IDEAS home Printed from https://ideas.repec.org/p/umn/wpaper/0804.html
   My bibliography  Save this paper

Exploring Respondent’s Perception of Bid Precision in Non-Market Valuation

Author

Listed:
  • Christopher Azevedo

    (University of Central Missouri)

  • John R. Crooker

    (University of Central Missouri)

  • Brian Pattiz

    (Iowa State University)

Abstract

Bid design is an important component of the nonmarket valuation process. To date, no research has been done on the possible effects of using round dollar amounts. It seems reasonable to believe that respondents may respond to round dollar amounts differently than they would respond to bids that include both dollar and cent amounts. One possibility is that the respondent may infer that the dollar/cent bids are more precise estimates of the true cost than the round dollar amount, and therefore put more thought into their response to survey questions. In order to explore this idea, we test whether the use of a precise versus imprecise bid design influences respondent’s willingness to pay. In particular, our sample of survey recipients was stratified into two groups based on whether they were presented with imprecise or precise bids (round dollar bids or dollar/cent bids). Precise bids were generated by adding or subtracting a randomly-drawn number of cents (between -200 and +200 cents) to each of the imprecise bid levels. We explore this issue in the context of a valuation project concerned with The Battle of Lexington State Historic Site in Lexington, MO.

Suggested Citation

  • Christopher Azevedo & John R. Crooker & Brian Pattiz, 2008. "Exploring Respondent’s Perception of Bid Precision in Non-Market Valuation," Working Papers 0804, University of Central Missouri, Department of Economics & Finance, revised May 2008.
    • Handle: RePEc:umn:wpaper:0804
    as

    Download full text from publisher

    File URL: http://faculty.ucmo.edu/econfinpapers/wpaper/wp0804.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. 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.
    2. Cameron Trudy Ann & Quiggin John, 1994. "Estimation Using Contingent Valuation Data from a Dichotomous Choice with Follow-Up Questionnaire," Journal of Environmental Economics and Management, Elsevier, vol. 27(3), pages 218-234, November.
    3. John Crooker & Joseph Herriges, 2004. "Parametric and Semi-Nonparametric Estimation of Willingness-to-Pay in the Dichotomous Choice Contingent Valuation Framework," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 27(4), pages 451-480, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Azevedo, C.D. & Crooker, J.R. & Pattiz, B., 2012. "Bid Imprecision As A Source Of Hypothetical Bias In Contingent Valuation Estimation: Analysis Of A Survey Of Respondent’S Attitudes For The Battle Of Lexington State Historic Site (Shs)," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 12(2).
    2. Schwarzinger, Michaël & Carrat, Fabrice & Luchini, Stéphane, 2009. ""If you have the flu symptoms, your asymptomatic spouse may better answer the willingness-to-pay question": Evidence from a double-bounded dichotomous choice model with heterogeneous anchori," Journal of Health Economics, Elsevier, vol. 28(4), pages 873-884, July.
    3. Emmanuel Flachaire & Guillaume Hollard, 2006. "Controlling Starting-Point Bias in Double-Bounded Contingent Valuation Surveys," Land Economics, University of Wisconsin Press, vol. 82(1), pages 103-111.
    4. Tilahun, Mesfin & Mathijs, Erik & Muys, Bart & Vranken, Liesbet & Deckers, Jozef A. & Gebregziabher, Kidanemariam & Gebrehiwot, Kindeya & Bauer, Hans, 2011. "Contingent valuation analysis of rural households’ willingness to pay for frankincense forest conservation," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 116085, European Association of Agricultural Economists.
    5. Marcella Veronesi & Anna Alberini & Joseph Cooper, 2011. "Implications of Bid Design and Willingness-To-Pay Distribution for Starting Point Bias in Double-Bounded Dichotomous Choice Contingent Valuation Surveys," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 49(2), pages 199-215, June.
    6. George Parsons & Kelley Myers, 2017. "Fat tails and truncated bids in contingent valuation: an application to an endangered shorebird species," Chapters, in: Daniel McFadden & Kenneth Train (ed.), Contingent Valuation of Environmental Goods, chapter 2, pages 17-42, Edward Elgar Publishing.
    7. Michaël Schwarzinger & Fabrice Carrat & Stéphane Luchini, 2009. ""If you have the flu symptoms, your asymptomatic spouse may better answer the willingness-to-pay question". Evidence from a double-bounded dichotomous choice model with heterogeneous anchori," Post-Print inserm-00636179, HAL.
    8. Lee, Juyong & Cho, Youngsang, 2018. "Inconvenience cost of mobile communication failure: The case of South Korea," Telecommunications Policy, Elsevier, vol. 42(3), pages 241-252.
    9. Farr, Marina & Stoeckl, Natalie & Alam Beg, Rabiul, 2014. "The non-consumptive (tourism) ‘value’ of marine species in the Northern section of the Great Barrier Reef," Marine Policy, Elsevier, vol. 43(C), pages 89-103.
    10. Swallow, Stephen K. & Opaluch, James J. & Weaver, Thomas F., 2001. "Strength-of-Preference Indicators and an Ordered-Response Model for Ordinarily Dichotomous, Discrete Choice Data," Journal of Environmental Economics and Management, Elsevier, vol. 41(1), pages 70-93, January.
    11. Hanemann, W. Michael & Kanninen, Barbara, 1996. "The Statistical Analysis Of Discrete-Response Cv Data," CUDARE Working Papers 25022, University of California, Berkeley, Department of Agricultural and Resource Economics.
    12. Cho, Yongsung & Konishi, Yoshifumi & Easter, K. William, 2007. "Can Rural Communities Comply with the New Arsenic Standard for Drinking Water?," Staff Papers 7353, University of Minnesota, Department of Applied Economics.
    13. Robert J. Johnston & Kevin J. Boyle & Wiktor (Vic) Adamowicz & Jeff Bennett & Roy Brouwer & Trudy Ann Cameron & W. Michael Hanemann & Nick Hanley & Mandy Ryan & Riccardo Scarpa & Roger Tourangeau & Ch, 2017. "Contemporary Guidance for Stated Preference Studies," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(2), pages 319-405.
    14. Chilton, S. M. & Hutchinson, W. G., 2003. "A qualitative examination of how respondents in a contingent valuation study rationalise their WTP responses to an increase in the quantity of the environmental good," Journal of Economic Psychology, Elsevier, vol. 24(1), pages 65-75, February.
    15. Cristiano Cechella, 2011. "The Influence Of Cultural Affinity For The Boost Of Brazilian Investment In Portugal," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(1), pages 59-72, June.
    16. Richard T. Carson & W. Michael Hanemann, & Raymond J. Kopp & Jon A. Krosnick & Robert C. Mitchell & Stanley Presser & Paul A. Rudd & V. Kerry Smith & Michael Conaway & Kerry Martin, 1997. "Temporal Reliability of Estimates from Contingent Valuation," Land Economics, University of Wisconsin Press, vol. 73(2), pages 151-163.
    17. Gemechisa Yadeta Ayana, 2017. "Farmers’ Willingness To Pay For Soil Conservation Practices In Gobu Seyo District, Eastern Wollega Zone, Oromia National Regional State Of Ethiopia," International Journal of Agriculture and Environmental Research, Malwa International Journals Publication, vol. 3(3), June.
    18. Nayga, Rodolfo M., Jr. & Aiew, Wipon & Woodward, Richard T., 2004. "Willingness to Pay for Irradiated Food: A Non Hypothetical Market Experiment," 84th Seminar, February 8-11, 2004, Zeist, The Netherlands 24995, European Association of Agricultural Economists.
    19. Rodríguez, Elsa Mirta M. & Lacaze, María Victoria & Lupín, Beatriz, 2007. "Willingness to pay for organic food in Argentina: evidence from a consumer survey," Nülan. Deposited Documents 1300, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    20. Pere Riera & Raúl Brey & Guillermo Gándara, 2008. "Bid design for non-parametric contingent valuation with a single bounded dichotomous choice format," Hacienda Pública Española / Review of Public Economics, IEF, vol. 186(3), pages 43-60, October.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:umn:wpaper:0804. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Paul Chambers (email available below). General contact details of provider: https://edirc.repec.org/data/decmsus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.