willingness to pay for the green food in china abstract with use of payment card survey data of willingness to pay wtp for the green food a unique food certification in china this study finds that age and income are important for the wtp for the green food in china there are structural differences in consumer preference for green food between the large city and the small county consumers in china on average are willing to pay 47 more for green vegetables and 40 more for green meat than for their conventional counterparts compared with the real markets and the previous studies our results are very consistent and reliable

the value priority hypotheses for consumer budget plans based on the behavioral sciences and mathematical programming we hypothesize that consumers rank durables by a value or net value priority approximated by utility per dollar or utility minus price and plan to choose items in that order up to a budget cutoff this paper derives these hypotheses and develops a convergent linear programming procedure to estimate utility using primary field data on reservation prices purchase probabilities lottery orders and combination prizes we estimate utilities and compare the hypotheses to 215 actual budget plans lisrel v analysis provides further support for the hypotheses

are emotions to blame the impact of non analytical information processing on decision making and implications for fostering sustainability policy advice based on a rationalist perspective to foster sustainable behaviour has approached its limits and gaps in the established models are becoming more and more obvious to better understand how unsustainable choices are made and to foster sustainable decision making alternatives to the rationalist models of human decision making need to be investigated such alternative models have already demonstrated their usefulness in other fields than ecological economics the paper begins with a presentation of conventional models of human behaviour as well as their advances and limitations in ecological and behavioural economics in most of these models the dominance of analytical thinking still prevails i identify this as problematic given the evidence for the influence of emotion and intuition in decision making to offer a perspective on human behaviour that acknowledges this influence dual process models are presented established applications of these models are then used to propose four basic types of explanations for unsustainable behaviour based on these explanations preliminary ideas to promote sustainable decision making are developed these ideas are considerably different from policy implications of the established economic model

do ordering effects matter in willingness to pay studies of health care willingness to pay studies are increasingly being used in the evaluation of health care programmes however there are methodological issues that need to be resolved before the potential of willingness to pay can be fully exploited as a tool for the economic evaluation of health care programmes of particular methodological interest are the consequences of varying the order in which willingness to pay questions are presented to respondents in contingent valuation studies this paper examines the possibility of ordering effects in willingness to pay studies in health care that is when asking willingness to pay questions about three health care programmes within a single survey does the order the programmes are presented have an impact on the reported willingness to pay ordering effects are observed in the ranking of the programmes in the proportion of zero values reported and in the wtp for one of the programmes the results suggest that the best explanation for the ordering effects is one of fading glow whereby the first programme in any sequence captures much of the utility associated with giving

structural change in an open economy we study the importance of international trade in structural change our framework has both productivity and trade cost shocks and allows for non unitary income and substitution elasticities we calibrate our model to investigate south korea s structural change between 1971 and 2005 we nd that the shock processes propagated through the model s two main transmission mechanisms non homothetic preferences and the open economy explain virtually all of the evolution of agriculture and services labor shares and the rising part of the hump shape in manufacturing counterfactual exercises show that the role of the open economy is quantitatively important for explaining south korea s structural change

protest responses and willingness to pay attitude toward paying for stormwater pollution abatement abstract in contingent valuation cv surveys there is often a proportion of individuals who are not willing to pay to obtain avoid an increase decrease in some attribute of a particular environmental public good some of these respondents might protest an aspect of the cv survey e g payment vehicle or the behavioral intention i e willingness to pay wtp constituting the measure of economic value respondents attitudes toward the behavior of paying for a particular public good may contribute to the decision to pay independent of other explanatory variables such as the price of the intervention household income and methodological characteristics of the cv survey moreover attitude toward paying for the good may manifest in protest responses as a reaction to higher prices and methodological factors e g the payment vehicle to the extent that protest beliefs are dependent on such matters of survey design they may be alleviated through changes in cv methodology however to the extent that protest beliefs are a reaction to the act of paying methodological remedies may not be effective cv surveys of stormwater pollution abatement were conducted in four australian state capital cities the surveys differed with respect to the type of pollution abatement intervention the payment regime the vector of prices used in the dichotomous choice question and the institution responsible for implementing the stormwater pollution intervention protest beliefs were measured for all respondents irrespective of their responses to the wtp question results indicated that attitude toward paying underpinned protest beliefs regarding the role of government in stormwater management and individual rights to unpolluted waterways this attitude was present in each city sample despite methodological differences between the cv surveys attitude toward paying explained variability in wtp and was a larger predictor than was price household income was significantly associated with attitude toward paying and this relationship was also invariant over city samples protest beliefs were not independent of either the wtp question or demographic factors such as household income rather these beliefs were related to wtp through attitudes toward the act of paying for stormwater pollution abatement censoring protest responses in the present study would bias cv samples toward those individuals who are favorably disposed toward paying for environmental public goods and those from higher income households

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

differences between continuous and discrete contingent value estimates in a split sample contingent valuation study of willingness to pay wtp for food safety improvements the dichotomous choice dc elicitation method consistently generated much larger estimates of wtp than did a continuous method little or none of these differences was due to bias introduced by the statistical techniques used with the dc data most or all of the difference was due to differences in respondent behavior in addition the continuous wtp responses showed a significant scope effect while the dc responses did not the observed difference in behavior may be attributable in part to yea saying by dc respondents

monte carlo benchmarks for discrete response valuation methods this paper argues that the belief that discrete contingent valuation cv questions yield substantially larger estimates of the mean and the median willingness to pay wtp for nonmarket resources in comparison to open ended cv questions is unfounded monte carlo experiments estimate the factors influencing the performance of wtp estimates based on discrete response models most of the error arises from the specification errors common to the empirical models in the literature these experiments suggest models where wtp is dominated by nonuse or passive use values are likely to have smaller errors than where large use values influence these decisions

ownership patterns for durable goods and financial assets a rasch analysis there has been considerable discussion about the way in which consumers purchase durable and financial products and a number of modelling procedures have been used to examine this issue the present paper outlines a study that used a new and more general scaling approach the rasch model for this purpose using a larger than usual set of durable goods as well as a set of financial products it was found that both sets of products could be analysed using the rasch model and that there was an inherent order in the data further respondents in the sample followed the same order suggesting that examining subgroups as has been done in the past would be of little use a set of respondents backgroundcharacteristics was also collected that measured people s ability and willingness to purchase it was found that high levels of ownership were related to people s ability to purchase rather than to their willingness to purchase this suggests that the macro rather than the micro environment is likely to be t

which factors influence the expansion of bioenergy an empirical study of the investment behaviours of german farmers the german government is planning to increase the share of renewable energy sources in this context it is important to understand the decision making behaviour of farmers regarding investments in renewable energy systems that generate energy from biomass and farmers reactions to investment support measures to study this behaviour we conduct a survey and confront farmers with a hypothetical opportunity to invest in a biogas plant our findings reveal that farmers have heterogeneous investment thresholds their investment decisions are mainly driven by capital costs and the subjective perception of the risk resulting from the investment other decision parameters like sustainability and non monetary objectives that are also examined in this paper play only minor roles however bounded rationality is an important factor moreover the influence of an investment subsidy was analysed only about half of the amount of the subsidy as expected according to normative forecast models is reflected in an increased willingness to invest furthermore farmers who have previously invested in bioenergy plants show lower investment thresholds and have stronger reactions to the subsidy regarding the expansion of renewable energies these findings are meaningful for policy impact analysis

externally validating contingent valuation an open space survey and referendum in corvallis oregon abstract we ask whether respondents report the same decisions in non binding surveys as they do in real elections we study a corvallis or referendum to raise open space funds and find survey and election compatibility pivots on the characterization of undecided responses the survey and referendum percentage of yes votes match closely only if undecided responses are treated as no we compare survey based mean willingness to pay wtp estimates with election based estimates household wtp averages us 48 89 using election results while survey based wtp averages us 75 43 excluding undecided responses us 49 67 treating undecided responses as no and between us 49 96 and 80 05

a test of the equality of closed ended and open ended contingent valuations a test is developed to find whether open ended and closed ended contingent valuation mechanisms lead to significantly different results the test is based on joint estimation of willingness to pay responses to open and closed ended questions asked of the same sample of individuals in a public good example individuals do respond differently depending on question format possible explanations include different incentives for strategic behavior and respondents lack of familiarity with the open ended question type no differences in willingness to pay were found in a private good example

sensitivity of willingness to pay estimates to bid design in dichotomous choice contingent valuation models this paper addresses the sensitivity of dichotomous choice contingent valuation method dc cvm based mean willingness to pay wtp estimates to the dc cvm sample design and to alternative measures of wtp this issue is examined both analytically and empirically the analysis of ten different dc cvm data sets revealed a sensitivity in estimated mean wtp to the sample design and to the measure chosen to calculate mean wtp

willingness to pay attitudes and fundamental values on the cognitive context of public preferences for diversity in agricultural landscapes abstract our study set out to investigate if and how willingness to pay both hypothetical and actual might reflect individuals wider cognitive networks we draw on the idea of cognitive hierarchies i e the notion that concrete preferences and attitudes are embedded in networks of more abstract beliefs and values and explore if willingness to pay wtp as expressed through contingent valuation can be understood as part of such hierarchies to this end we elicited stated and actual wtp in a survey of public preferences and attitudes towards the establishment of an agri environmental payment scheme in northeim germany that rewards farmers for the provision of riparian buffer strips two main findings emerged from the study first only a very small proportion of those stating positive wtp did actually transfer the money second contrary to our hypotheses results from a structural equation model suggest that stated wtp was only poorly connected to attitudes towards the payment scheme and other potentially relevant more abstract beliefs and values this casts doubts on the meaningfulness of such statements of the ten different fundamental value types included only universalism and conformity played a significant role in the cognitive hierarchy and informed generalised environmental beliefs as well as attitudes towards the payment scheme as attitudes seemed to be better integrated in the cognitive network than wtp we discuss if surveys of public preferences should rely on attitude statements rather than solely on monetary values

comparing ranking and contingent valuation for valuing human lives applying nested and non nested logit models the aim of this paper is to investigate whetherrespondents perceive a discrete choice contingentvaluation dc cvm question differently from a rankingquestion we combine the two approaches to valuepublic projects that try to prevent people from dyingprematurely the combined valuation procedure enablesus to investigate the internal consistency of theutility structure between choices applying nested andnon nested logit models if the preference structureis allowed to shift the relative utility weights ofthe attributes differ between the valuation questions and the willingness to pay wtp estimate from thecombined procedure changes

a satisfactory benefit cost indicator from contingent valuation abstract standard economic concepts are used to develop a model of individual behavior when subject to the constraints of the contingent valuation choice context the model yields refutable consequences that are consistent with previously reported empirical findings including some that have been thought to be anomalous the model is used to show that different contingent valuation formats have predictably different performance characteristics notably the hicksian compensating measures are satisfactory benefit cost indicators when elicited using any one of several formats identified in the text of the formats examined one form of a policy referendum appears to have the most satisfactory characteristics overall we conclude that contingent valuation is a progressing research program

a bayesian approach to double bounded contingent valuation in this paper we propose a bayesian approach to model double bounded contingent valuation data the double bounded elicitation method is interpreted as a two tier iterated process in which the subject is allowed to have a second thought about his her valuation for the environmental good prior information is modelled from the answers to the first dichotomous choice question the model is quasi bayesian q b in that the prior distribution refers to mean willingness to pay while the likelihood function refers to the proportions of a multinomial distribution this model is applied to empirical data from a contingent valuation survey involving the valuation expressed by european tourists for access to natural areas in the canary islands results show that point estimate of consumer surplus computed with the q b model does not differ substantially from single bounded model estimation in addition double bounded seems to be quite robust to the choice of the prior model of willingness to pay responses comparison with open ended suggests that the q b model might be useful to control for strategic response and starting point biases

wealth inequality and intergenerational links previous work has had difficulty generating household saving behaviour that makes the distribution of wealth much more concentrated than that of labour earnings and that makes the richest households hold onto large amounts of wealth even during very old age i construct a quantitative general equilibrium overlapping generations model in which parents and children are linked by accidental and voluntary bequests and by earnings ability i show that voluntary bequests can explain the emergence of large estates while accidental bequests alone cannot and that adding earnings persistence within families increases wealth concentration even more i also show that the introduction of a bequest motive generates lifetime savings profiles more consistent with the data

yea saying in contingent valuation surveys a number of recent papers have provided estimates of willingness to pay derived in contingent valuation surveys exceeding those revealed in experimental or real life markets one possible explanation for the overestimation of values is the presence of yea saying with the objective of reducing the occurrence of yea saying a new elicitation format referred to as the dissonance minimizing d m format is proposed an empirical comparison of the dm format with the conventional dichotomous choice dc format and the ambivalence reducing polychotomous choice pc format suggested by ready whitehead and blomquist 1995 is made results are encouraging for the dm

on the distributional effects of reducing capital taxes this article asks whether household heterogeneity and market incompleteness have quantitatively important implications for the welfare effects of tax changes we compare a representative agent economy to an economy in which households face idiosyncratic uninsurable income risk the income process is consistent with empirical estimates and implies a realistic wealth distribution we find that capital tax cuts imply large welfare gains in the representative agent economy however when households are heterogeneous substantial redistribution during transition means that only a minority will support capital tax cuts whereas most households can expect large welfare losses

resolving conflicting ecological and economic interests in the korean dmz a valuation based approach abstract the demilitarized zone dmz between south and north korea has served as a sanctuary to diverse biological resources since the korean war ceased in 1953 during winter season flocks of cranes grus spp converge in the rice field along the dmz all other refuges for cranes that winter in south korea were destroyed due mainly to wilful industrial expansion in the past few decades the presence of cranes in this region is attributed to the residual rice grains left behind by harvesters this winter habitat is however very fragile for a number of reasons first the local formers regard the cranes as a potential threat in their livelihood rather than as an ecological member sharing the same ecosystem resources second exercising property rights the landholders have actively advocated an industrial development program third it is difficult to legally impose the notion of wildlife preservation even if there is a perception among the general public that the crane is worth preserving this study sought to formulate a policy measure to guide the local egalitarian farm economy to ecological economy in which farmers and cranes are the harmonized co users of the ecosystem resources valuation based approach is employed in our study to show that bio diversity is not in conflict with local economic well being but in fact essential to it

the noaa panel report a new beginning or the end of an era an account of the prospective contribution of some proposed project or policy to the satisfaction of human preferences the central focus on preference satisfaction led bc analysts to be concerned with economic surpluses and the values of nonmarketed goods and amenities matters that took the inquiry well beyond the prices and quantity changes that first attracted the analysts attention cv was specifically designed for enlisting survey research methods with their broad scope of potential applications to obtain benefit estimates consistent with a rigorous welfare change measurement framework samuelson s model for valuing public goods in which individual valuations were rigorously defined and aggregated to obtain the social value was applied directly in early cv applications i e through the 1970s the objective was to define a baseline or default situation and a proposed project and to ask respondents to report a valuation that would leave them indifferent between implementing the proposal or defaulting to the baseline situation for proposed projects that would improve things but at a cost respondents were asked to announce their maximum willingness to pay wtp alternatively to make sure that the full consumer s surplus was identified iterative bidding was used to drive the respondent all the way to the point of indifference the market analogy with only minimal concessions to the public goods context dominated the language of cv survey format and of communication among cv researchers these early excursions into cv encountered skepticism from economists who have traditionally argued despite the isolation paradox that undermines markets in public goods that real transactions are much more reliable indicators of value than self reported behavioral intentions many social scientists were skeptical or even hostile to cv for reasons quite different from those that worried economists they recognized that there are many different philosophical systems of valuing and many different institutions beyond the market for providing public amenities to these social scientists it seemed perverse to force the richness and diversity of human ways of valuing and providing public amenities into the rigid molds of bca and cv 1

a pilot test of a new stated preference valuation method continuous attribute based stated choice abstract a new stated preference nonmarket valuation technique is developed in an interactive computerized survey respondents move continuous sliders to vary levels of environmental attributes the total cost of the combination of attributes is calculated according to a preprogrammed cost function continuously updated and displayed as respondents move the sliders each registered choice reveals the respondent s marginal willingness to pay for each of the attributes the method is tested in a museum exhibit on global climate change two construct validity tests were conducted responses are sensitive to the shape of the cost function in ways that are consistent with expectations based on economic theory implied marginal willingness to pay values were similar to those estimated using a more traditional paired comparisons stated choice format however responses showed range effects that indicate potential cognitive biases

validation of empirical measures of welfare change a comparison of nonmarket techniques since the passing of the flood control act of 1936 the attention of many resource economists has been directed towards measuring the benefits and costs of alternative uses of natural resources increasingly it has been recognized that the value of some of these uses is not explicitly determined through market transactions this has led to the focus of much attention upon the development of nonmarket methods to estimate the value of these uses in the 1940s the groundwork for the travel cost method was established by hotelling prewitt 1949 following this in the 1960s davis initiated the basic foundation for bidding methods davis 1963 which were later to be subsumed under the heading of contingent valuation methods brookshire randall and stoll 1980 schulze d arge and brookshire 1981 thayer 1981 both of these methods will be further discussed below in addition to these two methods a third approach the unit day value method has been recognized as acceptable but not preferred for the valuation of recreational uses of water and related land resources dwyer kelley and bowes 1977 u s water resources council 1979 given the existence of alternative methods of estimating the value of resource uses several obvious questions arise one of the first of these is under what circumstances is each method most appropriate existing literature has focussed sufficiently on this question and pointed out limitations of each especially the travel cost method and unit day value methods brookshire ives and schulze 1976 dwyer kelly and bowes 1977 freeman 1979 mcconnell 1975 randall ives and eastman 1977 schulze d arge and brook

modelling priority patterns in asset acquisition the case of smallholder farmers in three rural districts in uganda poor smallholder farmers in uganda live at or below subsistence level they are vulnerable to multiple risks and insecurities and have limited access to capital markets in this article we propose a model to estimate household priority patterns in asset acquisition using cross section data the model is applied to a field survey consisting of 938 farm households from three districts the model predicts the distribution of asset ownership conditional on the type of assets owned based on the established priority patterns the article proposes a low cost regional poverty monitoring instrument using only asset type data

accounting for the u s earnings and wealth inequality we show that a theory of earnings and wealth inequality based on the optimal choices of ex ante identical households that face uninsured idiosyncratic shocks to their endowments of efficiency labor units accounts for the u s earnings and wealth inequality almost exactly

the net benefit of saving the asian elephant a policy and contingent valuation study reports results from a contingent valuation cv survey of willingness to pay wtp for the conservation of the asian elephant of a sample of urban residents living in three selected housing schemes in colombo the capital of sri lanka face to face surveys were conducted using an interview schedule is a non linear logit regression model is used to analyse the respondents responses for the payment principle questions and to identify the factors that influence their responses we investigate whether urban residents wtp for the conservation of elephants is sufficient to compensate farmers for the damage caused by elephants we find that the beneficiaries the urban residents could compensate losers the fanners in the areas affected by human elephant conflict hec and be better off than in the absence of elephants in sri lanka therefore there is a strong economic case for the conservation of the wild elephant population in sri lanka however we have insufficient data to determine the optimal level of this elephant population in the kaldor hicks sense nevertheless the current population of elephant in sri lanka is kaldor hicks preferable to having none c 2003 elsevier b v all rights reserved

a matter of taste estimating import price inflation across u s income groups abstract we estimate import price inflation for different income deciles of u s consumers over the years 1998 through 2014 after structurally estimating the parameters of a model capturing non homotheticity across sectors we use price data from the universe of foreign establishments exporting goods to the u s as well as consumer expenditure information to construct import price indexes we find that lower income households experienced the most import price inflation while higher income households experienced the least over our time period

solving the incomplete markets model with aggregate uncertainty using the krusell smith algorithm and non stochastic simulations abstract this article describes the approach to computing the version of the stochastic growth model with idiosyncratic and aggregate risk that relies on collapsing the aggregate state space down to a small number of moments used to forecast future prices one innovation relative to most of the literature is the use of a non stochastic simulation routine

deconstructing life cycle expenditure we revisit two well known facts regarding life cycle expenditures the hump shaped profile of nondurable expenditures and the increase in cross household consumption inequality we document that the behavior of total nondurables masks surprising heterogeneity in the life cycle profile of individual consumption subcomponents we provide evidence that the categories driving life cycle consumption either are inputs into market work or are amenable to home production using a quantitative model we document that the disaggregated life cycle consumption profiles imply a level of uninsurable permanent income risk that is substantially lower than that implied by a model using a composite consumption good

on the heterogeneous welfare gains and losses from trade how are the gains and losses from trade distributed across individuals within a country first we document that tradable goods constitute a larger fraction of expenditures for poor households second we build a trade model with nonhomothetic preferences to generate the documented relationship between tradable expenditure shares income and wealth and uninsurable earnings risk to generate heterogeneity in income and wealth third we use the calibrated model to quantify the differential welfare gains and losses from trade along the income and wealth distribution in a numerical exercise we permanently reduce trade costs so as to generate a rise in import share of gdp commensurate with that seen in the data from 2001 to 2014 we find that households in the lowest wealth decile experience welfare gains over the transition measured by permanent consumption equivalents that are 67 percent larger than those in the highest wealth decile

trade liberalization and regional dynamics abstract we study the evolution of trade liberalization s effects on brazilian local labor markets regions facing larger tariff cuts experienced prolonged declines in formal sector employment and

a convergent validity test within the payment card format using simulation techniques a convergent validity test is performed between two groups of versions of the payment card format the first group the classic payment card cpc asks respondents to report their willingness to p

does question format matter valuing an endangered species a three way treatment design is used to compare contingent valuation response formats respondents are asked to value an endangered species the red cockaded woodpecker and the restor ation of its habitat following a natural disaster for three question formats open ended payment card and double bounded dichotomous choice differences in survey response rates item non response rates and protest bids are examined bootstrap techniques are used to compare means across formats and to explore differences in willingness to pay wtp distribution functions convergent validity is found in a comparison of mean wtp values although some differences are apparent in the cumulat ive distribution functions differences across formats are also identified in item non response rates and proportion of protest bids overall the payment card format exhibits desirable properties relative to the other two formats

fat tails and truncated bids in contingent valuation an application to an endangered shorebird species a yes response function in a contingent valuation study is said to have fat tails if it has a high and slowly declining yes response rate at high bid levels truncated bids refer to the practice of dropping high bid offers before a yes response rate of near zero is reached this is a common practice in contingent valuation we explore the extent and implications of fat tails and truncated bids in a study of an endangered shorebird species we find among other things that mean willingness to pay is quite sensitive to the highest bid offered so much so that the choice of highest bid nearly dictates outcomes

an experimental testing of anchoring effects in discrete choice questions this paper re examines the openended dichotomous choice question in the lab it hasearlier been suggested that the dichotomous choiceformat suffers from anchoring and yea saying comparing actual economic commitments for a privategood with a significant market value we cannot rejectthe null hypothesis of equal wtp for the two formats we conclude that problems with dc might be due toissues of how the survey is framed not the dcquestion itself

welfare measurements using contingent valuation a comparison of techniques three commonly used techniques of asking contingent valuation questions are compared iterative bidding payment cards and dichotomous choice the results reveal that no single contingent valuation technique is neutral in the elicitation of hicksian surplus and each technique has its strengths and weaknesses the iterative bidding estimates contain a starting point bias while the payment card and dichotomous choice estimates were influenced by the interviewers soliciting the contingent values finally the analysis of dichotomous choice responses involves unresolved issues that warrant further investigation on the other hand dichotomous choice is the easiest technique to administer in a survey setting

valuing health care using willingness to pay a comparison of the payment card and dichotomous choice methods this paper compares willingness to pay wtp estimates generated from the dichotomous choice dc and payment card pc approaches in a split sample wtp experiment concerned with allocating scarce health care resources across three health care interventions the dc approach is shown consistently to generate larger welfare estimates than the pc observed difference between pc and dc experiments cannot be explained by the inclusion of non demanders or methods of statistical analysis but may be partly explained by yea saying no evidence of range bias or mid point bias was found with pc responses data were also collected on respondents ordinal rankings of the three interventions and person trade offs ptos neither of these approaches converged with wtp future work must address the decision heuristics individuals employ when responding to valuation experiments

structural change and the kaldor facts in a growth model with relative price effects and non gorman preferences u s data reveal three facts 1 the share of goods in total expenditure declines at a constant rate over time 2 the price of goods relative to services declines at a constant rate over time and 3 poor households spend a larger fraction of their budget on goods than do rich households i provide a macroeconomic model with non gorman preferences that rationalizes these facts along with the aggregate kaldor facts the model is parsimonious and admits an analytical solution its functional form allows a decomposition of u s structural change into an income and substitution effect estimates from micro data show each of these effects to be of roughly equal importance

cost pass through in the u s automobile market we study cost pass through in the u s automobile market using a framework that incorporates the effects of cost changes on input decisions we find that accounting for firms factor market decisions significantly increases measured cost pass through although we reject the hypothesis of full cost pass through and constant markups in addition our evidence suggests that cost shocks common to all manufacturers have a greater effect on prices than do model specific cost shocks finally we examine how pass through varies with manufacturer nationality finding that u s firm cost pass through exceeds that of european and asian firms

a box cox double hurdle model of wildlife valuation the citizen s perspective abstract a stated preference approach is used to elicit the attitudes of the general public towards coyote conservation the payment vehicle is presented in a way that explicitly prompts respondents to adopt a citizen perspective rather than a consumer perspective when responding to the survey to deal with the large numbers of zero responses a box cox double hurdle specification is used to model separately individuals choices about whether to support conservation or not and their choice about the level of support the results show that simpler analyses that do not account explicitly for these two different decisions would lead to misleading conclusions in the study of nuisance wildlife the study uses primary data from prince edward island canada

on the gap between payment card and closed ended cvm answers the paper presents contingent valuation cv estimates of benefits provided by a proposed kalkalpen national park in austria although descriptive results of welfare measures are presented the focus of the paper is on methodological questions concerning the analysis of cv answers evidence is given regarding the difference between payment card pc answers and closed ended question formats based on different estimation models for cv questions substantial differences are found between closed ended and payment card welfare measures on average pc willingness to pay wtp measures are below the closed ended figures since the evaluation models are based on different premises in the calculation of wtp figures a more precise disclosure of the underlying evaluation methods is required if different question formats are compared to one another identical assumptions on the probability distributions have to be assumed whenever open and closed ended cv welfare measures are compared taking theoretical argument

using choice experiments to value the environment this paper we outline the choice experiment approach to environmental valuation this approach has its roots in lancaster s characteristics theory of value in random utility theory and in experimental design we show how marginal values for the attributes of environmental assets such as forests and rivers can be estimated from pair wise choices as well as the value of the environmental asset as a whole these choice pairs are designed so as to allow efficient statistical estimation of the underlying utility function and to minimise required sample size choice experiments have important advantages over other environmental valuation methods such as contingent valuation and travel cost type models although many design issues remain unresolved applications to environmental issues have so far been relatively limited we illustrate the use of choice experiments with reference to a recent uk study on public preferences for alternative forest landscapes this study allows us to perform a convergent validity test on the choice experiment estimates of willingness to pay

starting point bias in dichotomous choice valuation with follow up questioning abstract follow up questions are frequently used to improve the efficiency of dichotomous choice contingent valuation questionnaires however a number of authors e g 12 16 have noted a significant difference between the wtp distributions implied by initial and follow up question responses this paper investigates starting point bias as one explanation for the phenomenon we develop a model of starting point bias in the context of dichotomous choice questioning with follow up using a monte carlo simulation to illustrate the potential bias imparted to wtp estimates an application is provided based on data from a cv study in northcentral iowa

exploring preference anomalies in double bounded contingent valuation double bounded dichotomous choice dbdc contingent valuation offers increased efficiency of willingness to pay wtp estimates compared with the single bounded format however evidence suggests dbdc generates anomalous respondent behaviour this paper provides the first investigation and explanation of these anomalies in health results suggest the incentives for truthful preference revelation are altered in the presence of a follow up question this result is found using both regression techniques and analysis of raw responses although findings suggest very certain respondents exhibit less anomalous behaviour inconsistencies remain across bounds the results of this study question the use of iterative valuation formats

designing transactions without framing effects in iterative question formats abstract several studies document that iterative question formats used in contingent valuation studies produce anomalies in respondent behavior that appear to threaten the validity of welfare estimates by decomposing iterative question formats into their ascending and descending sequences we show that these anomalies occur only in ascending sequences we describe the conditions under which comparable patterns of behavior are likely to be found in other iterative question formats that begin with a discrete willingness to pay question we then develop a unified explanation of these anomalies using our model of framing based on prospect theory we provide the first head to head test of rival explanations of these behavioral patterns by developing refutable hypotheses for the strategic behavior yea saying anchoring and cost expectations models finally based on our own statistically robust model we show how these anomalies can be eliminated without loss of the statistical efficiency of most iterative question formats

decision structuring to alleviate embedding in environmental valuation abstract embedding is the widely observed phenomenon that a good is assigned a higher value if evaluated on its own rather than as part of a more inclusive set embedding is considered a serious problem affecting the quality of many environmental management and health risk policy judgments this paper presents the results of an experiment involving of a structured small group approach for conducting environmental policy evaluations it focuses on eliciting problem specific values and discussion among participants about the pros and cons of multiple project alternatives in the context of tradeoffs between fisheries production and electricity generation from dams study results show a significant reduction in embedding which is viewed as an improvement in the quality of the preference judgments compared with a standard contingent valuation cv approach

income and wealth heterogeneity in the macroeconomy how do movements in the distribution of income and wealth affect the macroeconomy we analyze this question using a calibrated version of the stochastic growth model with partially uninsurable idiosyncratic risk and movements in aggregate productivity our main finding is that in the stationary stochastic equilibrium the behavior of the macroeconomic aggregates can be almost perfectly described using only the mean of the wealth distribution this result is robust to substantial changes in both parameter values and model specification our benchmark model whose only difference from the representative agent framework is the existence of uninsurable idiosyncratic risk displays far less cross sectional dispersion and skewness in wealth than u s data however an extension that relies on a small amount of heterogeneity in thrift does succeed in replicating the key features of the wealth data furthermore this extension features aggregate time series that depart significantly from permanent income behavior

the distribution of wealth and fiscal policy in economies with finitely lived agents we study the dynamics of the distribution of wealth in an overlapping generation economy with finitely lived agents and intergenerational transmission of wealth financial markets are incomplete exposing agents to both labor and capital income risk we show that the stationary wealth distribution is a pareto distribution in the right tail and that it is capital income risk rather than labor income that drives the properties of the right tail of the wealth distribution we also study analytically the dependence of the distribution of wealth of wealth inequality in particular on various fiscal policy instruments like capital income taxes and estate taxes and on different degrees of social mobility we show that capital income and estate taxes can significantly reduce wealth inequality as do institutions favoring social mobility finally we calibrate the economy to match the lorenz curve of the wealth distribution of the u s economy

consumer acquisition patterns for durable goods australian evidence t he idea that households purchase consumer durables according to a specific acquisition pattern has been investigated by a number of researchers in the last two decades kasulis lusch and stafford 1979 lusch stafford and kasulis 1978 mcfall 1969 paroush 1965 pyatt 1964 hebden and pickering 1974 the most recent of these studies examined consumer acquisition patterns in oklahoma city for 12 heterogeneous products the authors concluded that the population has an underlying common order of acquisition for a large set of heterogeneous durables although meaningful population breakdowns reveal different patterns of acquisition but pointed out that these conclusions rest on the study being replicated and that future examinations should include studies across different sets of durable goods within different geographic samples and between other segmentation variables such as social class family life cycle and income groups kasulis lusch and stafford 1979 p 56 such studies are important as leone and schultz 1980 have pointed out for the ability to generalize research is necessarily based on the finding of supportive evidence in replicative work in line with this suggested research direction the present paper reports the findings of a study which in contrast to the oklahoma study involved both a different set of durable goods and a different geographic sample the study was undertaken in perth western australia and had three basic purposes first to determine whether a common acquisition order could be found for a large set of heterogeneous durables only some of which were included in the 1979 oklahoma study second to determine if the meaningful breakdowns between homeowners and home renters in oklahoma also existed in perth for this different set of durables and finally to determine whether there were differences between the american and australian acquisition patterns for those durables common to both studies such findings may point to some differences between the two countries and uncover potential marketing opportunities for some durables to test a general hypothesis in a different situation or with different data using the same methodology has been variously referred to throughout the literature as a nonexperimental leone and schultz 1980 or an operational lykken 1968 replication this form of replication is generally accepted as a rigorous approach to finding support for a stated hypothesis in fact leone and schultz 1980 make the point that it is the case of different situations which leads implicitly to broader generalizations p 12

welfare evaluations in contingent valuation experiments with discrete response data comment in the case of private goods individuals reveal their preferences in the market place no similar market mechanism exists in the case of public goods however one obvious possibility is to ask people about their maximal willingness to pay for public goods or government expenditure johansson 1987 1990 miller in some recent contingent market valuation studies people instead have been asked to accept or reject a specified amount of money for a change in the provision of a public good different subsamples are confronted with different bids the resulting yes and no responses usually are analyzed by logit or probit techniques e g johansson and kristrom this raises the question of how to compute the average willingness to pay when only yes and no responses are available this point was advanced by hanemann in his seminal 1984 paper on welfare evaluations with discrete responses see also hanemann 1987 however we believe a minor imperfection in hanemann s presentation may confuse and mislead practitioners hanemann s approach assumes that negative bids cannot occur but at the same time gives the impression that it also applies to models that allow for negative bids we also extend hanemann s discussion of the choice of money measure in cost benefit analysis

the effects of changing input costs on food prices the relationships between changes in food sector input costs and retail food prices are examined results indicate that increases in factor prices pass quickly to consumers within two quarters for most foods in addition rising farm level prices and substantial increases in nonfarm resource prices appear to explain why food prices rose more rapidly than nonfood prices in the 1970s the analysis is based on a twenty equation econometric model of the food price determination process specified following popkin s stage of processing approach causality and validation test statistics for the model are presented

protest beliefs in contingent valuation explaining their motivation abstract the definition and treatment of protest responses in contingent valuation cv can have a significant influence on the estimated values of the good in question if these responses are censored in order to understand how protest responses are motivated in a cv about forest biodiversity in germany we used an item battery to identify respondents protest beliefs the items were measured for all respondents irrespective of their willingness to pay wtp in principle then a scale based on these beliefs is taken as a dependent variable of regression analyses in addition to environmental concern we used norms the warm glow of giving and dilemma concern as further explanatory variables the latter focuses on cooperation problems in protecting the environment our results show that protest beliefs are significantly influenced by the explanatory factors furthermore the protest beliefs themselves have a significant effect on the decision to be wtp as well as on the amount of money stated by those who are wtp the censoring of protest responses may therefore be indefensible

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

bounded rationality in contingent valuation empirical evidence using cognitive psychology abstract survey based valuation techniques like the contingent valuation method cvm rely particularly on the premise of respondents rationality when answering willingness to pay wtp questions results of cvm surveys have repeatedly put this fundamental assumption into question this study adopts a more realistic view of rationality accounting for respondents limited capacities to process information based on cognitive psychology a technique to detect and analyze the bounds of rationality inherent in wtp statements is developed using an empirical example the influence of bounded rationality on the validity of cvm results is analyzed it is shown that individual differences in information processing play a major role for the validity of cvm responses the results allow new insights into response behavior in dichotomous choice versus payment card elicitation formats from the results of this study recommendations for future survey designs taking into account respondents different information processing modes are developed

ordering effects in nested top down and bottom up contingent valuation designs abstract within a contingent valuation cv survey ordering effects are defined where responses to a given question vary in a theoretically unanticipated manner according to the positioning of that question relative to others in the survey instrument this paper employs a split sample cv design to investigate the potential for such ordering effects upon stated willingness to pay for nested goods in one top down design values are first elicited for protecting the whole of an endangered area after which values for a part sub area are elicited a second bottom up treatment reverses the order of valuation tasks with the part scheme valued prior to the whole results show that whole and part valuation responses are logically ordered and determined by a consistent set of factors irrespective of question order however variance to question order was observed in both the part and whole valuations the correspondence of these results to standard and non standard preference theories is explored and the difficulties and practical issues concerning valuing nested goods are highlighted

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

can traditional theories of structural change fit the data two traditional explanations for structural changes are sector biased technological progress and non homothetic preferences this paper integrates both into an otherwise standard growth model and quantitatively evaluates them vis a vis time series the exercise identifies a set of puzzles for standard theories i the model cannot account for the steep decline in manufacturing and rise in services in the later data ii the standard model requires implausibly low elasticity of substitution across goods to match the consumption and output data and iii the behavior of consumption and output shares differs significantly from that of employment shares we argue that models that incorporate home production sector specific factor distortions and differences across sectors in the accumulation of human capital are promising avenues to amend the standard models jel o11 o14 o41

sequencing and the adding up property in contingent valuation of endangered species are contingent non use values economic values this paper presents tests of the theoretical validity of the contingent valuation cv method the validity of cv is especially a concern when involving environmental goods with a predominant non use value one test of theoretical validity is the adding up property that implies that a specific good should be equally valued irrespectively of it is being valued directly or built up sequentially in this cv study four independent sub samples stated willingness to pay for the same composite good or package using different sequences one sub sample valued the composite good directly while two sub samples faced built up sequences valuing first subsets of this composite good a fourth sub sample valued the composite good from a dividing out approach facing first the valuation of a larger multi package theoretically expected sequencing effects were observed the subset goods obtained higher values earlier in a sequence and the dividing out approach decreased the stated value for the composite good most importantly these cv data did pass the tests of the adding up property

experimental valuation of food safety abstract nearly 60 of the sewage sludge in france is recycled in agriculture sludge serves as a fertilizer but contains micropollutants this could modify the consumer s perceived safety concerning the vegetables grown with sludge in the same way as nutritional value safety is an attribute of food food safety is a public good and in this respect has no explicit price a consumer is willing to pay for it if he perceives a risk to his health the purpose of this study is to give a value to food safety relative to the practice of sewage sludge disposal on agricultural soils experimental economics is a support to elicit the willingness to pay for safety risks linked to one heavy metal cadmium have been chosen they are supposed to be very low and difficult to assess because of the uncertainties involved in the food chain process

some issues in the application of closed ended willingness to pay studies to valuing health goods an application to antenatal care in scotland limited resources coupled with unlimited demands means that decisions have to be made concerning the allocation of scarce health care resources the economic instrument of willingness to pay wtp is one instrument that can be used to help this decision making process recommendations from the environmental economics literature suggest that the closed end ce wtp approach should be used this approach is just beginning to be used to value health goods this paper addresses the sensitivity of the closed ended wtp approach to three issues the design of the bid vector the upper and lower limits of integration and the method of analysis these are discussed with reference to a study looking at the value of alternative models of ante natal care in scotland the results are discussed and conclusions made concerning the use of the ce wtp instrument for valuing health goods

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

willingness to pay for environmental improvements in a large city evidence from the spike model and from a non parametric approach in this paper the contingent valuation method cvm is applied in order toestimate the social benefits of a set of environmental and urbanimprovements planned for the waterfront of the city of valencia spain asa consequence of the expansion and restructuring of its trading port asthe data show a high rate of zero responses we applied the spike model one of the most recent models in cvm literature since traditional models logit and probit are not suitable given the characteristics of our data the non parametric approach is also applied in order to test the validity ofthe spike model the results show certain similarities between the spikemodel and the non parametric approach

cost of business cycles with indivisibilities and liquidity constraints it is almost universally agreed that individuals face incomplete insurance markets and cannot perfectly insure against the idiosyncratic risk in this paper simple general equilibrium models with incomplete insurance markets are examined in order to assess the impact of imperfect insurance on the magnitude of the welfare costs of business cycles two versions of incomplete insurance markets are considered and certain statistical properties of the equilibrium stochastic processes in these environments are compared with those of a perfect insurance economy

the risk free rate in heterogeneous agent incomplete insurance economies abstract why has the average real risk free interest rate been less than one percent the question is motivated by the failure of a class of calibrated representative agent economies to explain the average return to equity and risk free debt i construct an economy where agents experience uninsurable idiosyncratic endowment shocks and smooth consumption by holding a risk free asset i calibrate the economy and characterize equilibria computationally with a borrowing constraint of one year s income the resulting risk free rate is more than one percent below the rate in the comparable representative agent economy

analysing decision behaviour in stated preference surveys a consumer psychological approach this paper applies a typology adapted from the consumer psychology literature to a contingent valuation method cvm survey we argue that the typology is helpful as a way of identifying responses that contain useful information on preferences for the environmental good in question relative to those which are unlikely to contain such information applying this framework to a cvm study of agri environmental payments in germany we find that some 90 of responses are preference revealing this distribution changes when the framing of the good is changed the typology may be of most use during the design stage of future cvm studies since it enables researchers to increase the fraction of responses that are useful

valuing public goods discrete versus continuous contingent valuation responses independent applications of open ended and dichotomous choice formats are compared using tests of means estimating joint likelihood functions and nonparametric tests of distributions the null hypothesis of no difference in the open ended and dichotomous choice estimates of central tendency cannot be rejected for two out of three data sets while estimated standard deviations are significantly different for all three data sets in addition actual dichotomous choice means and standard deviations exceed those from comparable synthetic dichotomous choice data sets suggesting either open ended questions underestimate values or dichotomous choice bid structures may lead to systematic overestimates

coherent arbitrariness stable demand curves without stable preferences economic theories of valuation generally assume that prices of commodities and assets are derived from underlying fundamental values for example in finance theory asset prices are believed to reflect the market estimate of the discounted present value of the asset s payoff stream in labor theory the supply of labor is established by the tradeoff between the desire for consumption and the displeasure of work finally and most importantly for this chapter consumer microeconomics assumes that the demand curves for consumer products chocolates cds movies vacations drugs and so forth can be ultimately traced to the valuation of pleasures that consumers anticipate receiving from these products because it is difficult as a rule to measure fundamental values directly empirical tests of economic theory typically examine whether the effects of changes in circumstances on valuations are consistent with theoretical prediction for example whether labor supply responds appropriately to a change in the wage rate whether compensated demand curves for commodities are downward sloping or whether stock prices respond in the predicted way to share repurchases however such comparative static relationships are a necessary but not sufficient condition for fundamental valuation e g summers 1986 becker 1962 was perhaps the first to make this point explicitly when he observed that consumers choosing commodity bundles randomly from their budget set would nevertheless produce downward sloping demand curves

a ricardian model with a continuum of goods under nonhomothetic preferences demand complementarities income distribution and north south trade this paper develops a ricardian model of trade in which goods are indexed according to priority and higher indexed goods are consumed only by richer households south north has a comparative advantage in lower higher indexed goods and hence specializes in goods with lower higher income elasticities of demand product cycles and a southern terms of trade deterioration result from faster population growth and uniform productivity growth in south and a global productivity improvement south s domestic income redistribution policy can improve its terms of trade so much that every household in south may be better off at the expense of north

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

bias in discrete response contingent valuation abstract the empirical literature on discrete response contingent valuation has found that seemingly innocuous changes in the statistical models estimated result in significantly different point estimates of willingness to pay this paper hypothesizes and tests several potential explanations for these results first it investigates and compares the biases inherent in single bounded and double bounded maximum likelihood estimation procedures and examines how they react to various bid designs and sample sizes then it examines the presence and identification of outliers in binary choice data and how these outliers influence estimation finally it presents an alternative approach to addressing the issue of outliers which explicitly acknowledges the possibility of upwardly biased response probabilities

evaluating the effect of alternative risk communication devices on willingness to pay results from a dichotomous choice contingent valuation experiment two versions of a contingent valuation questionnaire that differ only in the device used to communicate risks from hazardous waste were sent to california households both risk communication devices provide wtp functions which vary in a statistically significant fashion with the absolute risk reduction however these empirical results also demonstrate that different risk communication devices produce statistically different logit equations and hence estimates of willingness to pay wtp for reductions in exposure to hazardous waste the pros and cons of using each risk communication device in cvm surveys is also discussed

respondent uncertainty in a contingent market for carbon offsets abstract the main objective of this paper is to provide additional empirical evidence of what explains respondent uncertainty in contingent valuation cv and how this in turn affects stated willingness to pay wtp air travelers asked to pay a carbon travel tax to offset carbon emissions from flying were asked how likely it is that they will actually pay if the tax is voluntary when changing the market compliance imperative from a mandatory carbon tax to a voluntary contribution a third of all air travelers consider it unlikely they will actually pay their stated wtp amount an ordered probit estimation approach is applied to identify the sources of respondent uncertainty besides the bid price respondent sense of responsibility and belief in the effectiveness of the voluntary carbon market are among the main reasons for the experienced uncertainty

reducing protest responses by deliberative monetary valuation improving the validity of biodiversity valuation this paper focuses on examining the validity of biodiversity valuation methodologies the results of a group deliberation technique deliberative monetary valuation are compared to those derived from a contingent valuation cv survey using the same environmental topic evidence is here presented that dmv can address some of the limitations of cv namely a prevalence for lexicographic preference ordering due to psychological reasons and the lack of a priori or well formed preferences both of these methodological shortcomings can result in protest responses which decrease the external validity of results it is common environmental valuation methodology practice to exclude protest responses from the analysis on the grounds that they are illegitimate choices thus the sample and consequently the environmental valuation analysis may become less representative of the population an advantage of the dmv methodology is that it was found to significantly reduce the rate of protest responses to less than half from 29 to 13 furthermore dmv significantly increased the proportion of positive bids but not the amounts contributed in relation to preference formation issues we suggest rethinking the current practice of the dmv method and propose dedicating the entire initial discussion session to introducing the good outside of a valuation context