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

valuing the benefits of mobile mammographic screening units using the contingent valuation method the benefits of improving access to mammographic screening are estimated using a contingent valuation experiment conducted on 458 women in 19 rural australian towns the contingent valuation survey provides women with information on mammographic screening and uses a closed ended format to elicit their willingness to pay for a visit of a mobile mammographic screening unit single and double bounded versions of the discrete response contingent valuation method are employed in the estimation of willingness to pay the double bounded contingent valuation approach is shown to be biased due to respondents having a greater disposition to respond no when the bid amount in the follow up question is higher than the bid amount offered in the initial question several approaches to dealing with this bias are examined

should we use willingness to pay to elicit community preferences for health care new evidence from using a marginal approach abstract we describe a willingness to pay wtp survey in which values were elicited from the public for three disparate health care programmes previous applications of wtp in this context have revealed a high proportion of preference reversals between wtp values and ordinal ranking of the programmes in view of the doubts these findings raise over the use of wtp in this context our aim was to develop a method of eliciting wtp values which we considered would improve consistency between respondents explicit ranking of the programmes and their wtp values compared to the standard approach the structure of the new design the marginal approach reduced the number of possible preference reversals thus encouraging a degree of consistency among respondents despite this the marginal approach did not result in fewer preference reversal being observed in actuality thus casting doubt on the application of wtp in this context

should government fund assisted reproductive techniques a study using willingness to pay during recent years there has been a growth in the use of assisted reproductive techniques arts across europe america and australia this has resulted in debates about whether health insurance should cover this procedure this study used the closed ended ce willingness to pay wtp technique to establish the value the infertile place on in vitro fertilization ivf treatment in scotland the intention is to consider the use of the economic instrument of wtp for informing the debate on the public provision of ivf assuming that the value of the service outweighs the cost public provision should be encouraged the responses suggested that users of the service have a mean wtp of over 5000 for an attempt at ivf this compares with an average government expenditure of 7pound 2700 the internal validity of the ce wtp was also shown with income being positively related to wtp it is concluded that the ce wtp technique is potentially a useful tool for policy makers in considering the public provision of i

what big teeth you have identifying the motivations for exclusionary zoning this paper considers whether a number of the motivations for exclusionary zoning usually examined by economists are distinguishable from one another in a general theoretical model the four motivations identified are fiscal zoning public goods zoning consumption zoning and political economic zoning it is demonstrated in a general setting that the motivations are observationally equivalent if the only available information is community composition the most important implication of this finding is that a policy directed at alleviating one motive for zoning inevitably affects other motives the existence of exclusionary zoning does not constitute a prima facie case for any particular intervention rather the true motivations behind the observed pattern of land use and land use controls must be identified

measuring positive externalities from unobservable victim precaution an empirical analysis of lojack lojack is a hidden radio transmitter device used for retrieving stolen vehicles because there is no external indication that lojack has been installed it does not directly affect the likelihood that a protected car will be stolen there may however be positive externalities due to general deterrence we find that the availability of lojack is associated with a sharp fall in auto theft rates of other crime do not change appreciably at least historically the marginal social benefit of an additional unit of lojack has been fifteen times greater than the marginal social cost in high crime areas those who install lojack however obtain less than 10 percent of the total social benefits leading to underprovision by the market

individual heterogeneity and censoring in panel data estimates of tobacco expenditure a panel of households is used to test the rational addiction model of becker et al 1994 these data raise problems of measurement errors censoring and unobservable heterogeneity we use sample separation information to exclude those households who never purchase tobacco to deal with the remaining zeros we compare specifications based on infrequency of purchase and on censoring gmm and system gmm are used to deal with errors in variables and unobservable heterogeneity within groups two step within groups three step gmm and minimum distance methods are used to allow for censoring there is evidence that the rational addiction specification is sensitive to unobservable heterogeneity and censoring copyright 2002 john wiley sons ltd

a comparison of contingent preference models i compare the informational efficiencies of contingent rating contingent ranking and two contingent paired comparison methods as alternatives to the referendum contingent valuation method the contingent rating method is hypothesized to be most efficient because ratings convey information on preference intensities and can uniquely represent respondent indifference or ambivalence survey data on hunters ratings of alternative hypothetical hunting trips are used to estimate four alternative indirect utility models from which marginal willingness to pay measures for individual trip attributes are derived model comparison wtp estimates and their confidence intervals confirm the relative efficiency of the contingent rating approach

eliciting preferences for collectively financed health programmes the willingness to assign approach improving public involvement in health system decision making stands as a primary health policy goal however still limited guidance is available on how best to elicit preferences for health care programmes this study examines a contingent choice technique to elicit preferences among health programmes and named willingness to assign wtas wtas reveals relative monetary based values of a set of competing public programmes under a hypothetical healthcare budget assessment experimental evidence is reported from a deliberative empirical study valuing ten health programmes in the context of the catalan health service evidence from this experimental study reveals that within the context of multiple programmes preferences are internally more consistent and slightly less affected by preference reversals as compared to values revealed from an adapted technique eliciting the willingness to pay wtp extra taxes another finding suggests that although programmes promoting health received the higher rel

cops and crime abstract the violent crime control and law enforcement act of 1994 established the community oriented policing services cops program that provided grants to states and localities to pay up to 75 of the cost for new police hires for 3 years to date the cops program has awarded almost 5 billion in hiring grants paying for 64 000 new police officers we use annual data from 1990 through 2001 from 2074 cities with populations in excess of 10 000 to show that for each officer paid for by grant funds the size of the force expands by 0 70 officers the size of cops grants are correlated with population and crime rates but not the pre cops time trends in crime rates or the size of the police force this allows us to use the size of cops grants as an instrument for the size of the police force in regressions where crime is the outcome of interest these models indicate that police added to the force by cops generated statistically significant reductions in auto thefts burglaries robberies and aggravated assaults

using electoral cycles in police hiring to estimate the effect of police on crime comment previous empirical studies have uncovered little evidence that police reduce crime possibly due to simultaneity problems this paper uses the timing of mayoral and gubernatorial elections as an instrumental variable to identify a causal effect of police on crime increases in the size of police forces are shown to be disproportionately concentrated in mayoral and gubernatorial election years increases in police are shown to substantially reduce violent crime but have a smaller impact on property crime the null hypothesis that the marginal social benefit of reduced crime equals the costs of hiring additional police cannot be rejected

measuring the economic benefits of recycling the case of the waste agricultural film in korea recently increase of the waste agricultural film waf raises the loss of the resources and produces the environmental damage in korea the korean government has established the basic plan for increasing the recycling rate and abating the environmental damage the objective of this paper is to estimate the economic benefits attached to the policy of recycling the waf using contingent valuation method aiming to provide policy makers with useful information to make an informed public decision in recycling the waf the overall results show that the respondents well accepted the contingent market and would be willing to pay a significant amount for the proposed policy of recycling the waf the mean willingness to pay and the truncated mean willingness to pay per household were 4641 korean won us 3 6 and 5730 korean won us 4 4 respectively total economic benefits for the population amounted to approximately 14 33 billion korean won us 11 02 million per year this quantitative information can be use

support for public provision of a private good with top up and opt out a controlled laboratory experiment abstract this paper presents the results of a revealed choice experiment testing the theoretical predictions of political economy models regarding public support for a publicly provided private good financed with proportional income taxes when individuals can purchase the good privately and either continue to consume public provision top up or forego public provision opt out but in each case continue to pay income taxes our laboratory results confirm behavior is consistent with the predicted majority preferred tax rate under mixed financing with top up but we identify preferences for significantly higher rates of public provision than predicted under mixed financing with opt out using non parametric regression analysis we explore the relationship between individuals top up and opt out decisions and both their income levels and the implemented tax rates

public vs private demand for covering long term care expenditures this article studies the determinants of the willingness to pay wtp for long term care ltc insurance coverage two alternatives are considered one compulsory financed through taxes the other purchased on a voluntary basis and paid through a premium wtp was elicited through open ended contingent valuation within a survey conducted in the italian region emilia romagna about ltc population needs we model information on individual wtp as a two stage process where respondents first establish their interest for ltc cover then state their wtp results show that interest and wtp are influenced by different variables and that differences arise also between the wtp for public and private coverage

tax price effects on attitudes to hypothecated tax increases abstract perceptions of private benefits from hypothecated tax increases may be more or less correlated with income both because individuals with different incomes have different interests in expanding public services and because they anticipate bearing different shares of the implied tax burden we report on analysis of cross sectional data from the united kingdom in which respondents have been randomly allocated to different but precisely specified tax instruments in a way which should allow separation of the two effects we estimate perceptions of tax costs and attitudes to tax increases jointly finding little evidence of any effect from tax prices on perceptions of private benefits from increased public spending this renders implausible the suggestion that the weak income correlations in this data might be arising from offsetting income and price effects nonetheless the special features of the data allow us to show perceptions of tax increases are correlated with both observed and unobserved influences on demand in a way which has the potential to generate serious biases in demand estimates if ignored

beyond mobile number portability measuring consumer preferences for service portability in japan s mobile phone market japan s mobile phone market has been oligopolized by three incumbents who are seeking vertically integrated business models which may prevent competitors from using platform layers to provide original services we conduct two types of conjoint analysis to measure consumer stated preferences and draw two main conclusions from the analyses first the average consumer is willing to pay more than jpy 2000 us 20 to increase mobile service portability second the average consumer s willingness to pay corresponds to jpy 100 200 us 1 2 per song for securing music download platforms a dilemma exists in consumer preferences for service portability in japan s mobile phone market namely the choice between free mobile service portability and convenient music download platforms

consumers preferences for the attributes of post pc results of a contingent ranking study with the explosive growth of the internet and the change in consumer demand post pc is emerging as a substitute for the existing desktop pc and laptop pc post pc is a new computer which is portable with wireless networking cheaper than the existing pc and specializing in the specific functions that consumers want rudimentary post pcs such as pda web pad and smart phone are already in use in the future owing to technological progress the heterogeneity of related companies and the low entry barrier various post pcs will be developed this paper attempts to analyse consumers willingness to pay wtp for post pc with such attributes as portability cpu speed data input method using key board or electric pen monitor size and price to this end a contingent ranking method is applied which makes the respondents rank hypothetical post pc alternatives featuring various combinations of attributes via a survey data collected in korea using the estimated wtp the shape and the capacity of future po

how much are people willing to pay for silence a contingent valuation study despite its major importance in the urban environment the problem of noise has received little attention from environmental economists in this paper the economic value of a noise reduction programme is evaluated the chosen technique is contingent valuation using the recently proposed one and one half bound question format this new question format reduces the potential for response bias in multiple bound formats such as the double bound model while maintaining much of its efficiency through the estimations it is found that urban residents generally value noise negatively that is households are willing to pay for a noise reduction in particular it is found that households are willing to pay approximately four euros per decibel per year a further finding is that interviewees show scope sensitivity that is households display a different willingness to pay for different degrees of noise reduction most are willing to pay more for larger decreases in the level of disturbance from noise

the non use benefits of enhancing forest biodiversity a contingent ranking study until recently the majority of commercial forestry in the uk has comprised blanket planting of non native coniferous species which typically do not offer a high level of biodiversity however the uk government and consequently the uk forestry commission are committed under various international agreements to conserve and enhance biodiversity in british forests the study reported in this paper estimates that substantial non use values would be generated if the forestry commission were to continue in its current efforts to develop management practices that promote an increase in biodiversity across a large area of its commercial holdings in remote parts of the country which are seldom visited rather than adopting a referendum type contingent valuation method a discrete choice contingent ranking approach is used to estimate the general public s willingness to pay to increase the area of these forests managed under each of three forest management standards designed to offer increasing levels of biodiversity at the expense of commercial timber production this permits relative preferences for different forest management standards to be measured at the same time as willingness to pay to enhance biodiversity

validity of discrete choice experiments evidence for health risk reduction there is growing interest in discrete choice experiment dce as a method to elicit consumers preferences in the health care sector increasingly this method is used to determine willingness to pay wtp for health related goods however its external validity in the health care domain has not been investigated until now this paper examines the external validity of dce concerning the reduction of a health risk convergent validity is examined by comparing the value of a statistical life with other preference elicitation techniques such as revealed preference criterion validity is shown by comparing wtp values derived from stated choices in the experiment with those derived from actual choices made by the same individuals both tests provide strong evidence in favour of external validity of the dce method

willingness and ability of bulgarian consumers to pay for improved public health care services an application of the contingent valuation method to the willingness and ability of bulgarian consumers to pay for public health care services is presented the study uses data from a household survey conducted in may june 2000 the willingness and ability to pay for outpatient inpatient and dental services is investigated a combination of interval checklist and open ended questions are used to elicit the willingness to pay amounts the impact of the sociodemographic characteristics on the responses is examined by a generalized tobit regression based on the regression equation the welfare effects of various fee levels are simulated

a panel data analysis of the effect of corruption on tourism this study empirically tests the hypothesis that corruption has a negative effect on tourism having to pay bribes while on holiday or a business trip increases the costs of travelling to a country where corruption is prevalent tourists are thus more likely to travel to countries where these additional costs do not need to be incurred this hypothesis is tested using a panel data set of over 100 countries and 16 years the results indicate that a 1 point increase in the corruption perception index implying a decrease in corruption results in a 2 to 7 increase in tourist inflows in addition tourist inflows rise with gdp per capita openness and growth and are higher in countries with a temperate climate

privately produced general deterrence in this study we use county data on private security establishments and employment for 1977 92 to test two hypotheses first we test whether private security deters crime second we test whether john lott and david mustard s estimates of the impact of shall issue laws on crime are biased because of a lack of controls for private security we find little evidence that private security reduces the crime rates for assault or larceny some estimates suggest murder robbery and or auto theft may be deterred by private security although these results are not robust of all the index crime categories only rape is estimated to have a consistent negative relationship with private security in addition we find little evidence that the lott and mustard results are biased because of a lack of controls for the private security measures employed in this study

the occupations of regulators influence occupational regulation evidence from the us private security industry licensing requirements for us private security firms and guards differ substantially from state to state state regulatory institutions for this industry also vary considerably some states have specialized regulatory boards with industry personnel guards firm owners and or public police as board members while others rely on non specialized regulators such as departments of commerce state professional regulation or consumer affairs these cross state variations in licensing requirements and regulatory institutions provide an opportunity to explore relationships between the two private security regulation is of particular interest in this context because previous empirical research implies that allocating more resources to private security reduces crime and that relatively stringent licensing requirements limit entry thereby increasing crime a panel of 1991 2010 state data is employed to see if particular regulatory institutions are associated with particular licensing requirements empirical results suggest that requirements for entry into this market tend to be relatively strict when active private security personnel are in control of licensing and that different patterns of regulation generally apply when police or non specialized agencies control licensing therefore both public interest and private interest explanations for the observed relationships between the structure of regulatory institutions and resulting licensing requirements are discussed

belief in a just world and redistributive politics international surveys reveal wide differences between the views held in different countries concerning the causes of wealth or poverty and the extent to which people are responsible for their own fate at the same time social ethnographies and experiments by psychologists demonstrate individuals recurrent struggle with cognitive dissonance as they seek to maintain and pass on to their children a view of the world where effort ultimately pays off and everyone gets their just deserts this paper offers a model that helps explain i why most people feel such a need to believe in a just world ii why this need and therefore the prevalence of the belief varies considerably across countries iii the implications of this phenomenon for international differences in political ideology levels of redistribution labor supply aggregate income and popular perceptions of the poor the model shows in particular how complementarities arise endogenously between individuals desired beliefs or ideological choices resulting in two equilibria a first american equilibrium is characterized by a high prevalence of just world beliefs among the population and relatively laissez faire policies the other european equilibrium is characterized by more pessimism about the role of effort in economic outcomes and a more extensive welfare state more generally the paper develops a theory of collective beliefs and motivated cognitions including those concerning money consumption and happiness as well as religion

the structure of tourist expenditure in fiji evidence from unit root structural break tests the central aim of this paper is to investigate whether shocks to fiji s tourism industry have a permanent effect or a transitory effect on tourist expenditure in fiji to accomplish this aim the zivot and andrews 1992 one break test and the lumsdaine and papell 1997 two break tests are used the one break and two break tests reveal 1987 the year of the military coups in fiji as the year of the break moreover it is possible to reject the unit root null leading to the conclusion that shocks to fiji s tourism industry have a transitory effect on tourist expenditure in fiji

identifying the effect of unemployment on crime abstract in this paper we analyze the relationship between unemployment and crime using u s state data we estimate the effect of unemployment on the rates of seven felony offenses we control extensively for state level demographic and economic factors and estimate specifications that include state specific time trends state effects and year effects in addition we use prime defense contracts and a state specific measure of exposure to oil shocks as instruments for unemployment rates we find significantly positive effects of unemployment on property crime rates that are stable across model specifications our estimates suggest that a substantial portion of the decline in property crime rates during the 1990s is attributable to the decline in the unemployment rate the evidence for violent crime is considerably weaker however a closer analysis of the violent crime of rape yields some evidence that the employment prospects of males are weakly related to state rape rates

the public value of improving a weather forecasting system in korea a choice experiment study abstractthe korean government plans to improve the quality of its weather forecasting system in order to increase its public utility the benefits arising from the implementation of this plan shoul

a constructive approach to air quality valuation in korea abstract this paper uses a new constructive contingent valuation approach based on the value structuring capabilities of multi attribute utility theory maut to help respondents construct and express environmental value judgments in monetary terms the maut approach adopts a decomposition procedure which seems to be more in harmony with the constructive nature of human values and the coping strategies of respondents dealing with complexity we provide an application of the approach in a survey of random population samples where we seek valuation of specific damages due to air pollution in seoul korea a developing country where the economic valuation of environmental impacts remains scarce a discussion of the results is also presented the overall results show that although empirical evidence is sparse there appears to be considerable scope for the use of the approach in environmental valuations

validity of open ended and payment scale approaches to eliciting willingness to pay the open ended and payment scale approaches to eliciting willingness to pay wtp valuations are compared use of the payment scale led to a higher response rate a higher rate of completion of the wtp question higher mean and median wtp values a stronger association between wtp and ability to pay and a higher r2 in regression analysis of wtp on several independent variables taking these results in combination it can be inferred that the payment scale technique leads to more valid wtp values than use of the open ended approach

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

measuring performance in primary care econometric analysis and dea we use data from the health service indicators database to compare different methods of measuring the performance of english family health services authorities fhsas in providing primary care a variety of regression and data envelopment analysis methods are compared as summary efficiency measures of individual fhsa performance the correlation of the rankings of fhsas across dea and regression methods across two years of data and across three different specifications of the technology of primary care are examined efficiency scores are highly correlated within variants of the two methods and across years for a given method inter method correlations are smaller and correlations across different specifications of the primary care production process are negligible and sometime negative

using contingent valuation to elicit public preferences for water fluoridation the methods and results of a contingent valuation survey to elicit public preferences for water fluoridation are reported the study demonstrates that not only is it important to acknowledge that there will be losers from the introduction of such a programme but that losers must be allowed to express a value for the magnitude of their perceived loss two methods of valuing this loss are explored conventional willingness to accept compensation questions are compared with questions in which losers are asked to state their willingness to pay to prevent their water being fluoridated the results provide tentative support for asking willingness to pay to prevent questions instead of willingness to accept questions when evaluating certain types of public good the issue of protest responses in contingent valuation surveys is also highlighted and discussed

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

choice modelling approaches a superior alternative for environmental valuation in this paper we examine some popular choice modelling approaches to environmental valuation which can be considered as alternatives to more familiar valuation techniques based on stated preferences such as the contingent valuation method a number of choice modelling methods are consistent with consumer theory and its focus on an attribute based theory of value permits a superior representation of many environmental management contexts however choice modelling surveys can place a severe cognitive burden upon respondents and induce satisficing rather than maximising behavioural patterns in this framework we seek to identify the best available choice modelling alternative and investigate its potential to solve some of the major biases associated with standard contingent valuation we then discuss its use in the light of policy appraisal needs within the eu an application to the demand for rock climbing in scotland is provided as an illustration

the regional impact of health care expenditure the case of italy decentralization invests the subcentral authorities of a country with autonomy in political and economic power the exercise of which may widen interregional divergence and inequality this paper provides evidence demonstrating that in the case of italy the central government s policies for rationalization and containment of the growth of health care expenditure in combination with decentralization in the administration and provision of health care have resulted in interregional inequality aggravating the existing regional divergence

the rational nonpurchase of long term care insurance only a tiny fraction of the nonpoor population currently purchases private insurance coverage against long term care ltc costs studies generally attribute the failure to purchase private coverage to unawareness by potential purchasers of the benefits of coverage and a misperception that medicare currently covers long term care i explore alternative reasons for failure to purchase coverage by well informed expected utility maximizing risk averse individuals for whom ltc is associated with a large increase in mortality and for whom family members represent an alternative source of care there may be no demand for ltc insurance even if it is made available at actuarially fair premiums because the main consequence of coverage is to enhance the expected value of one s estate

willingness to pay for improved air quality in sweden the aim of the paper is to quantify individual willingness to pay measures of improved air quality in sweden by using the contingent valuation method cvm such measures are important for policy makers when deciding about public investments and policy instruments in order to regulate environmental impacts e g from road transportation and industry the mean willingness to pay wtp for a 50 reduction of harmful substances where the respondents live and work was about 2000 sek year which is of the same order of magnitude as earlier stated preference studies in nordic countries most parameters in the econometric analysis had the expected sign wtp was increasing in income wealth and education it was larger for men members of environmental organizations people living in big cities which are on average more polluted and people who own their house or apartment it was lower for retired people however the additional wtp for people in big cities although significantly higher than for other people

labour income uncertainty taxation and public good provision this article examines optimal nonlinear income taxation commodity taxation and public good provision under income uncertainty in a moral hazard framework uniform commodity taxation and the samuelson rule for public good provision are desirable under similar conditions as in the conventional tax model deviations from these rules is warranted if one can encourage effort by subsidising certain goods and overproviding public goods we also determine a rule for the optimal marginal income tax rate and provide some numerical simulations conditions for the validity of the solution procedure used in this class of models the first order approach are also explored uncertainty is a key component of many important real world decision making processes consider for example an individual s decision to acquire specific skills through education educational investments must be made well before the resolution of uncertainty related to the returns to skill thus the tax system which affects the net returns of different skill levels has a potentially large impact on educational decisions skill attainment and productivity a progressive tax system offers insurance to workers by redistributing income from the lucky to the unlucky other forms of social insurance such as unemployment and health insurance work in a similar manner a well known problem in the design of optimal income tax under uncertainty or any insurance mechanism is asymmetric information between the government and individuals income is partly due to individual effort and partly due to luck but the planner can only observe realised income not effort the optimal redistribution scheme is a balance between providing the workers with adequate incentives to acquire skills and sufficient insurance mirrlees 1974 was the first to examine the design of optimal redistributive income tax under income uncertainty this moral hazard model later used among others by varian 1980 tuomala 1984 and low and maldoom 2004 is an alternative to the more well known adverse selection model of mirrlees 1971 where income dispersion arises from differences in innate skill levels the moral hazard model is perhaps most appealing in the tax context when effort is interpreted as an ex ante decision on educational investment alternatively one can interpret the discussion as a general analysis of social insurance 1 income tax is only one element albeit an important one in the design of optimal government redistributive policy indeed recent optimal tax literature has devoted a lot of attention to the use of other instruments such as commodity taxation minimum

welfare state and life satisfaction evidence from public health care we examine the link between the welfare state and citizens subjective wellbeing by using evidence from public health care services by combining local level data on public health care and individual level data on life satisfaction we show that relatively high expenditures in health care have a positive effect on individuals life satisfaction in our data we find some evidence for an ends against the middle equilibrium in provision of public health care where middle income individuals prefer higher public expenditure than low income or high income individuals further our results indicate that the welfare benefit of public provision depends on individual political orientation

on visible choice sets and scope sensitivity abstract in this paper we argue that the burgeoning empirical debate over scope sensitivity within contingent valuation studies is fundamentally incomplete in that it has neglected a systematic examination of certain effects of study design upon observed scope sensitivity in particular we highlight the fact that in certain study designs the choice set initially offered or visible to respondents is changed in a stepwise manner as they progress through a valuation exercise while other designs involve advance disclosure regarding the full extent of the final visible choice set prior to any choices or values being elicited the issue of changes in the visible choice set is alluded to by smith j environ econom manage 22 1 71 who identifies this as a primary challenge to kahneman and knetsch s j environ econom manage 22 1 57 well known experimental results kahneman and knetsch contend that it seems highly implausible that this minor procedural change would significantly alter results p 61 but do not test this assertion we present experimental and field tests of the impact upon contingent values of varying the visible choice set through stepwise and advance disclosure these dimensions of design are interacted with changes in the order in which nested goods are presented bottom up versus top down when a stepwise disclosure procedure is adopted the observed scope sensitivity is substantially and significantly affected by the order in which goods are presented but such procedural variance is not observed within advance disclosure designs conjectures regarding the origin and implications of such findings are presented

a stated preference approach to assessing health care quality improvements in palestine from theoretical validity to policy implications user fees have been promoted as a potential complementary funding mechanism for health care in developing countries in this paper we appraise the use of contingent valuation cv as a tool to help develop user fees schemes that could be used to assist in allocating and partially fund health care a random sample of 499 patients seeking care in primary health care centers in palestine were asked to reveal their willingness to pay values for specified improvements in the quality of delivered medical care empirical analysis suggests that in this context cv can lead to internally consistent results and useful policy implications

constrained choice sets in the u k demand for private medical insurance abstract the paper examines the demand for a privately supplied good private medical insurance in a market dominated by a large public supplier it is argued that the high political visibility of the public alternative means that individual demand for private medical insurance is the outcome of two processes the first process is one of choice set generation the second process is that of the choice between the insurance and the no insurance prospects the factors affecting these processes are discussed and an econometric specification suggested the estimation results indicate the importance of political belief in determining choice sets and of income and health in determining choice between the two prospects

do existence values for cost benefit analysis exist the use of the contingent valuation method to generate estimates of existence value for input to cost benefit analysis requires that individuals have utility functions defined over the relevant arguments the validity of the assumption that the required utility functions generally exist has been questioned it has been argued that some individuals will respond on the basis of lexicographic preference orderings it has also been argued that some individuals do not consider that market or individual willingness to pay criteria are appropriate where existence value type issues are at stake the paper considers survey evidence bearing upon these arguments it is concluded that the evidence is consistent with the view that it is incorrect to proceed on the assumption that individuals generally satisfy the assumptions required for the existence of existence values for use in cost benefit analysis

performing arts attendance an economic approach this paper examines to what extent art education prices and standard socio economic characteristics influence attendance at professional performing arts events theatre classical music opera ballet and dance it distinguishes the influence such variables have on whether a person participates or not from the effect that they have on the number of times a person decides to attend the introduction of art education and price variables is likely to reduce the omitted variable bias present in previous empirical studies and improve estimations art education is highly correlated with participation while it is not equally associated with frequency of attendance prices and geographical concentration are generally not correlated with participation however there are large differences among art forms and economic resources appear to be relevant in the case of classical music policy makers can use information on what results can be expected from policies aimed at reducing prices or increase art education in

statistical models for zero expenditures in household budgets household budget surveys are an important source of data on consumer s expenditure not just for individual consumers but also for estimating national aggregates however it is a widespread finding that for certain commodities most notably tobacco and alcohol the estimate from the household survey falls short of the known consumption total calculated with some confidence from data on production imports exports and excise duties for example in the british family expenditure survey with which we shall largely be concerned total tobacco expenditure was underestimated in 1976 by 21 percent see kemsley redpath and holmes 1980 p 51 much of this understatement together with that on alcohol is thought to occur because of the design of the survey which excludes many persons amongst whom consumption of such items is thought to be atypically high e g prisoners hoteliers and their residents merchant seamen even so the possibility remains that some of the understatement is due to various types of misreporting by households included in the survey in this paper we consider a model in which the standard tobit specification tobin 1958 is supplemented by the operation of a simple binary censor the tobit model is essentially a linear regression model in which non positive observations of the dependent variable are replaced by zero we take this specification as our starting point but add a second censoring process that randomly replaces a fraction of the observations generated by the tobit model bv zeroes the combined model can serve as a representation of several types of

quality of life and the wtp for an increased life expectancy at an advanced age abstract in this study we report an attempt to measure the value adult swedes impute to an increased survival probability at high ages a rating scale between the worst possible quality of life 1 and the best possible quality of life 10 is used to indicate the quality of life a person expects to achieve at an advanced age we find a highly significant correlation between this quality measure and the insurance premium a person is willing to pay in exchange for a programme increasing the expected length of life by one year conditional on having survived until the age of 75 years the maximum insurance premium the average person is willing to pay for such a programme is less than 1500 the willingness to pay increase with a person s age but at a low rate the implied average marginal rate of time preference is about 1 percent

using conjoint analysis to derive estimates of compensating variation abstract we use several approaches to derive estimates of hicksian compensating variation from conjoint ratings data the different estimation approaches produced mixed results with respect to consistency with utility theory statistical significance of key variables magnitude of welfare estimates and confidence bounds on welfare estimates these findings suggest conjoint analyses are not a panacea for the problems being debated regarding contingent valuation and travel cost methodologies and conjoint questions appear to share many of the advantages and disadvantages associated with dichotomous choice contingent valuation questions

a double hurdle model of cigarette consumption this paper shows the importance of the double hurdle approach for modelling individuals cigarette consumption using data from the uk general household survey and argues that participation and consumption should be treated as separate individual choices the likelihood function for the full double hurdle is derived and it is shown how restrictions on the stochastic specification of the model and auxillary information which identifies ex smokers allow it to be decomposed the empirical results highlight the value of the sample separation information and the need to model starting and quitting as separate decisions

is cultural heritage really important for tourists a contingent rating study in this article we present the results of a contingent rating study carried out on a sample of tourisits visiting scicli a sicilian town known for its baroque heritage in particular we focus on different attributes of tourism products namely season accommodation and cultural heritage to study how much each of these attributes weights in tourists preferences we also study how the socio demographic characteristics of people affect their evaluation of the different attributes of tourism products the heritage endowment appears to be far from being the most important factor this result is consistent across different socio demographic subgroups of interviewed persons

public provision of private goods government may provide a good that can if legally permitted be supplemented by private purchases policy is determined by majority rule under standard assumptions on preferences a majority voting equilibrium exists a regime of positive government provision with no restriction on private supplements is shown to be majority preferred to a regime of either only market provision or only government provision combined public and private expenditure on the good is higher under this dual provision regime than under either of the alternatives under some preference configurations the median income voter is pivotal under others a voter with income below the median is pivotal

the determinants of the demand for private health insurance under medicare since the introduction of medicare in 1984 the proportion of the australian population with private health insurance has declined considerably insurance for health care consumption is compulsory for the public health sector but optional for the private health sector in this paper we explore a number of important issues in the demand for private health insurance in australia the socio economic variables which influence demand are examined using a binary logit model a number of simulations are performed to highlight the influence and relative importance of various characteristics such as age income health status and geographical location on demand a number of important policy issues in the private health insurance market are highlighted first evidence is provided of adverse selection in the private health insurance pool second the notion of the wealthy uninsured is refuted and finally it is confirmed that there are significant interstate differences in the demand for private health insurance

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

does private security affect crime a test using state regulations as instruments private security is employed to deter criminals from attacking specific targets presumably not to produce general deterrence indeed private security generates negative spillovers as criminals su

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

a comparison of two methods for eliciting contingent valuations of colorectal cancer screening willingness to pay wtp is being used increasingly in health technology assessment although a number of methodological issues remain unresolved using data obtained from a randomised questionnaire survey we investigated the metrical properties of two wtp formats the open ended question versus the payment scale in the context of screening for colorectal cancer approximately 2800 responses were analysed household income attitudes toward health promotion and personal risk perceptions were the principal determinants of the nature and value of response in comparison with the open ended format the payment scale achieved a higher completion rate and generated higher valuations we believe that a framing effect is the most plausible explanation for these differences in performance in contrast to previous findings we do not find subjects perceptions of the resource cost of interventions to be a convincing explanation for either their wtp values or inconsistencies between values and preferences although a proportion of respondents protested at the notion of valuation the majority offer positive valuations although typically of a lower value that non protesters

silver bullet or trojan horse the effects of inclusionary zoning on local housing markets in the united states many local governments are adopting inclusionary zoning iz as a means of producing affordable housing without direct public subsidies in this paper panel data on iz in the san francisco metropolitan area and suburban boston are used to analyse how much affordable housing the programmes produce and how iz affects the prices and production of market rate housing the amount of affordable housing produced under iz has been modest and depends primarily on how long iz has been in place results from suburban boston suggest that iz has contributed to increased housing prices and lower rates of production during periods of regional house price appreciation in the san francisco area iz also appears to increase housing prices in times of regional price appreciation but to decrease prices during cooler regional markets there is no evidence of a statistically significant effect of iz on new housing development in the bay area

patients migration across regions the case of italy this article analyses patient mobility across italian regions a modified gravity model of patient migration is specified and estimated using panel observations covering mobility and other main regional quality indicators over the period 1994 1997 despite the high level of aggregation due to data constraints the empirical findings show that in italy there is wide scope for quality driven mobility while income determines the quality of the service offered

short and long term evaluation of efficiency and quality an application to spanish municipalities this article analyses efficiency and quality levels in spanish local governments and their determining factors through the application of the data envelopment analysis methodology it aims to discover to what extent inefficiency arises from both quality considerations and external factors beyond the organization s control or alternatively how much inefficiency is due to inadequate resource management as a component of inadequate resource management we test the existence of political budgetary cycles in the temporal evolution of inefficiencies the results show that on the whole there is still a wide margin within which local government efficiency and quality levels could be increased although it is revealed that a great deal of inefficiency is due to exogenous or noncontrollable factors in particular it has been found that the size of the municipality the per capita tax revenue the per capita grants and the amount of commercial activity are some of the factors related with local government effici

estimating stated preferences with rated pair data environmental health and employment effects of energy programs abstract respondents stated preferences for attributes related to various electricity generation scenarios are analyzed using a series of pairwise ratings multiple observations for each respondent facilitate estimating individual scale parameters scale estimates can identify uninformative rating patterns and make it possible to delete such observations or adjust wtp calculations cross section time series analysis of the data indicates that nonprice attributes increase in salience during the course of the experiment thus later responses may be better indicators of preferences than earlier responses comparisons of polychotomous with dichotomous models indicate that most respondents relative preference ratings are not simply dichotomous but discriminate systematically along the rating scale