & Roberto Ayala, 1995. "A Mixture Model of Willingness to Pay Distributions," Working Papers 95-21, Duke University, Department of Economics.
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- John List & Jason Shogren, 2002.
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Framed Field Experiments
00182, The Field Experiments Website.
- Werner, Megan, 1999. "Allowing for Zeros in Dichotomous-Choice Contingent-Valuation Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(4), pages 479-86, October.
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