are environmental taxes a free lunch issues in modelling the macroeconomic effects of carbon taxes applied analysis of output and employment effects from revenue neutral environmental taxation depends critically on how the supply side of the economy is modelled despite the long history of theoretical and computable general equilibrium supply side models the empirical basis of much of this work has been quite weak until recently however most econometric attempts to capture factor substitution effects have not been based on theoretically consistent structures this paper examines the methodological issues that underlie these problems and compares the results of imposing environmental taxes in two different econometric modelling structures the implications of theories of endogenous technical progress on the simulation properties of such models are discussed and a simple empirically based model that embodies some of these features is presented

the relative unimportance of a nonmarket willingness to pay for timber harvesting abstract the magnitude of a nonmarket willingness to pay for logging of native forests in southeastern australia is estimated using the contingent valuation method this willingness to pay is apparently motivated by both the monetary and social costs of unemployment and a nonmarket intrinsic production value we speculate that this nonmarket value for production may arise where a traditional land use is involved willingness to pay for intrinsic production value is small 4 in comparison to the nonmarket economic value of reserving the same forests in national parks whilst this result may not be transferable to resource allocation issues which involve significant traditional land use it does suggest that neglect of such a willingness to pay has not significantly prejudiced the results of past benefit cost analyses related to the preservation of natural environments

estimating elasticities of substitution with nested ces production functions where do we stand abstract prompt by an increasing interest by climate change modelers a rich literature estimating elasticities of substitution in a nested ces production framework has recently developed this article reviews such literature we critically describe the nesting structures estimation approaches data sources and aggregation econometric techniques and types of substitution elasticities used by previous literature to offer a comprehensive description of the various options available to a researcher attempting this estimation we also provide suggestions for potential improvements to the estimation process in particular we warn researchers to use ces production functions with caution in empirical applications given their restrictive build in assumptions

semi nonparametric distribution free dichotomous choice contingent valuation abstract we apply a semi nonparametric distribution free estimator for binary discrete response data to the estimation of a dichotomous choice contingent valuation model using this estimator mean and median compensating and equivalent variation can be consistently estimated without making nontheoretically motivated assumptions on consumer preferences the approach is illustrated using a contingent valuation survey of willingness to pay for reduction of risk of premature death due to exposure to hazardous waste we find that a conventional parametric estimator and the proposed estimator give similar estimates of unconditional wtp but that conditional on explanatory variables the estimates are quite different

local acceptance and heterogeneous externalities of biorefineries biofuels can potentially reduce lifecycle greenhouse gas emissions from energy use and help address the climate change problem however the siting and operation of a biofuel production facility can impact the members of the host community both positively e g local jobs and income and negatively e g pollution and noise such ambivalent and heterogeneous external impacts result in either local support or opposition to the facility which in turn becomes a key factor affecting biorefinery location decisions and subsequent success of biorefineries while a number of prior studies have analyzed economic and environmental impacts of biofuels systematic analysis of local acceptability of biofuel production facilities is lacking our study explores factors that influence community attitudes towards biofuel facilities we assess the strength of acceptability or opposition by estimating the local community s willingness to pay wtp either to support or to oppose a proposed biorefinery we posit that such wtp estimates provide a more comprehensive measure of local acceptability results also suggest that county level socio economic characteristics significantly influence these attitudes and wtp

modelling unobserved heterogeneity in contingent valuation of health risks human preferences for alternative levels of health risks can be heterogeneous in this paper a flexible distribution approach to model health values elicited with the dichotomous choice contingent valuation method is considered rigid parametric structures cannot model sample heterogeneity while imposing strong assumptions on the error distribution a mixture of normal distributions is considered which can approximate arbitrary well any empirical distributions as the number of mixtures increases the model is applied to data on willingness to pay for reducing the individual risk of an episode of respiratory illness the mixture distribution model is compared with the rigid probit model using a bayes factor test the results show that the mixture modelling approach improves performance while allowing for the consideration of alternative groups of individuals with different preferences for health risks

willingness to pay for voluntary climate action and its determinants field experimental evidence the determinants of individual voluntary climate action vca in combating climate change and its potential scale are frequently debated in public but largely underresearched we provide estimates of the willingness to individually reduce eu greenhouse gas emissions by one ton using the european union emissions trading scheme estimates are derived from an online field experiment with a large highly heterogenous and internet representative sample of voting aged germans jointly estimating willingness to pay wtp non indifference to vca and prior knowledge we uncover important determinants of preferences for vca such as education the information structure among the population and exogenous environmental conditions

estimation using contingent valuation data from a dichotomous choice with follow up questionnaire reply abstract our original article proposed that the two yes no willingness to pay wtp responses produced by this survey format should be viewed as a pair of jointly distributed correlated discrete random variables the comparison model the conventional approach to estimation using these types of data contained a programming error correction alters the results from the comparison model but our original claim that estimation by conventional methods can produce misleading inferences if ours is the appropriate specification still stands this is especially true if negative wtp is precluded when e wtp is calculated

heterogeneity and emotions in the valuation of non use damages caused by oil spills oil spills are capable of causing major environmental insults that raise the emotional loads of individuals across society in this paper we consider the role of emotions in heterogeneous responses of individuals in the non market valuation of an oil prevention program in spain heterogeneity is modeled with a smoothly mixing regression smr model that allows researchers to explain the probability that individuals belong to the latent segments of wtp the results show that heterogeneity in wtp responses is explained by the specific emotional reactions of individuals upset sadness indifference rather than by their socioeconomic characteristics thus the investigation of the emotional reactions of individuals can provide useful tools for the design of non market valuation studies providing more accurate predictions of the potential behavior of individuals in constructed markets for damage assessment

a framework for scaling and framing policy problems in sustainability abstract it is argued that a necessary but lacking component of our approach in seeking policy responses to sustainability issues is some repeatable means whereby the relative magnitude and characteristics of these various policy problems faced in a given context can be analysed and described to this end a simple and tentative framework is constructed based on the definition of the key attributes which shape policy problems pertaining to environmental change these are spatial scale of cause and effect magnitude timing and longevity of possible impacts reversibility mensurability complexity and connectivity nature of cause s relevance to the given polity tractability availability and acceptability of means public concern and existence of goals these attributes inform a general taxonomy of micro meso and macro problems the attributes and the taxonomy are described with supporting examples to illustrate possible application of the framework it is discussed briefly in the contexts of operationalising the precautionary principle and policy instrument choice it is concluded that the framework can help focus debate and operationalise vague principles introduce relativity into the notion of sustainability and make policy choice more efficient

determinants of the structure of u s foreign trade 1958 1976 abstract the heckscher ohlin model with three direct factor inputs is borne out for u s net exports of manufactures in annual cross section regressions for 1958 1976 the coefficient on unskilled labor became significantly more negative over the period and there is evidence that the negative sign on physical capital may reflect the inclusion of natural resource industries further analysis based upon 1960 and 1970 census years suggests the importance as well of skill and technological variables calculations of the total factor requirements of u s trade uphold the leontief paradox for 1958 but not for 1972

preservation or use a contingent valuation study of wilderness designation in utah evidence of strong opposition to wilderness proposals in utah suggested that the non market value of retaining those areas in multiple use management might be significant a contingent value analysis of both supporters and opponents of the two major proposals for wilderness designation in utah indicated that there existed significant non market willingness to pay on the part of opponents and that standard contingent valuation practice which does not explicitly consider these values could lead to a mis estimation of aggregate willingness to pay

respondent experience and contingent valuation of environmental goods abstract respondent experience i e a respondent s information set has long been suspected to influence contingent valuation estimates of environmental values we assess the influence of experience by explicitly modeling the relationship between respondent experience and both fitted individual resource values and the conditional variance of these estimated values using three different joint specifications for experience and wtp normal censored normal poisson censored normal and zero inflated poisson censored normal we find discrete jumps in resource values as experience increases from zero and that more experienced respondents have smaller conditional variances simulation of arbitrary levels of experience allows standardization of the amount of information when developing welfare estimates

a randomized response approach to dichotomous choice contingent valuation in this paper we combine dichotomous choice contingent valuation dc cv with the randomized response rr method for asking sensitive survey questions rr increases respondents anonymity by allowing them to answer a sensitive question without revealing with certainty their true response we combine rr with dc cv to test for response effects in the valuation of a public good in a setting of expected social pressure while there are practical implementation issues our findings suggest that the rr technique is a useful tool for exploring social context effects rather than generalize from our pre test results we instead emphasize the development of the experimental technique

optimal bid selection for dichotomous choice contingent valuation surveys abstract this paper develops a model for optimal survey design for the dichotomous choice contingent valuation method that finds the bid amounts as well as the sample sizes corresponding to each bid the model uses an iterative procedure to select the survey design that minimizes the mean square error of the welfare measure a set of monte carlo simulations shows that the model produces significantly lower mean squared errors for the welfare estimate than the next best model produces survey design under alternative assumptions regarding the statistical distribution of the welfare measure is also addressed the model produced significantly different survey designs depending on whether the distribution was assumed to be symmetric or asymmetric

bayesian analysis of interval data contingent valuation models and pricing policies the general aim of a contingent valuation survey is to elicit the willingness to pay wtp of respondents for some public commodity without a clear market price this could be a program to protect some environmental resource or as in our application the access to a recreational area of particular interest in this context we want to accommodate the possibility of zero wtp and we need to deal with the fact that observations arise as intervals for wtp rather than point observations we propose a flexible bayesian statistical analysis of wtp as a function of characteristics of the respondents that formally incorporates this structure through a mixture model we consider model uncertainty and pay particular attention to the predictive distribution of revenue if a certain entry price were asked the latter is an important tool for deriving pricing policies

input substitution effect in china s chemical industry evidences and policy implications abstract the chemical industry is one of the six high energy consuming and emission intensive sectors in china and the chinese government has focused its attention on energy saving and emissions reduction in the sector with the aim of contributing to the objective of energy saving and emission reduction in the sector this article studies the external substitution relationship of capital energy and labor energy using the translog production function and ridge regression the results are as follow the output elasticities of energy labor and capital are positive the substitution elasticities of capital labor capital energy and labor energy are positive and stable and their values are close to 1 which indicates that the three factors are substitutes for one another furthermore based on the above function we measure the level of energy saving and emissions reduction under different scenarios in 2012 policy implications of the results are provided

the effect of protest votes on the estimates of wtp for use values of recreational sites contingent valuation studies are often characterized by a considerable number of protest responses which may cause selectivity bias on the final estimates for wtp sample selection models can detect and if necessary correct selectivity bias in economic applications where the relevant dependent variable is continuous sample selection models are generally estimated using heckman s 2 step method rather than the fiml estimator either method has its own drawback computational complexity for the fiml method susceptibility to collinearity problems for the 2 step method using data on valuation of forest resources for recreational use we analyse the performance of the two estimators in this application given the presence of some collinearity the fiml is preferred to the 2 step method a procedure is outlined to deal with selectivity problems in similar settings

a new paradigm for valuing non market goods using referendum data maximum likelihood estimation by censored logistic regression abstract this paper challenges the w m hanemann amer j agr econom 66 332 341 1984 and c sellar j p chavas and j r stoll j environ econom management 13 382 390 1986 utilizations of logit models to estimate the value of non market resources from referendum survey data these data are more informative than conventional choice data the random utility interpretation of logit models is therefore too restrictive bypassing the utility function entirely it will be shown that parameters and standard errors for utility theoretic inverse hicksian demand functions can be extracted directly and much more simply estimated demand functions need not be limited to those corresponding to the linear in parameters utility difference specifications which can be handled by packaged logit programs

a note on international trade and market structure as exports become an increasing part of industry sales the determinants of a firm s international position become increasingly important tests have supported single factors such as product life cycle lutz and green 1983 as well as multi factor models to explain the determinants of industry imports and exports stern and maskus 1981 harkness and kyle 1975 baldwin 1971 this study also presents a multi factor analysis of the determinants of u s trade patterns this study utilized the spi strategic planning institute data set which allows research at the business unit product line level results indicate that productivity and product development are the principal characteristics of high export percentage business units these findings are especially true for nonconsumer industries thus to the degree that business are concerned over the short term costs of product development direct or indirect for example insurance government aid may be required to promote u s export industries

alternative approaches for incorporating respondent uncertainty when estimating willingness to pay the case of the mexican spotted owl abstract this paper explores the sources and patterns of respondents uncertainty regarding their willingness to pay wtp and presents alternative approaches for incorporating this uncertainty into estimation of the logit model recently proposed approaches are compared to methods proposed in this paper which allows for incorporation of uncertainty regarding both yes and no responses these approaches are evaluated by comparing the goodness of fit and variability of mean wtp extreme recoding of uncertain yes responses as no responses reduces the logit goodness of fit and the precision of the wtp estimate incorporating the degree of uncertainty of yes responses results in the highest goodness of fit and the smallest variability of mean wtp among the various models addressing uncertainty a regression model is used to determine the significant determinants of respondent uncertainty

factor substitution in u s manufacturing does plant size matter we use micro data for 10 412 u s manufacturing plants to estimate the degrees of factor substitution by industry and by plant size we find that 1 capital labor energy and materials are substitutes in production and 2 the degrees of substitution among inputs are quite similar across plant sizes in a majority of industries two important implications of these findings are that 1 small plants are typically as flexible as large plants in factor substitution consequently economic policies such energy conservation policies that result in rising energy prices would not cause negative effects on either large or small u s manufacturing plants and 2 since energy and capital are found to be substitutes the 1973 energy crisis is unlikely to be a significant factor contributing to the post 1973 productivity slowdown

use of dichotomous choice nonmarket methods to value the whooping crane resource market prices for endangered wildlife species rarely exist when prices do exist they arc not likely to reflect accurately individual preferences both consumptive uses such as hunting fishing and trapping boyle and bishop 1985 stou and johnson brookshire eubanks and randall and more esoteric benefits such as viewing and existence values must be considered this article is addressed to the valuation of whooping cranes grus americana a prominent endangered species the purpose of this article is to present a methodology for estimating nonconsumptive benefits associated with the existence of an endangered species a dichotomous choice form of contingent valuation is applied to quantify individuals economic surplus associated with preservation of the whooping crane resource specific issues and limitations of the empirical approach are discussed some of which have been previously examined by bishop and heberlein 1979 and hanemann the present paper expands upon earlier work in several ways fit in addition to discussing the above issues a unique application of the approach to an endangered species is presented second three model specifications are examined two of which arc consistent with utility theory and one which is not hanemann ti again following hanemann economic surplus is estimated at the sample median as well as the mean the dii cussion of the last two issues sheds sit on their implications for estimation of economic surplus throughout the article the suitability of alternative estimation techniques for dichom mous choice or referendum style data is examined the methodological and empirical results are relevant to a number of cumnt issues regarding model specification choice of binary response model and choice of estimator for equivalent surplus hanemann boyle and bishop 1984 sellar chavas and stoll

prioritizing payment for environmental services using nonmarket benefits and costs for optimal selection abstract this article provides a practical applied analysis of optimal targeting in agricultural land preservation comparing the performance of four alternative targeting strategies nonmarket benefit data and hedonic cost estimates are used for parcels in sussex county delaware the results show that branch and bound optimization opt does not significantly outperform the much simpler benefit cost ratio targeting bcrt however significant losses of potential net benefits occur when applied methods overlook either benefits or costs in this application benefit targeting bt and cost targeting ct significantly underperform both opt and bcrt with bt underperforming all other methods

the contingent valuation debate why economists should care t he contingent valuation method involves the use of sample surveys questionnaires to elicit the willingness of respondents to pay for generally hypothetical projects or programs the name of the method refers to the fact that the values revealed by respondents are contingent upon the constructed or simulated market presented in the survey a spirited and occasionally mean spirited battle over such methods is currently being waged involving competing factions within the federal government economists and lawyers representing business and environmental groups and interested academics as well at issue is a seemingly quite specific question should environmental regulations currently under development at both the department of the interior and the department of commerce sanction the use of the contingent valuation method in estimating the damage done by spills of oil chemicals or other substances covered by federal law more generally the debate raises broad questions about what economists have to say about the values that individuals place on public or private goods the two papers that follow this one make cases for and against the use of the contingent valuation method my aim here is to provide an overview of the technique and the debate surrounding it i also want to suggest why this debate should matter to economists both professionally and in their roles as citizens and consumers

flexible functional form estimation of willingness to pay using dichotomous choice data abstract this paper introduces fully flexible semi nonparametric methods for calculating willingness to pay wtp bounded between zero and the respondent s income for dichotomous choice contingent valuation a method to estimate median wtp using fully flexible functional forms is also presented finally the numerical illustration demonstrates the importance of considering jensen s inequality in calculating wtp with nonlinear models

the own wage elasticity of labor demand a meta regression analysis firms labor demand responses to wage changes are of key interest in empirical research and policy analysis however despite extensive research estimates of labor demand elasticities remain subject to considerable heterogeneity in this paper we conduct a comprehensive meta regression analysis to re assess the empirical literature on labor demand elasticities building on 942 elasticity estimates from 105 different studies we identify sources of variation in the absolute value of this elasticity heterogeneity due to the theoretical and empirical specification of the labor demand model different datasets used or sectors and countries considered explains more than 80 of the variation in the estimates we further find substantial evidence for the presence of publication selection bias as estimates of the own wage elasticity of labor demand are upwardly inflated

flexible mixture distribution modeling of dichotomous choice contingent valuation with heterogenity abstract this paper considers the performance of a model of mixture normal distributions for dichotomous choice contingent valuation data which allows the researcher to consider unobserved heterogeneity across the sample the model is flexible and approaches a semi parametric model since the normality assumption can be removed by augmenting the number of mixture distributions bayesian inference allows for simple estimation of the model and is particularly appropriate for conducting inference with finite data sets the proposed model is compared with other semi parametric and parametric approaches using monte carlo simulation under alternative assumptions regarding heteroskedasticity and heterogeneity in sample observations it is found that the mixture normal model reduces bias and improves performance with respect to an alternative semi parametric model particularly when the sample is characterized by heterogeneous preferences the application of the model to empirical data on the recreational value of natural areas in the canary islands confirmed the expected results

semiparametric estimation of the binary choice model for contingent valuation this paper is concerned with the estimation of the binary choice model without imposing any parametric structure on the distribution of the stochastic term we adapt the distribution free maximum l

on the estimation of factor substitution in the translog model the conventional approach to computation of the allen partial elasticities of substitution aes in the framewo rk of the translog production function requires to estimate a set of multivariate input demand functions this paper proposes an alternati ve way to compute the aess requiring only to estimate elasticities v ia a truncated single cost share equation value added separability and pairwise factor substitutabilities have both been validated under the nonlinear restriction the achievements of the alternative appro ach are by and large consistent with those of the conventional approa ch and with those in some of the existing studies copyright 1987 by mit press

limited dependent variables in willingness to pay studies applications in health care the appropriate technique for econometric analysis of wtp willingness to pay data is an issue which has not been addressed in many studies of wtp for health and health care this paper argues that whether an open ended question or a payment scale approach is adopted the way in which wtp is recorded means that limited dependent variable models are more appropriate than standard regression analysis data from an open ended question on wtp for maternity care contain a large proportion of zeros and the evidence suggests that a two part specification performs better than ols or a standard tobit model if the payment scale method is adopted our argument suggests that grouped data regression is an appropriate econometric technique in practice with data from a study in northern norway the results from ols and grouped data regression are broadly similar

electricity demand of manufacturing sector in turkey a translog cost approach abstract this paper models factor demand for manufacturing sector in turkey we estimated a translog cost function with four factor consist of capital labor intermediate input and electricity over the 1980 2001 our objective taking in the consideration electricity as production input was twofold on the one hand to estimate the price elasticity of electricity demand in manufacturing sector and on the other hand to use cross price and morishima elasticities of substitution results for structural analysis regarding effects of electricity liberalization which initiated in 2001 empirical result shows that electricity demand is relatively price sensitive 0 85 our result in terms of electricity price is consistent with the previous studies while electricity labor and electricity capital inputs are complementary results indicate the existence of substitution possibilities between electricity and intermediate input this means that changes in electricity prices have impact on labor demand and investment demand these results have important implications for public policy

referendum design and contingent valuation the noaa panel s no vote recommendation this paper considers the effects for offering a would not vote option in contingent valuation cv questions framed using the referendum format this approach arises from a suggestion made by the national oceanic and atmospheric administration s noaa panel on contingent valuation the noaa panel was asked to evaluate the use of this method for estimating the economic value of nonmarketed environmental resources in the context of natural resource damage assessments this test used the cv questionnaire developed for the study of the exxon valdez oil spill conducted by the state of alaska with in person interviews the findings suggest that when those selecting the would not vote response are treated as having voted against the program a conservative coding offering this option does not alter 1 the distribution of for and against responses 2 the estimates of willingness to pay derived from these choices or 3 the construct validity of the results

the product life cycle and the export position of the united states the present study analyzed trade in 4 digit level manufacturing categories over time for 4 nations including the united states to ascertain the relevance of the product life cycle theory of such trade the level of technological input was controlled for the result indicate that the theory has at least some explanatory relevance for 3 of the 4 countries including the united states

binary choice valuation studies with heteregeneous preferences regarding the program being valued we investigate the effect of respondents heterogeneous preferences regarding the good to be valued in binary choice contingent valuationstudies this is especially important when the valuation options give rise to both highly negative and highly positive attitudes the survey design employs questionnaires which include separate items for willingness to favorandwillingness to contribute in monetary terms to the provision of the good in light of our analysis eliciting respondents differentpreferences for the project first without monetary considerations wouldimprove the wtp estimates as welfare measures our results alsosuggest that nonparametric estimation could offer another solution foraccounting for preference heterogeneity nonparametric estimation is less sensitive to those no responses which are in fact not intended toreflect the respondents wtp as such but merely to express their dislikefor the good at issue

spike models in contingent valuation spike models allow for a nonzero probability of zero willingness to pay in referendum style contingent valuation experiments they include many of the often used models as special cases and allow various analyses that are not possible in standard applications in this paper the economic rationale for the spike models and their estimation techniques are discussed and empirical illustrations are provided one study suggests that mean willingness to pay is zero and both studies strongly suggest that median wtp is zero these results have some bearing on the continuing debate of the incentive properties of hypothetical surveys and the construction of scenarios in contingent valuation experiments

allowing for zeros in dichotomous choice contingent valuation models dichotomous choice contingent valuation data are modeled using a mixture distribution the standard parametric survival model is modified such that respondents in the lowest willingness to pay category may have either zero willingness to pay or a small positive willingness to pay in comparison to the standard model the mixture model leads to a dramatic reduction in estimates of mean willingness to pay covariates such as income are found to be more significant in determining the positive portion of the distribution of willingness to pay

the economic benefits of reducing the environmental effects of landfills heterogeneous distance decay effects this paper estimates the economic benefits of different alternative policies considered for reducing the external effects caused by the utilization of landfills in solid waste management the preferences of the local population in the surrounding areas of a landfill are evaluated utilizing a discrete choice experiment in which subjects are presented with alternative policy decisions that involve reducing the material processed through the landfill various models were employed in order to capture heterogeneous preferences resulting in a mixture of normals modelling approach mn mnl outperforming other alternative models of heterogeneity the results show that the policy of moving the landfill away from the population does not provide the most benefits when compared to a policy of increasing recycling in the household the economic benefits of the waste management policies are heterogeneous across the population surrounding the landfill and so the distance decay functions thus the economic benefits for most waste management policies can increase or decrease the further away the subject lives from the landfill depending on the preferences of his her segment and the type of policy employed

estimating the adoption of bt eggplant in india who benefits from public private partnership the study analyzes ex ante the adoption of insect resistant bt eggplant technology in india farmers willingness to pay wtp is estimated using the contingent valuation method given the economic importance of insect pests in eggplant cultivation the average wtp for bt hybrids is more than four times the current price of conventional hybrid seeds since the private innovating firm has also shared its technology with the public sector proprietary hybrids will likely get competition through public open pollinated bt varieties after a small time lag this will reduce farmers wtp for bt hybrids by about 35 thus decreasing the scope for corporate pricing policies nonetheless ample private profit potential remains analysis of factors influencing farmers adoption decisions demonstrates that public bt varieties will particularly improve technology access for resource poor eggplant producers the results suggest that public private partnership can be beneficial for all parties involved 2006 published by elsevier ltd

negative values in vickrey auctions some people assign negative values for new products sold on laboratory auction blocks i e irradiated meat we explore bidding behavior in two vickrey auctions when people have positive and negative induced values for the good aggregate bidding in the second price auction is precise but biased highest value positive bidders tend to overstate benefits whereas lowest negative bidders understate losses in contrast bidding behavior in the random nth price auction is demand revealing irrespective of induced value but it is imprecise examining on and off margin bidding behavior we cannot conclude that any segments of demand are significantly different than the demand revealing regression line

testing willingness to pay models of discrete choice contingent valuation survey data this paper considers models of willingness to pay wtp based on dichotomous choice contingent valuation survey data and examines the effect of the survey design on tests of goodness of fit simulations show that eliciting single binary responses result in tests that have low power in detecting departures from the maintained distribution of wtp unless the sample size is truly large the power of the tests improves if a follow up question and a moderate number of sets of bid values are used and if the bids are not placed on the extreme tails of the wtp distribution

a nonhomothetic generalized leontief cost function based on pooled data factor demand studies of komiya ozaki lau and tamura based upon detailed cross section data on individual production units have found that the nonhomothetic factor limitational nht fl demand system a nonhomothetic version of the leontief fixed coefficient model well explains the data these results however have mostly been ignored in the current literature on flexible functional forms and in fact none of the well known nonhomothetic flexible cost function forms includes the nht fl model i introduce a new nonhomothetic form of the generalized leontief gl cost function which includes the nht fl model as a special case empirical application to a pooled data set of the japanese iron steel industry indicates that his form is superior to the translog diewert wales gl and berndt khaled gl forms copyright 1990 by mit press

parametric and semi nonparametric estimation of willingness to pay in the dichotomous choice contingent valuation framework standard procedures for extractingwillingness to pay wtp from dichotomouschoice cv questionnaires rely heavily uponparametric assumptions regarding thedistribution and form of wtp in the sampledpopulation however theory provides littleguidance regarding which parametricspecification to use and the resulting wtpestimates can be sensitive to the selectionsmade here we compare and contrast severalparametric and semi nonparametric estimatorsthat have been proposed in the literature examining the sensitivity of the resulting wtpestimates to the underlying distribution ofpreferences and the estimation procedureemployed

information and effort in contingent valuation surveys application to global climate change using national internet samples this contingent valuation study investigates the issues of information access and respondent effort and is based on a series of national internet samples the focus is on a split sample treatment basic information bi versus enhanced information ei in the latter significantly expanded information is provided about global climate change and the kyoto protocol using a referendum format we compare the treatment effect bi versus ei on willingness to pay wtp we develop measures of respondent effort in accessing optional information through the technology of web based surveys and jointly model effort and wtp using a simultaneous estimation approach results support the use of the joint modeling approach for objective measures of respondent effort and wtp respondent effort is shown to be positively and significantly related to wtp however use of the optional menu is rather modest counts of pages and time spent and is highly variable both across pages and respondents

dichotomous choice contingent valuation with dont know responses and misreporting a new approach is presented that simultaneously deals with misreporting and don t know dk responses within a dichotomous choice contingent valuation framework utilising a modification of the standard bayesian probit framework a gibbs with metropolis hastings algorithm is used to estimate the posterior densities for the parameters of interest several model specifications are applied to two contingent valuation datasets one on wolf management plans and one on the us fee demonstration program we find that dks are more likely to be from people who would be predicted to have positive utility for the bid therefore a dk is more likely to be a yes than a no we also find evidence of misreporting primarily in favour of the no option the inclusion of dk responses has an unpredictable impact on willingness to pay estimates since it impacts differently on the results for the two datasets we examine copyright c 2009 john wiley sons ltd

discrete choice under preference uncertainty an improved structural model for contingent valuation abstract this paper is concerned with discrete choice contingent value estimation in the presence of response errors we attempt to extend the theoretical frameworks developed by hanemann 1984 amer j agric econom 66 332 341 and cameron 1988 j environ econom management 15 355 379 by introducing preference uncertainty with individual respondents we assume that respondents have incomplete knowledge about their true valuation of a nonmarket resource and thus may give wrong yes no answers on whether or not to pay a given bid amount for the resource a post decisional confidence measure for each observed yes no answer is elicited for characterizing the degree of preference uncertainty with the help of this confidence measure we develop an improved structural model for deriving value estimates data from a forest environment valuation survey are used for the empirical estimations

differences between willingness to pay estimates from open ended and discrete choice contingent valuation methods the effects of heteroscedasticity most comparative studies find that the discrete choice contingent valuation method dc cvm yields higher willingness to pay wtp estimates than the open ended oe format in this paper we discuss and test several hypotheses to explain why wtp estimates from oe and dc cvm questions differ we find that wtp estimates from discrete choice data are very sensitive to assumptions made about the random utility in particular violation of the homoscedasticity assumption may lead to biased wtp estimates if the error terms are correlated with the cost this violation was a main source of difference in wtp estimates in our studies

can defaults save the climate evidence from a field experiment on carbon offsetting programs individual preferences for environmental policies can be influenced by the frame in which choices and decisions are presented in this paper we present results of a field experiment on the contributions to carbon offsetting programs under two alternative treatments for the default option the opt in treatment asked subjects to pay for the policy proposal while the opt out treatment asked subjects if they wanted to be excluded from payment for the policy proposal the results show that the frame of the default option had a significant effect on the amount of money paid for the policy proposal subjects were more likely to accept the policy proposal if the default option was the opt out treatment the results have implications for the design of environmental policies

addressing negative willingness to pay in dichotomous choice contingent valuation this paper has four purposes first we outline the controversy surroundingthe issue of negative willingness to pay wtp in contingent valuation cv studies second we use monte carlo simulation to examine theperformance of alternative distributionalassumptions in estimating wtp in the presenceof varying proportions of the populationholding negative wtp values we focus ondichotomous choice cv dc cv where negativewtp values may be especially difficult todetect third we extend the simulation toinvestigate the performance of the mixturemodels that have recently been proposed forhandling identifying non positive wtp values fourth we extend the simulation to investigatethe performance of the nonparametric lowerbound turnbull approach results indicate thatthe relative performance of the dc cv modelingalternatives evaluated here which assumepositive wtp varies across the simulationsetting e g proportion of negative wtp butnone can be said to reasonably solve theproblem ex post this underscores theimportance of ex ante efforts to identify ifnegative wtp is likely to be prominent in agiven valuation setting in such cases appropriately handling negative wtp must beaddressed through ex ante survey design andmodeling choices that allow negative wtp

the product life cycle theory empirical evidence this paper presents 3 empirical tests of the product life cycle theory based on u s trade data and on a relatively new data series providing information about a larger number of products and at a lower level of aggregation than the data used previously the results of the tests strongly support the hypothesis that industrial product groups behave in the manner predicted by the product life cycle theory on world markets in the case of individual products however the results provide less support for the theory the policy implication is that development strategies should rely on industrial sectors rather than on individual commodities

efficient estimation methods for closed ended contingent valuation surveys closed ended contingent valuation surveys can be very useful in the evaluation of nonmarket resources respondents merely state whether they would accept or reject a hypothetical threshold amount either as payment for giving up access to the resource or as a fee for its use the authors develop a maximum likelihood procedure which exploits the variation in the threshold values to allow direct and separate point estimates of regression like slope coefficients and error standard deviations without truncation bias their illustration uses data from a survey of recreational fisherman to examine factors which influence individuals willingness to pay copyright 1987 by mit press

contingent valuation and social choice the contingent valuation method for estimating the existence value of natural resources is examined for psychophysical robustness statistical reliability and economic sensibility extensions of standard models for willingness to pay and suitable econometric techniques for analyzing these models are developed the analysis is applied to a series of experiments on the value of preserving wilderness areas in the western united states the results call into question the reliability of the cv method for estimating existence values

nonparticipation or misspecification the impacts of nonparticipation on dichotomous choice contingent valuation dichotomous choice or referendum contingent valuation surveys have become the predominate choice for valuing goods and services otherwise not valued in a standard market nonmarket goods and services a number of researchers have recently recommended that dichotomous choice contingent valuation studies include a follow up question to all no responses to determine whether the no response is a result of unwillingness to pay or nonparticipation if the goal of the study is to investigate the impact of covariates on either mean willingness to pay or the probability of nonparticipation simple identification of indifferent individuals will not suffice a simulation study shows that existing econometric models designed to account for nonparticipation are extremely sensitive to misspecification bias accurate identification of the probability of nonparticipation is hampered by potential misspecification of the distribution of willingness to pay

modelling willingness to pay responses from dichotomous choice contingent valuation surveys with zero observations modelling household behaviour with the data from dichotomous choice contingent valuation dccv surveys is often complicated by zero willingness to pay wtp responses in the sample to deal with the zero responses a two equation model is considered which incorporates a two level decision structure a decision on whether to participate in having wtp and a decision on the wtp amount conditional on deciding to participate and two separate stochastic processes that determine the probability and conditional level of wtp are featured the model is empirically applied to household survey data in which the dccv questions concerned the benefits of air quality improvement in korea to put the issue of the two equation model in perspective this paper also experiments with economic and econometric specifications utility theoretic restriction and heteroscedasticity it is shown how failure to allow for the restriction distorts aggregate benefit estimates and the existence of heteroscedasticity in error term is

inference and optimal design for a welfare measure in dichotomous choice contingent valuation this paper considers the use of contingent valuation to estimate non market benefits from separately valued nested goods survey respondents were asked referendum wtp questions regarding either a scheme to protect the whole area of a wetland or a

fuzzy logic and preference uncertainty in non market valuation in seeking to value environmental amenities and public goods individuals often have trouble trading off the vague good or amenity against a monetary measure valuation in these circumstances can best be described as fuzzy in terms of the amenity being valued perceptions of property rights and the numbers chosen to reflect values in this paper we apply fuzzy logic to contingent valuation employing a fuzzy clustering approach for incorporating preference uncertainty obtained from a follow up certainty confidence question we develop a fuzzy random utility maximization frum framework where the perceived utility of each individual is fuzzy in the sense that an individual s utility belongs to each cluster to some degree the model is then applied to a swedish survey that elicited residents willingness to pay for enhanced forest conservation and to a canadian survey of agricultural landowners that elicited their willingness to accept compensation for a tree planting program both the wtp and wta measures we obtain using the fuzzy approach are well below those obtained using standard probability methods based on goodness of fit measures and monte carlo experimentation a case can be made for using a fuzzy preference approach for modeling preference uncertainty as opposed to incorporating respondent uncertainty within the random utility maximization framework

capital energy substitution evidence from a panel of irish manufacturing firms abstract we use a translog cost function to model production in the irish manufacturing sector over the period from 1991 to 2009 we estimate both own and cross price elasticities and morishima elasticities of substitution between capital labour materials and energy we find that capital and energy are substitutes in the production process across all firms we find that a 1 rise in the price of energy is associated with an increase of 0 04 in the demand for capital the morishima elasticities which reflect the technological substitution potential indicate that a 1 increase in the price of energy causes the capital energy input ratio to increase by 1 5 the demand for capital in energy intensive firms is more responsive to increases in energy prices while it is less responsive in foreign owned firms we also observe a sharp decline in firms responsiveness in the first half of the sample period

parametric and semi parametric modelling of vacation expenditures we analyse several limited dependent variable models explaining the budget share that dutch families spend on vacations to take account of the substantial number of zero shares two types of models are used the first is the single equation censored regression model we estimate and test several parametric and semi parametric extensions of the tobit model second we consider two equation models in which the participation decision and the decision on the amount to spend are treated separately the first decision is modelled as a binary choice model the second as a conditional regression we estimate and test parametric and semi parametric specifications

willingness to pay and sensitivity to time framing a theoretical analysis and an application on car safety stated preference sp surveys attempt to obtain monetary values for non market goods that reflect individuals true preferences numerous empirical studies suggest that monetary values from sp studies are sensitive to survey design and so may not reflect respondents true preferences this study examines the effect of time framing on respondents willingness to pay wtp for car safety we explore how wtp per unit risk reduction depends on the time period over which respondents pay and face reduced risk in a theoretical model and by using data from a swedish contingent valuation survey our theoretical model predicts the effect to be nontrivial in many scenarios used in empirical applications in our empirical analysis we examine the sensitivity of wtp to an annual and a monthly scenario our theoretical model predicts the effect from the time framing to be negligible but the empirical estimates from the annual scenario are about 70 higher than estimates from the monthly scenario

determinants of visitors willingness to pay for the national marine park of zakynthos greece abstract we examined the influence of visitors profile information sources environmental dispositions and visit evaluation on visitors willingness to pay wtp for the national marine park of zakynthos regarding wtp amounts pledged parameters of visit evaluation were the most significant predictors the estimated annual revenue that could be gained could cover the operating costs of the protected area management body visitor and visit characteristics were not significant determinants of visitor responses to the payment principle question while they explained a relatively small amount of variation in the wtp amount multiple regression model nationality was not a significant predictor of wtp all the same greek visitors showed more signs of pro environmental attitudes than foreign ones non use values dominated over use values and higher wtp amounts were associated with bequest value an alternative classification of the valuation system alleged to justify wtp is proposed where option value could be arranged together with use value components under the assumption that future use could still be regarded as another form of use value moreover existence and bequest values could be approached separately under the hypothesis that the former is expected to be associated with relatively lower wtp amounts pledged while the latter is expected to lead to relatively higher wtp amounts our study adds to the complexity and context dependency of wtp determinants park managers are suggested to organize environmental education programs that could decrease visitors consensus estimation error and act as a feedback through word of mouth information gained by friends and relatives

the value of household water service quality in lahore pakistan most existing literature focuses on the benefits of establishing basic drinking water access for unserved populations the extensive water supply margin in contrast this article examines the intensive margin the benefits of improving water service to under served households a growing population in developing country cities we use contingent valuation to estimate willingness to pay wtp for improved piped water quality and reductions in supply interruptions among a sample of 193 households in lahore pakistan the distribution of wtp is described using parametric and non parametric models results indicate that households in lahore are willing to pay about 7 50 to 9 per month for piped water supply that is clean and drinkable directly from the tap comparable to the monthly cost of in home water treatment and about three to four times the average monthly water bill for sample households using piped water estimates of wtp for reducing supply interruptions are both smaller and more difficult to interpret since a significant fraction of the estimated wtp distribution for supply improvements is negative all of our wtp estimates are well below 4 of monthly household income the world bank s benchmark upper bound for affordable water service

referendum models and economic values theoretical intuitive and practical bounds on willingness to pay innovations in the estimation of referendum type contingent valuation models have led to willingness to pay wtp measures inconsistent with consumer preferences and unbounded from above or below we propose a set of criteria which guarantee a bounded measure of wtp the criteria reject the traditional random utility model with unrestricted error terms in favor of the random wtp model with bounds on wtp once wtp is bounded by zero and income the form of the distribution is less consequential a new model for wtp is developed based on the beta distribution and is compared to previously estimated models

statistical approaches to the fat tail problem for dichotomous choice contingent valuation if a cumulative density function esti mated from dichotomous choice data has an unre alistically fat right hand tail mean willingness to pay wtp will be overestimated truncating the range of integration results in a lower bound esti mate of the true mean wtp a normalization pro cedure proposed by boyle welsh and bishop 1988 unnecessarily depresses the estimate further a new statistical approach is presented that allows a best guess estimate of mean wtp because this estimate involves extrapolation beyond the range of the data it tends to be highly variable jel q21

modelling zero values and protest responses in contingent valuation surveys in contingent valuation surveys the category of zero bidders refers to individuals that are not willing to pay anything for the programme under analysis specific questions can help to identify true zero values coming from people that are indifferent to the programme separately from protest responses the latter are generally excluded from the analysis this paper introduces a mixture sample selection model that takes into account both zero values and protest responses in the estimates the model is applied to the valuation of a traffic calming scheme aimed at reducing risks for residents in three villages in the north east of england

determinants of the price premium for green energy evidence from an oecd cross section using data from a survey of households in 11 oecd countries this paper investigates the determinants of preferences for a completely green residential electricity system three important questions are addressed i how much are households willing to pay to use only renewable energy ii does willingness to pay wtp vary significantly across household groups and countries and iii what drives the decision to enter the hypothetical market for green energy and given entry what drives the level of wtp the analysis here differs from previous studies on green energy in two ways first data and analyses are comparable across countries and second a comprehensive attempt is made to understand 0 wtp and to accommodate using a censored quantile regression cqr framework unobserved heterogeneity the survey data indicate a low wtp at 11 12 of current electric bill this study also addresses a key question how important is income for understanding wtp relative to more attitudinal determinants the effect of income overall appears ambiguous with tobit like models indicating that income is not significant while the cqr indicates that income exerts a significant effect near the center of the distribution of wtp across all frameworks used a key determinant of wtp appears to be environmental attitudes particularly membership in an environmental organization

addressing heterogeneous preferences using parametric extended spike models some public programs simultaneously provide a mix of non rejectable public goods and public bads consequently some individuals would pay for the program while others might instead need to becompensated in this paper we estimate twoparametric extended spike models that accountfor positive and negative preferences as wellas indifference for the public good weillustrate the models using data on valuationof prescribed burning of underbrush in forests which reduces the risk of catastrophicwildfires but also produces smoke emissions the public bad we compare the two empiricalapproaches to estimate willingness to pay wtp for the program and contrast these results withthose obtained from modeling specificationsthat only account for non negative preferences substantial differences in public net benefitswere found between the most flexible parametricextended spike model and the simple spike modelwhere negative responses were coded as zero anda standard binary logit of only positivebidders the results from the extended spikemodels demonstrated that accounting forindifference and negative values towards thepublic good resulted in substantially lowerwillingness to pay estimates

a semiparametric distribution for willingness to pay and statistical inference with dichotomous choice contingent valuation data this paper proposes a semiparametric willingness to pay distribution and discusses several aspects of statistical inference with dichotomous choice contingent valuation data we study likelihood based estimation of the model parameters with and without controlling for unobserved heterogeneity estimation of the mean and median willingness to pay and specification tests these statistical procedures are implemented using a data set in this application we find that a parametric model is rejected in favor of our semiparametric model that the heterogeneity can be adequately controlled using a simple density and that the semiparametric model offers more robust mean willingness to pay estimates

eliciting public preference for nuclear energy against the backdrop of global warming one of the most important issues related to sustainability is to reduce the use of fossil fuels due to the reduction in greenhouse gases ghg emission nuclear power results in low carbon emissions and is thus important to mitigating the adverse effects of global warming and climate change however the downside of nuclear power cannot be overlooked and consequently nuclear power is a controversial issue in many countries around the world thus an important question concerns how people should support nuclear power do the climate and energy security benefits of nuclear power outweigh its risks and costs therefore we use a modified double bounded contingent valuation model to explore the attitudes and the willingness to pay wtp of a country in order to demonstrate its implications for policy we confirm that supporters and opponents of nuclear power are balanced both in terms of their numbers and in terms of their wtp the policy implication is that people do not support any dramatic increase or reduction in nuclear power and that nuclear power should still be an important means of generating electricity in taiwan the current share of nuclear power in electricity generation of 20 should be maintained in the near future

repeated dichotomous choice formats for elicitation of willingness to pay simultaneous estimation and anchoring effect repeated dichotomous choice contingent valuation data are generated from responses to a succession of binary questions regarding alternative prices for an environmental good in this paper we propose a simultaneous equation model that allows for endogeneity and error correlation across the responses at each stage of the bidding process the model allows us to study the evolution of anchoring effects after the second dichotomous choice question estimation involves the bayesian techniques of gibbs sampling and data augmentation and the application focuses on the preservation value of a natural area the results for a data set involving up to four successive dichotomous choice questions show that restricted multiple bounded models are rejected by the data with the general model in addition willingness to pay tends to stabilize after the second stage in the elicitation process for the general unrestricted model when taking anchoring effects into consideration it is revealed that individuals responses in the latter stages are influenced by the sequence of bid prices offered in earlier questions nevertheless they do not have a significant effect on welfare estimates