willingness to pay for quality improvements comparative statics and interpretation of contingent valuation results this paper extends variation function theory by examining the effects of changes in prices quality and income on willingness to pay for quality change comparative static effects are found for both on site users and nonusers of the resource these results are used to interpret contingent valuation empirical models for example the substitution and complementary relationships between trips to natural resource sites can be identified this paper also suggests tests for comparison of contingent valuation with recreation demand models and other tests of validity

factors influencing differences between survey and market based environmental value measures a unique us database combining survey and housing data is used to obtain household level stated and market based willingness to pay wtp measures to avoid living near landfills systematic differe

averting behavior in the presence of public spillovers household control of nuisance pests this paper empirically imple ments an averting behavior model for gypsy moth control explicitly recognizing the joint pri vate and public spillover motivations for con trol the results demonstrate that averting be havior models can capture complex behavioral influences suggesting that such models can be extended beyond health related applications the model yields a reduced form parameter which cannot be identified using actual behavior data alone a method combining models of ac tual behavior and contingent behavior is piro posed as a way to directly measure the produc tion and preference effects jel q23

models for referendum data the structure of discrete choice models for contingent valuation abstract in 1979 bishop and heberlein introduced an appealing variant of the contingent valuation method which required only yes or no responses hanemann developed a utility theoretic interpretation of the yes no responses which has helped popularize the approach recently cameron has offered another interpretation also utility theoretic which she argues is more general than the hanemann random utility model this paper compares the deterministic models suggested by hanemann and cameron showing them to be dual to each other it shows that correct specification of either function must exclude endogenous variables such as quantity demanded it also demonstrates that using utility theoretic models allows one to compare travel cost models and contigent valuation models on the basis of their implied behavior not on the unobservable surplus or variation measure

empirical strategies for incorporating weak complementarity into consumer demand models abstract this article appraises existing empirical strategies for incorporating weak complementarity into consumer demand models the repackaging integrating back and discontinuity approaches are evaluated in terms of their behavioral implications and potential usefulness for applied research the appraisal suggests that the repackaging approach offers the most flexibility and tractability in the multi good demand system framework but the integrating back approach holds considerable promise in the single good context a multi good empirical comparison suggests that qualitatively similar policy inference arises from different repackaging approaches

the role of market forces in assuring contractual performance the conditions under which transactors can use the market repeat purchase mechanism of contract enforcement are examined increased price is shown to be a means of assuring contractual performance a necessary and sufficient condition for performance is the existence of price sufficiently above salvageable production costs so that the nonperforming firm loses a discounted steam of rents on future sales which is greater than the wealth increase from nonperformance this will generally imply a market price greater than the perfectly competitive price and rationalize investments in firm specific assets advertising investments thereby become a positive indicator of likely performance

precision of dichotomous choice contingent valuation welfare measures some simulation results the purpose of this research is to examine the roles of individuals heterogeneous economic factors and model misspecification in dichotomous choice contingent valuation welfare measurement willingness to pay for an improvement of environmental quality is studied simulation results indicate that the precision of welfare estimates increases with individuals income levels and decreases with the price of the quality related good the dependence of the consumption of the quality related good on the environmental quality also affects the reliability of welfare estimates

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

estimating willingness to pay for a cycling event using a willingness to travel approach abstract this study examines the monetary value of nonmarket benefits to participants of an active sport tourism event such as happiness and pride from participating in an event willingness to travel wtt greater distances for future events is assessed and converted into willingness to pay wtp estimates using travel costs using survey data from the 2014 and 2015 blood sweat gears bike ride the intended visitation models show that changes in travel cost have a significant negative effect wtp to revisit the event was between 41 and 57 the likelihood of return visit decreases as travel costs increase indicating that wtp estimates are internally valid wtp estimates stemming from two years of data collection are stable suggesting that they are also temporally reliable this study demonstrated the feasibility of using stated preference wtt questions to assign a monetary value to nonmarket benefits of active sport tourists

modeling discrete choices with augmented perception hurdles through creating latent perception hurdles associated with each attribute considered in a stated conjoint experiment this article describes a model that augments the conventional approach by utilizing the importance ratings provided by respondents prior to the discrete choice stage the resulting perception hurdle logit phl model has both advantages and disadvantages compared to the conditional logit cl and mixed logit models although the proposed model may not have the best within sample fit it outperforms the other two models in predicting choices in a hold out sample in addition the proposed model is also used to reveal that depending on their own characteristics and the process of the survey respondents may employ an array of different decision strategies

a note on defensive expenditures harmonised law diverse results in the context of many environmental hazards there is scope for self defence by victims multiple equilibria arise in a model of bilateral precaution under a regime of strict but incompletely enforced environmental liability this means that the same system of environmental law instigated in two economies may lead to very different outcomes it impacts upon policy analysis in a variety of ways and provides a channel for cultural factors to matter we explore the positive and normative effects of subsidising self defence

combining contingent valuation and travel cost data for the valuation of non market goods the travel cost method tcm has long been used to infer the economic value of nonmarket resources and public goods more recently contingent valuation cvm survey methods have gained popularity for eliciting these values here cvm survey responses are combined with tcm data on actual market behavior to estimate jointly both the parameters of the underlying utility function and its corresponding ordinary demand function this is a prototypical empirical example of a new modeling strategy variants of which should prove useful in many applications especially where reliance on a single valuation method is undesirable

estimating the demand for a new technology bt cotton and insecticide policies this article examines the potential demand for bt cotton in the southeast from information gathered in the first year of commercialization we combine revealed preference rp data on adoption of bt cotton varieties with stated preference sp data on willingness to adopt to estimate demand using a double bounded maximum likelihood procedure using estimated demand equations we simulate the costs of reducing conventional insecticide applications through subsidization of bt cotton results indicate that reducing cotton insecticide applications by 40 in the southeast would require a 21 acre subsidy with total annual program costs between 53 million and 60 million

policy evaluation with combined actual and contingent response data the city of marietta georgia experimentally switched from flat fee financing to volume based pricing for its trash services in january 1994 both before and during the experiment detailed data on individuals observed responses to the actual introduction and contingent behavioral responses to a hypothetical introduction of volume based pricing were collected this study applies these data and investigates the methodology of collecting contingent behavior data and their use in policy analysis in particular this study empirically evaluates the effect of experience with the policy on responses to contingent behavior questions and tests for potential bias in the contingent behavior data

the individual travel cost method with consumer specific values of travel time savings the treatment of the opportunity cost of travel time in travel cost models has been an area of research interest for many decades our analysis develops a methodology to combine the travel distance and travel time data with respondent specific estimates of the value of travel time savings vtts the individual vtts are elicited with the use of discrete choice stated preference methods the travel time valuation procedure is integrated into the travel cost valuation exercise to create a two equation structural model of site valuation since the travel time equation of the structural model incorporates individual preference heterogeneity the full structure model provides a travel cost site demand model based upon individualized values of time the methodology is illustrated in a study of recreational birdwatching more specifically visits to a stork village in poland we show that the usual practice of basing respondents vtts on 1 3 of their wage rate is largely unfounded and propose alternatives including a separate component of the travel cost survey aimed at valuation of respondents vtts or as a second best asking if they wish if their journey was shorter and for those who do use full hourly wage as an indicator of their vtts

discrete choice survey experiments a comparison using flexible methods abstract this study investigates the convergent validity of discrete choice contingent valuation cv and contingent rating ranking cr methods using flexible econometric methods our results suggest that cv and cr can produce consistent data achieve convergent validity when respondent s preferred choices and the same changes in environmental quality are considered we also find that cr models that go beyond modeling the preferred choice and include additional ranks cannot be pooled with the cv models accounting for preference heterogeneity via random coefficient models and their flexible structure does not make rejection of the hypothesis of convergent validity less likely but instead rejects the hypothesis to about the same degree or perhaps more frequently than fixed parameter models commonly used in the literature

utility consistent discrete continuous choices in soil conservation a utility consistent model of participation and participation intensity choices for a voluntary soil conservation program is developed a modified form of roy s identity is used to derive a two equation system that links the discrete dichotomous choice participation and the continuous choice intensity to the same utility function the model corrects for selectivity bias that arises in single equation approaches an application to a filter strip program in two counties in illinois and michigan demonstrates that different factors affect responses to the program across the sample regions estimated willingness to accept payments for participation in the program suggest policy impacts are not uniform across locations

buying a dream alternative models of demand for lotto existing lotto demand models utilize effective price computed as the face value of a ticket minus the expected value of prize money per ticket as their primary explanatory variable by contrast this article proposes a key role for consumption benefit or fun in the demand for gambling in general and lotto demand in particular it develops an alternative model of lotto demand that focuses on the maximum possible prize when this is tested against the traditional model using data from the u k national lottery we find that jackpot considerations exert an influence over and above that of variations in effective price

reputation and imperfect information abstract a common observation in the informal literature of economics and elsewhere is that is multistage games players may seek early in the game to acquire a reputation for being tough or benevolent or something else but this phenomenon is not observed in some formal game theoretic analyses of finite games such as selten s finitely repeated chain store game or in the finitely repeated prisoners dilemma we reexamine selten s model adding to it a small amount of imperfect or incomplete information about players payoffs and we find that this addition is sufficient to give rise to the reputation effect that one intuitively expects

combining revealed and stated preference methods to value environmental amenities at residential locations this paper combines an established revealed preference method discrete choice he donic analysis and a relatively new stated refer ence method choice based conjoint analysis in order to estimate more accurately the aesthetic benefits generated by the presence and quality of environmental amenities associated with residen tial locations it applies the combined approach to the housing market of fairfield connecticut which contains several environmental amenities and is experiencing an improvement in the quality of its coastal wetlands due to active restoration efforts jel q26

measuring welfare changes in settings with imposed quantities abstract an intuitively attractive money metric utility measure is developed which is applicable in settings where individuals receive fixed quantities of one or more goods one use of this measure is in cost benefit analyses of imposed quantity changes the approximate measures typically used are shown to be subject to relatively large approximation errors however techniques are presented which can always be used to numerically evaluate the exact welfare measure provided that one knows the uncompensated demand function s or marginal willingness to pay function s of individuals

is meta analysis a noah s ark for non market valuation this paper describes meta analytical methods as they have been applied to non market valuation research these studies have been used to review and synthesize literature and more recently in benefit transfer this second use imposes a higher standard on the consistency in economic concepts being summarized and in the resources included in a meta analysis to meet this need the paper proposes and illustrates a structural framework using a generalized method of moments estimator to estimate the parameters of a preference function with the benefits estimates usually encountered in meta analytic summaries

combining revealed and stated preferences consistency tests and their interpretations this article models the recreation demand for iowa wetlands combining survey data on both actual usage patterns i e revealed preferences rps and anticipated changes to those patterns under hypothetical increases in trip costs i e stated preferences sps we formulate and test specific hypotheses concerning potential sources of bias in each approach and discuss what can be learned about the validity of the models from such tests

a semi parametric estimator for revealed and stated preference data an application to recreational beach visitation abstract we present a semi parametric approach for jointly estimating revealed and stated preference recreation demand models the discrete factor method dfm allows for correlation across demand equations and incorporates unobserved heterogeneity our model is a generalized negative binomial with random effects the random effect is composed of a discrete representation of unobserved heterogeneity and a factor loading that translates the heterogeneity measure into a demand effect our empirical application is to beach recreation demand in north carolina statistical evidence supports our dfm specification which imposes less restriction on model dispersion and incorporates unobserved heterogeneity in a flexible manner elasticity estimates are smaller than those derived from models with parametric specifications for unobserved heterogeneity and welfare estimates are slightly larger and less precise while parametric models clearly dominate if the specification of unobserved heterogeneity is correct the semi parametric dfm provides a flexible alternative in cases where mis specification is a potential problem

convergent validity and the time consistency of preferences evidence from the iowa lakes recreation demand project we examine the consistency of preferences over time and as implied by revealed versus stated preference contingent behavior data studies in this area are typically based upon a single site and focus on consumer response to changes in travel cost or site access we use data from the iowa lakes project which provides information on usage patterns over several years and for 132 lakes along with detailed water quality data this allows us to test for convergence in how individuals respond to changing site characteristics as well as the consistency of preferences over time and between actual versus contingent trips

what is the optimal design for lottery linked savings programmes in this article we determine the optimal design of lottery linked savings lls programmes lls vehicles such as lottery bonds are financial instruments that preserve depositors principal but provide randomized variable returns to these depositors through periodic lottery drawings in lieu of the regular coupon payments traditionally received by bondholders this type of asset is very popular in europe we note that the framing of lls instruments is linked to their popularity and we attempt to elucidate that link and thereby determine the optimal structure of payments for lls programmes our goal is to frame lls programmes in a manner that both maximizes their investors satisfaction and preserves their ability to serve as inexpensive sources of capital for their issuers we demonstrate that the optimal pay off structure is characterized by a high level of skewness as investors are willing to accept a decrease in the small and medium prizes of the lottery in exchange for an increase in the grand pri

evaluation of nonmarket goods recovering unconditional preferences a new approach is proposed for the evaluation of nonmarket goods starting from a complete or incomplete conditional demand system for market goods which is observable and depends on nonmarket goods this information is not sufficient to recover the underlying preference ordering of the representative consumer the central idea is to employ additional marginal willingness to pay functions for the nonmarket goods since they can be estimated either together with the demand system or in a separate step they are less arbitrary than the assumptions or hypotheses usually made if the entire system is weakly integrable the underlying ordering and appropriate welfare measures can be derived in this article i investigate the relationship between conditional and unconditional demand systems present sufficient conditions for weak integrability and demonstrate the practicability of the procedure proposed by means of three examples

estimating the private benefits of vaccination against cholera in beira mozambique a travel cost approach abstract this paper reports the results of the first study that estimates households private demand for cholera vaccines using the travel cost method we take advantage of an unusual natural experiment in january 2004 more than 41 000 residents from various locations in beira mozambique received two doses of oral cholera vaccine free of charge during the first vaccination trial to test its effectiveness in an endemic cholera zone of africa about 30 000 people participated from outside the target zone resulting in long queues and an average waiting time of about 85 min per dose we estimated travel cost models of the revealed demand for cholera vaccines among households informed of the trial using information collected in in person interviews conducted during the summer of 2005 to explore households participation in the trial we used standard and zero inflated household count models for all household members and dichotomous choice models for the head of the household our analysis shows that the quantity of vaccines obtained by households and the likelihood of participation decreased as travel cost in time and transport expenses rose our best estimates of per capita willingness to pay for the two required doses of cholera vaccine are about 0 85 usd these estimates are sensitive to the assumed value of time spent acquiring vaccines

improving environmental valuation estimates through consistent use of revealed and stated preference information abstract environmental valuation data from stated and revealed preference methods are integrated into a unified model of preferences for environmental quality improvement that identifies the use and nonuse components of the total value estimate this articulates clearly what parts of the total value estimate come from each type of data and permits tests of whether estimated preferences satisfy weak complementarity between the environmental good of interest and related private goods the statistical advantages of using more information for the valuation problem are exploited while retaining flexibility to identify value estimates from any individual method of analysis

valuing environmental resources through demand for related commodities we examine the revealed preference theory underlying the welfare analysis of public goods e g environmental quality by observing the consumption of related commodities inspired by larson 1991 and ebert 1998 and extended from eom and larson 2006 an empirical strategy is formulated consistent with the theory of uniquely deriving use and nonuse values for a change in the public good we show that the weak complementarity assumption and the willig condition the common preference assumptions used to support the revealed preference methods for non market valuation may be tested as parameter restrictions a study of water quality valuation is presented to illustrate the proposed empirical strategy results show that the weak complementarity assumption and the willig condition generally do not hold in the case study and the consumer surplus derived from the indirect valuation method deviates largely from the exact welfare measures

innovation and reputation this paper analyzes a monopolist that markets successive generations of new and improving nondurable products prices research intensity and product innovations are derived as sequential equilibrium outcomes to a dynamic game with incomplete information asymmetric information is an important feature of the model the monopolist is fully aware of the current product s quality as are consumers who have tried it however the beliefs of other people are characterized by a probability distribution that depends on the monopolist s marketing strategy and the product s popularity the analysis illustrates a new context in which price signaling might serve as a mechanism for ensuring that only high quality products are marketed more important it shows how product life cycles are generated in the absence of signaling and how a reputation for producing high quality goods becomes established in such cases

combining revealed preference data with stated preference data a latent class approach a substantial literature exists combining data from revealed preference rp and stated preference sp sources aimed either at testing for the convergent validity of the two approaches used in nonmarket valuation or as a means of drawing on their relative strengths to improve the ultimate estimates of value in doing so it is assumed that convergence of the two elicitation approaches is an all or nothing proposition i e the rp and sp data are either consistent with each other or they are not the purpose of this paper is to propose an alternative framework that allows for possible divergence among individuals in terms the consistency between their rp and sp responses in particular we suggest the use of a latent class approach to segment the population into two groups the first group has rp and sp responses that are internally consistent while the remaining group exhibits some form of inconsistent preferences an em algorithm is employed in an empirical application that draws on the alberta and saskatchewan moose hunting data sets used in earlier combined rp and sp exercises the empirical results suggest that somewhere between one third and one half the sample exhibits consistent preferences we also examine differences in welfare estimates drawn from the two classes

determinants of participation in accelerated vehicle retirement programs one potential way to reduce hydrocarbon emission is through accelerated vehicle retirement programs however it is difficult to forecast participation rates in these programs because the number and characteristics of participants are likely to vary with the price offered to attract old cars this paper presents a theoretical model of the owner s car tenure and scrappage decision an econometric model of participation is then developed and estimated using data from a recent old vehicle scrap program in delaware participation rates at different possible offer prices are then predicted

spring cleaning rural water impacts valuation and property rights institutions the brief summarizes the spring cleaning rural water impacts valuation and property rights institutions the first two rounds of spring protection occurred in january april 2005 and august november 2005 the author measure health impacts of spring protection an investment that improves source water quality the author also estimate households valuation of spring protection and simulate the welfare impacts of alternatives to the current system of common property rights in water which limits incentives for private investment spring infrastructure investments reduce fecal contamination by 66 percent but household water quality improves less due to recontamination child diarrhea falls by one quarter travel cost based revealed preference estimates of households valuations are much smaller than both stated preference valuations and health planners valuations and are consistent with models in which the demand for health is highly income elastic the author estimate that private property norms would generate little additional investment while imposing large static costs due to above marginal cost pricing private property will function better at higher income levels or underwater scarcity and alternative institutions could yield pareto improvements

combining revealed and stated data to examine housing decisions using discrete choice analysis abstract this paper uses stated preference and revealed preference data separately and jointly to examine individuals housing choices in particular it combines an established revealed preference approach discrete choice analysis of actual housing purchases and a relatively new stated preference approach choice based conjoint analysis of hypothetical housing purchases to provide us with a better understanding of the factors driving housing decisions these methods are appropriately combined since they reflect the same decision process households select the dwelling that provides the best combination of attributes from the feasible set of alternatives in total this paper analyzes three data sets only actual housing purchases only hypothetical housing purchases and both types of purchases combined analysis finds that actual and hypothetical housing purchases are similar decision processes with respect to some attributes yet are dissimilar with respect to other attributes nevertheless combining the two types of data improves identification of both categories of attributes journal of economic literature classification number r21

information costs duration of search and turnover theory and applications this paper uses a formal model of search over multiattribute alternatives analyzed in a product market setting to investigate the theoretical foundations of the empirical literature on duration of search and turnover in product markets labor markets and marriage markets a number of specific empirical predictions are also derived in particular whether quality is a search attribute or an experience attribute is related to the cost of search the cost of inspection the price of the good and certain properties of the market distribution of price and quality

sparkling wine choice from supermarket shelves the impact of certification of origin and production practices we report the results of a study based on revealed and stated preference data on choice of prosecco wines in retail stores close to the origin of production in northern italy emphasis is placed on ability to reconcile the utility structure of stated preference data with that underlying revealed preference data we extend the analysis to cover nonattendance of key attributes such as price and certification of origin while controlling for the large range of brand effects

specification tests for mixed demand systems with an emphasis on combining contingent valuation and revealed data abstract in a world characterized by r unrationed goods i e market goods and n r rationed goods such as most environmental goods necessary and sufficient conditions for the existence of an underlying rational preference structure are derived based on a system of mixed demand functions with complete information with incomplete information the case of a partial demand system is addressed and a test for separability is proposed the implications for testing rationality in a world characterized by combined rp and sp individual data are examined for data consistency testable conditions are derived

perceptions versus objective measures of environmental quality in combined revealed and stated preference models of environmental valuation abstract this study examines perceptions and objective attribute measures in discrete choice models of recreation site choice behavior these forms of attribute measurement are examined in individual and combined revealed preference stated preference models our results suggest that the model based on perceptions slightly outperforms the models based on objective attribute measures however issues such as the definition of the choice set and the measurement of welfare present significant challenges when using perceptions data

augmenting travel cost models with contingent behavior data this paper proposes contingent behavior survey questions as a valuable supplement to observed data in travel cost models of non market demand for recreational resources a set of observed and contingent behavior results for each survey respondent allows the researcher to control for individual heterogeneity by taking advantage of panel data methods when exploring the nature of respondent demands the contingent scenarios also provide opportunities to a test for differences between observed and contingent preferences and or b assess likely demands under conditionsbeyond the domain of observed variation in costs or resource attributes most importantly contingent scenarios allow the researcher to imposeexogenously varying travel costs exogenous imposition of travel costs together with panel methods reduces the omitted variables bias that plagues observed data travel cost models of recreational demand using a convenience sample of data for illustrative purposes we show how to estimate the demand for recreational angling by combining observed and contingent behavior data we begin with simple naive pooled poisson models and progress to more theoretically appropriate fixed effects panel poisson specifications

combining revealed and stated preference data to estimate the nonmarket value of ecological services an assessment of the state of the science this paper reviews the marketing transportation and environmental economics literature on the joint estimation of revealed preference rp and stated preference sp data the rp and sp approaches are first described with a focus on the strengths and weaknesses of each recognizing these strengths and weaknesses the potential gains from combining data are described a classification system for combined data that emphasizes the type of data combination and the econometric models used is proposed a methodological review of the literature is pursued based on this classification system examples from the environmental economics literature are highlighted a discussion of the advantages and disadvantages of each type of jointly estimated model is then presented suggestions for future research in particular opportunities for application of these models to environmental quality valuation are presented

willingness to pay for ozone control inferences from the demand for medical care abstract the paper applies a discrete choice version of the household production approach to the valuation of nonmarket goods willingness to pay for tropospheric ozone control is estimated using medical care demand under assumptions of input necessity and weak complementarity in example calculations individuals living in high ozone areas are willing to pay over 170 annually for an environment in which ozone concentrations never exceed 12 pphm willingness to pay figures are two to four times larger than medical expense savings caused by the same ozone reductions estimates obtained are compared with results of previous studies and proposed ozone control measures are discussed

time is money improved valuation of time and transportation costs the proper valuation of time isimportant for estimating the demand for severaleconomic goods this paper explores the propervaluation of time when estimating recreationaldemand where time costs represent asubstantial portion of the purchase price toestimate demand this paper uses a travel costframework to analyze actual behavior revealedpreference data and hypothetical behavior stated preference data which is induced byhypothetical increases in access fees traveltime and travel distance by comparing theresponses to these three contingencies theanalysis adjusts and improves the valuation oftime costs as evidence of this improvement this analysis demonstrates a great increase inthe consistency between the revealed and stateddata similarly this paper improves thevaluation of transportation related costs

u s consumer demand for prize linked savings new evidence on a new product we report on the potential american demand for prize linked savings a savings account that also awards prizes our survey data suggests significant interest among individuals with little actual savings without regular saving habits who play lotteries extensively and are optimistic

information and bargaining in markets for environmental quality this paper explores the role of information on residential real estate prices housing transactions from 1990 formed the sample frame for surveying home buyers on their knowledge of local environmental disamenities both at the time their homes were purchased and when the survey was conducted of particular interest was home buyers knowledge of nearby landfill sites because of clustering of survey responses a sample selection model that combines transaction data with 1990 census micro data was used the results suggest that home buyers are poorly informed about disamenities and that those who are informed bid down the price of a home

when saving is gambling abstract prize linked savings pls accounts which allocate interest using lottery payments rather than fixed interest encourage savings by appealing to households gambling preferences i introduce new data on casino cash withdrawals to measure gambling and examine how individual gambling expenditures respond to the introduction of pls in nebraska using a difference in differences design after pls is introduced individuals who live in counties that offer pls reduce gambling by at least 3 more than unaffected individuals the substitution effect is stronger in low frills gambling environments which most resemble pls indicating that these accounts fulfill the desire to gamble

accounting for stochastic shadow values of time in discrete choice recreation demand models abstract in this paper a discrete choice recreation demand model that explicitly accounts for a stochastic shadow value of time function is proposed using data from a survey of san diego beach users the stochastic shadow value of time labor supply and beach choice are jointly estimated results from this joint estimation approach are compared with the familiar two step approach that estimates labor supply first and uses predicted values of time in the recreational site choice model the approaches produce markedly different welfare measures with the two step model which does not account for unobserved variability of time values predicting significantly higher values a monte carlo simulation illustrates how ignoring the stochastic nature of shadow value of time in discrete choice recreation demand models can bias model parameters and hence welfare estimates

structural benefit transfer an example using vsl estimates abstract this paper describes and illustrates a method for benefits transfer referred to as preference calibration or structural benefits transfer this approach requires selection of a preference model capable of describing individual choices over a set of market and associated non market goods to maximize utility when facing budget constraints once the structure is selected the next step involves defining the analytical expressions for the tradeoffs being represented by the set of available benefit measures these algebraic relationships are used with the benefit estimates from the literature to calibrate the parameters of the model the calibrated model then offers the basis for defining the new tradeoffs required for the policy analysis i e for transferring benefits a new application is used to illustrate the structural benefits transfer logic it involves the benefits for mortality risk reductions measured with labor market compensation a worker would accept to be willing to work with added risk the measure is usually labeled the value of a statistical life vsl our application indicates that we should not have expected differences in these measures for the economic value of risk reductions with age the calibrated estimates were not greatly different for combinations of risk levels labor supply choices wages and non wage income for older adults thus simple adjustments relying on value per discounted life year remaining seem questionable

consistency in mixed demand systems contingent valuation and travel cost data in contrast to previous literature we propose a consistency test that does not impose any particular common functional form for the preference structure underlying the travel cost tc and contingent valuation cv models we derive testable consistency conditions between tc and cv data in the context of mixed demand systems when valuing changes in environmental quality these conditions are a subset of the rationality conditions the proposed consistency tests are implemented combining tc and cv data the empirical results show that it is possible to combine stated tc and cv but not revealed tc and cv data

saving whilst gambling an empirical analysis of uk premium bonds for over three centuries and across the globe lottery linked savings lls programs have offered individuals the opportunity to save and in lieu of paying traditional interest have given savers periodic chances to win money or prizes despite their long history lls programs are relatively unstudied by scholars in this paper i detail an lls program that the uk government has offered continuously since 1956 the uk premium bond pb program pbs guarantee holders risk free return of nominal principal in aggregate they pay a market related return distributed to holders each month by a lottery like mechanism premium bonds are popular savings vehicles in the uk over 31 1 billion of pbs were outstanding as of march 2006 and public reports suggest that they were held by between 22 percent and 40 percent of uk citizens the 60 2 million residents of the uk had 517 invested in pbs per capita if held in the banking sector pb holdings would have accounted for 3 9 percent of household sterling deposits in uk financial institutions lls programs such as pbs are fascinating not just because of their size but because of their appeal to nonsavers especially low income families mauro guillen and adrian tschoegl 2002 reviewing lls programs in latin america concluded the bankers we spoke with believe that lls are especially successful with low income depositors and in cases where there are lots of people outside the banking system in south africa a new lls program raised over 1 2 billion rand and enrolled 750 000 participants across a wide spectrum of the economy in two years in the united kingdom while pbs are held by about the same fraction of the population holding stocks pbs have a stronger appeal to lower income british households pbs are held by a larger fraction of british households than are stocks and shares for all households except those earning over 52 000 annually department for work and pensions 2007 are pb holders saving gambling or engaging in both activities this question is not just academic because national laws and regulations in many countries bar private lls programs on the basis that they are prohibited gambling activities for example in south africa the government has tried to shut down the popular lls program mentioned above in the united states these programs would violate state lottery laws and federal banking regulations in this paper i analyze the time series of net sales of the pb program and conclude that the program appears to be a hybrid of gambling and savings but with a clear savings element

a joint latent class model combining likert scale preference statements with choice data to harvest preference heterogeneity in addition to choice questions revealed and stated choices preference surveys typically include other questions that provide information about preferences preference statement data include questions on the importance of different attributes of a good or the extent of agreement with a particular statement the intent of this paper is to model and jointly estimate preference heterogeneity using stated preference choice data and preference statement data the starting point for this analysis is the belief that the individual has preferences and both his her choices and preference statements are manifestations of those preferences our modeling contribution is linking the choice data and preference statement data in a latent class framework estimation is straightforward using the e m algorithm even though our model has hundreds of preference parameters our estimates demonstrate that 1 within a preference class the importance anglers associate with different green bay site characteristics is in accordance with their responses to the preference statements 2 estimated across class utility parameters for fishing green bay are affected by the preference statement data 3 estimated across class preference statement response probabilities are affected by the inclusion of the choice data and 4 both data sets influence the number of classes and the probability of belonging to a class as a function of the individual s type

price and advertising signals of product quality we present a signaling model based on ideas of phillip nelson in which both the introductory price and the level of directly uninformative advertising or other dissipative marketing expenditures are choice variables and may be used as signals for the initially unobservable quality of a newly introduced experience good repeat purchases play a crucial role in our model a second focus of the paper is on illustrating an approach to refining the set of equilibria in signalling games with multiple potential signals

willingness to pay for curbside recycling with detection and mitigation of hypothetical bias in this article we estimate willingness to pay for curbside recycling using a unique data set we also test for and detect significant hypothetical bias using stated and revealed preference data a short scripted cheap talk statement is used to mitigate the bias and provide more efficient estimates of the welfare impacts of curbside recycling programs copyright 2003 oxford university press

household use of agricultural chemicals for soil pest management and own labor for yard work in spite of its potential health and environmental risks and contribution to agribusiness the use of agricultural chemicals for yard care has not been well studied in our discrete continuous choice model estimated with data from a national survey a household chooses how much money if any to initially spend on types of agricultural chemicals and applicators and how much time to subsequently spend on other yard work households in big cities or with large gardens are more likely to use organic chemicals the probability that a household chooses a mix of do it yourself and hired applications of synthetic chemicals increases with income age and the presence of preschoolers among households that apply only synthetic chemicals without hired help those with young children with higher incomes in big cities and with male heads spend more on the chemicals the time that such households spend on other yard work increases with expenditures on the chemicals cancellation of a pesticide registration might create an extra private cost for households with young children even though the ban might reduce external costs

willingness to pay for quality improvements should revealed and stated preference data be combined abstract in this article we propose theoretically consistent welfare measurement of use and nonuse values for an improvement in environmental quality with revealed and stated preference data an analytical model based on the comparative static analysis of the variation function that describes the relationship between recreation demand and dichotomous choice contingent valuation models is estimated our results show that revealed and stated data should not be combined under the same assumed preference structure unless the two decisions imply the same change in behavior induced by the quality change in addition our results indicate scope effects in willingness to pay measures estimated with stated preference data

combining revealed and stated preference data to estimate preferences for residential amenities a gmm approach we show how stated preference information obtained from a choice experiment and revealed preference information based on housing market transactions can be combined via generalized method of moments gmm estimation specifically we use a moment condition matching the predicted marginal willingness to pay wtp from a first stage hedonic model to the marginal wtp formula implied by the choice experiment utility function this is coupled with other moments from the choice experiment to produce gmm based estimates of parameters that reflect the strengths of each data source our application values remediation of a contaminated site in buffalo new york and we find evidence in support of estimates arising from our approach jel q51 q53

revealed preference for public goods the most serious problem for the modern theory of optimal public expenditure is that although it has to be based on some social welfare function individual preferences for public goods which constitute the elements of any individualistic social welfare function are hard to assess it is argued that since every individual can freely participate in the consumption of a public good there is an incentive for him to either underreport or overreport his preferences depending on how the reported preferences are used in the financing process of the public good i this argument will be correct if an individual s preferences for public goods can be expressed only directly in many cases however the consumption of a public good has some technical or objective relationship with the consumption of some private goods thus the benefit an individual derives from free highways depends on how much he spends on a car and gasoline even the benefit an individual derives from the judicial system depends on how much he spends to hire the services of lawyers also an individual can enjoy the same security police provide by hiring private guards and installing locks and so on in these cases if we know the technical relationships between the consumption of private goods and the consumption of public goods then from the market data relating the amounts of private goods bought to prices and the data on the existing amounts of public goods we might be able to infer i the amounts of final goods consumed say the number of trips from one point to another the degree of justice the security from robbery etc and ii their opportunity costs which the individual was willing to pay but if we succeed in this inference then all that remains to be done in order to find the individual s utility function will be to integrate back the relationship between the amounts of final goods consumed and their opportunity costs a trivial example can be provided by assuming that each public good is perfectly substitutable with a private good let yi be the quantity of the ith public good and xi be the quantity of a private good which is a perfect substitute for the ith public good then the benefit derived from the ith public good and its perfect substitute can be measured by xi yi suppose we have ascertained an individual consumer s demand functions for private good when all the yi are zero we know from the revealed preference theory that if these demand functions satisfy a certain condition namely the symmetry of the slutsky matrix then there exists a utility function unique up to a monotone transformation

savings and prize linked savings accounts abstract many households have insufficient savings to handle moderate and routine consumption shocks many of these financially fragile households also have the highest lottery expenditures as a proportion of income this combination suggests that prize linked savings pls accounts combining security of principal with lottery type jackpots can increase savings among these at risk households results from an online experiment show that the introduction of pls accounts increase total savings and reduce lottery expenditures significantly especially among individuals with the lowest levels of savings and income the results imply that pls accounts offer a plausible market based solution to encourage individuals to increase savings

construct validity of dichotomous and polychotomous choice contingent valuation questions in this note we conduct construct validity tests for dichotomous choice dc and polychotomous choice pc contingent valuation questions contrary to previous results we find that dc and pc estimates of willingness to pay are theoretically valid convergent valid and similar in terms of statistical precision similar to previous results pc respondents are less sensitive to information than dc respondents we conclude that dc and pc valuation questions are construct valid for this study sequential pc valuation questions could be used in studies where obtaining information about the certainty or intensity of respondent preferences would be useful

consumer search with uncertain product quality this paper presents a unified model of consumer search when both prices and qualities are uncertain it is assumed that price can be observed prior to purchase but that quality can be observed only after purchase and experience this two stage decision problem is of particular interest since in practice there is usually some connection between quality and price of the many interesting implications of this dependence explored in this paper is the result that the usual reservation price rule may no longer be optimal indeed the optimal stopping set may take one of several alternative and more realistic forms