correcting for the endogeneity of pro environment behavioral choices in contingent valuation abstract in contingent valuation studies observed behavioral choices often enter as independent variables in the willingness to pay function however these variables may be endogenously determined when the error term in the behavioral model is correlated with the error term in the willingness to pay model we investigate the effects of correcting for the endogeneity of a variable namely membership status in environmental organizations that proxies unobservable characteristics of the respondents jointly modeling the membership variable and the willingness to pay response yields an estimate for the effect of the former that contradicts previous findings but is intuitive and agrees with theoretical expectations

arbitrary values good causes and premature verdicts abstract this paper offers an alternative interpretation of the conclusions kahneman and knetsch propose based on two contingent valuation cvm surveys the evaluation argues that while framing is important to cvm estimates the design implementation and empirical findings reported from these surveys do not support their judgments moreover with the exception of temporal embedding conventional economic descriptions of individual behavior can explain the response patterns that they suggest are at variance with standard value theory

the effect of within season variability on estimates of recreational value for trout anglers in new zealand abstract recreational benefit estimates can be substantially improved by incorporation of data on attributes that are averaged over shorter periods of time so as to better represent within season variability this approach may be advantageous across a wide range of non market valuation settings we use angling survey data that includes bimonthly data on angler demand water quality and fish weight in the rotorua lakes and compare our results with those obtained using attribute data averaged over the year estimates of marginal willingness to pay for catching fish based on annual data are 5 times higher than those based on bimonthly data likewise the estimated welfare gain from a 1 m increase in water clarity is 1 5 times higher in models using annual data we find that within season variability in recreational site attributes can have a statistically significant effect on welfare estimates the effect of seasonal variation in site attributes has rarely been accounted for in travel cost random utility models of recreation we conclude that appropriate treatment of temporal variability can assist environmental managers to design more cost effective policies based on improved estimates of welfare gains

testing for non response and sample selection bias in contingent valuation analysis of a combination phone mail survey we use a combination phone mail survey to test for possible sample biases in contingent valuation we find no sample selection bias but do find non response bias we show how failure to correct for non response bias distorts aggregate benefit estimates

valuing option existence and bequest demands for wilderness to assess the relative importance of current costs and future benefits of nuclear waste storage we develop a simple model of bequest value the basic model of nonparternalistic altruism is extended to account for the uncertain nature of the externality

a combinatorial optimization approach to nonmarket environmental benefit aggregation via simulated populations this paper considers the use of a combinatorial optimization technique in the aggregation of environmental benefit values combinatorial optimization is used to statistically match population census data to a contingent valuation survey the matched survey and census information is then used to produce regional and national total willingness to pay figures these figures are then compared to figures derived using more standard approaches to calculating aggregate environment benefit values the choice of aggregation approach is shown to have a major impact upon estimates of total benefits at a regional level especially when the target population displays considerable heterogeneity across space

estimating willingness to pay for improved water quality in the presence of item nonresponse bias this article deals with the problem of item nonresponse in contingent valuation surveys using a payment card method by applying a grouped data sample selection estimation technique that is capable of imputing the missing values conditional upon a respondent s decision to answer a willingness to pay question the advantage of the technique lies in its ability to utilize all of the information in the sample permitting a more efficient estimation in the presence of item nonresponse bias the major determinants of willingness to pay appear to be household income number of children education perception of existing water quality and identification with environmental issues copyright 2003 oxford university press

real and nominal wage rigidities and the rate of inflation evidence from west german micro data the paper examines real and nominal wage rigidities we estimate a switching regime model in which the observed distribution of individual wage changes computed from west german register data for 1976 1997 is generated by simultaneous processes of real nominal or no wage rigidity and measurement error the fraction of workers facing wage increases that are due to nominal but mostly real wage rigidity is substantial the extent of real rigidity rises with inflation whereas the opposite holds for nominal rigidity overall the incidence of wage rigidity which accelerates unemployment growth is most likely minimized in an environment with moderate inflation

hedonic theory bid rents and willingness to pay some extensions of ellickson s results abstract an alternative to ellickson s multinomial logit model of household bids for dwelling units is derived by making use of observable information on the price paid by the winning bidder the alternative specification makes it possible to estimate willingness to pay for housing attributes which cannot be obtained from ellickson s model some methodological issues arising from ellickson s method of grouping households are also examined

estimating interest rate setting behaviour in korea a constrained ordered choices model approach abstractwe study the bank of korea s interest rate setting behaviour using an array of constrained ordered choices models where the monetary policy committee revises the target policy interest rate only when the current market interest rate deviates from the optimal rate by more than certain threshold values our models explain changes in the monetary policy stance well for the monthly frequency korean data since january 2000 we find important roles for the output gap and the foreign exchange rate in understanding the bank of korea s rate decision making process we also implement out of sample forecast exercises with september 2008 lehman brothers bankruptcy for a split point we demonstrate that out of sample predictability improves greatly for the rate cut and the rate hike decisions using se adjusted inaction bands

valuing non market goods using contingent valuation abstract contingent valuation is a technique being developed by economists for the valuation of environmental commodities not traded in markets this paper discusses the major problem areas associated with this method of value estimation these comprise bias strategic hypothetical and design biases the discrepancy between willingness to pay and compensation demanded the aggregation procedure the choice of question format and non use values some evidence from comparative studies is reported and comments made on the accuracy of contingent valuation answers finally the conditions under which contingent valuation seems to operate best are set out

accounting for the impact of agriculture and forestry on environmental quality abstract a framework for modifying sectoral accounts for environmental externalities is assembled as a basis for estimating the national income accounts for u k agriculture and forestry valuation of positive and negative environmental impacts draws on revealed and expressed preference evaluations the approach taken seeks to modify the national accounts for agriculture and forestry by first assessing the physical significance of the relevant externalities in terms of land use designations and physical pollutants and then valuing them using existing studies

application of sample selection model to double bounded dichotomous choice contingent valuation studies modeling households behavior with the data from a contingentvaluation cv survey is often complicated by samplenon response which can cause non response bias and sampleselection bias leading to inconsistent parameter estimates and adistorted mean willingness to pay estimate this paper reportsthe results of empirical tests for both biases using householdsurvey data in which the double bounded dichotomous choice cvquestion involved the benefit of a tap water quality improvementpolicy in korea no non response bias but sample selection bias is detected in the sample to correct for sample selection bias a sample selection model is employed the authors also discusshow failure to correct for bias may distort aggregate benefitestimates

using factor analysis to identify consumer preferences for the protection of a natural area in portugal abstract this paper focuses on the application of factor analysis so as to identify consumer preferences for the protection of a natural area we combine the use of factor analysis with the valuation data obtained by contingent valuation survey the survey conducted via in person questionnaires in 1997 is targeted at the economic valuation of the protection benefits of the parque natural alentejano e costa vicentina a natural protected area along the southwest coastline of portugal factor analysis results show that the consumer is characterized by a three factor motivational structure use warm glow and non use motivation factor respectively we introduce these motivation factors together with the respondent s socio economic characteristics in the economic valuation function of such natural protected area estimation results show that consumer motivation factors have an econometrically robust role therefore consumer motivations are interpreted as crucial information for accurate social cost benefit analysis of alternative protection scenarios and thus serve as an important cornerstone in designing an effective and broadly accepted management policy for the parque natural alentejano e costa vicentina

euthanizing value of a statistical life monetizing differences in public perception and alternatives abstractthere is some controversy associated with the language describing monetary values for changes in health or mortality risks especially the term value of a statistical life vsl we investigate if the general public distinguishes differences in language describing the concept of vsl using four different descriptive treatments based on a survey of willingness to accept wta in which individuals receive payment to participate in a future study results show that the general public does not perceive a difference in the language used to describe changes in risks this suggests that public objections to the vsl may not be caused by the specific description used nor can be ameliorated by refinement further the results alleviate concern that language chosen may affect respondent participation and welfare estimates because of its apparent absence in the literature we also adapt and demonstrate a non parametric conservative estimate of wta

specification of the logit model the case of valuation of nonmarket goods abstract we address the proper specification of the logit model for estimation of nonmarket commodity demand economic theory is used to show the conditions which must be met by the logit functional form if it is to yield valid estimates of welfare change measures and demand relationships an empirical example is used to illustrate the argument recreational boating data were collected using the contingent valuation method cvm in texas in one instance the demand curve is positively sloped due to the specific functional form chosen the estimated demand curve for the theoretically preferred functional form has the expected negative slope

the worth of a possum valuing species with the contingent valuation method the focus of this paper is on methods of assessing the value peopleplace on the conservation of species for use in policy making of principalinterest is the relatively new methodology of contingent valuation whichis a method for asking people directly about their preferences the paperpresents an application of the contingent valuation method to theconservation of an endangered species in the state of victoria australia the results emphasise the importance of careful survey design implementation and analysis as well as the precise definition of theenvironmental good being valued consequently the contingent valuationmethod does provide information relevant to decision making processesbased on monetary economic considerations thus in orthodox economicterms it makes sense to conserve species but there are other moral andethical grounds for conserving species as well

generalized additive models for nonmarket valuation via revealed or stated preference methods single site recreation demand and dichotomous choice contingent valuation analyses are typically conducted by implementing models containing strong parametric assumptions which are rarely underpinned by theoretical arguments this work illustrates how these assumptions can be relaxed and the estimation conducted semiparametrically by using generalized additive models gams this approach directly estimates the degree of the variables nonlinearities from the data thereby avoiding subjective choices on the smoothing parameters and offering many advantages when compared to the conventional modeling techniques that dominate the environmental economics literature additionally this paper illustrates how gams can be specified to construct theoretically consistent willingness to pay measures jel c14 q51

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

heterogeneous preferences and aggregation in environmental policy analysis a landfill siting case in many studies of nonmarket resources economists have data to disaggregate results according to subpopulations within the full study population disaggregated results can increase the usefulness of economic analyses improve public confidence in the results and permit public officials to assess equity concerns we outline an approach to obtain disaggregated results when characteristics of individuals may identify distinct preferences the approach is applied to public preferences regarding landfill siting decisions the discussion explores the implications of disaggregated results for policy decisions for bias in aggregate willingness to pay estimates and for nonmarket research methodologies

understanding the consequences of consequentiality testing the validity of stated preferences in the field this study pursues the external validation of stated preference methods by comparing survey responses from verified voters with the outcome of a parallel public referendum on a conservation and preservation program to be funded by a local property tax surcharge the majority of respondents were unaware of the upcoming referendum and the experimental design allows us to control for referenda related information effects as well as respondents perceptions regarding the consequentiality i e the potential policy impact of their survey votes we find the survey under predicts yes referendum votes at the precinct level these differences go away however if we focus only on respondents who perceived their survey vote to be consequential negative hypothetical bias among inconsequential survey respondents is also evident in the estimation of willingness to pay and controlling for consequentiality increases construct validity

the consequences of rigid wages in search models the standard theory of equilibrium unemployment the mortensen pissarides search and matching model cannot explain the magnitude of the business cycle fluctuations in two of its central elements unemployment and vacancies modifying the model to make the present value of wages unresponsive to current labor market conditions amplifies fluctuations in unemployment and vacancies by an order of magnitude significantly improving the performance of the model despite this the welfare consequences of such rigid wages is negligible jel e24 e32 j30 j41 j63 j64

wage adjustment in the great recession and other downturns evidence from the united states and great britain using 1979 2012 cps data for the united states and 1975 2012 nes data for great britain we study wage behavior in both countries with particular attention to the great recession real wages are procyclical in both countries but the procyclicality of real wages varies across recessions and does so differently between the two countries in ways that defy simple explanations we devote particular attention to the hypothesis that downward nominal wage rigidity plays an important role in cyclical employment and unemployment fluctuations we conclude that downward wage rigidity may be less binding and have lesser allocative consequences than is often supposed

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

stop go monetary policy we propose and estimate several discrete choice models of monetary policy decision making that feature time varying inertia the models permit us to account for three stylized facts characterizing monetary policymaking in the united states 1 target interest rates are gradually adjusted in small discrete movements 2 there are some long stretches of time in which rates are repeatedly moved and 3 there are other long stretches in which the policy rate does not change our models are used to account for the fed s failure to adopt promptly an easier policy stance during the recession of 2001 they are also used to explain delay in tightening the policy stance during the 2003 2006 period that featured a bubble in house prices and was followed by a financial crisis in 2008

valuing non market wildlife commodities an evaluation and comparison of benefits and costs this paper compares the benefits and costs of nature conversation at three sites of special scientific interest benefits are estimated by contigent valuation expressed preferences and also the travel cost method revealed preferences oppurtunity costs are assessed from a financial cost viewpoint and also in terms of shadow prices or social costs results indicate that the valuation of wildlife and nature conservation largely depends upon the frame of reference adopted that social costs are considerably less than financial costs due to the effect of the common agricultural policy that user benefits are considerably less than financial costs and non user benefits must be included to cover even the social costs of nature conservation

reliability and predictive validity of contingent values does the nature of the good matter abstract because the contingent valuation mechanism cvm elicits verbal reports of maximum willingness to pay and not actual willingness to pay analysts have expressed doubts about the reliability and validity of contingent values for commodities such as environmental amenities this skepticism is usually attributed to the amorphous nature of the commodity and to peoples lack of familiarity or experience however our comparison of two commodities which lie at polar extremes of the private good public good continuum suggests that the nature of the good may have little influence on the reliability and predictive validity of the cvm instead aspects of the cvm itself e g explicit payment obligation may be more important for high intention behavior consistency

misplaced childhood when recession children grow up as central bankers abstract we examine how much an early i e childhood experience of recession influences the behavior of central bankers we develop a model of decision making by a committee whose leader and members exhibit recession aversion due to their personal experience the model reveals that recession aversion could lead to a reluctance of the policymaker to increase policy rates in a panel multinomial logit model for nine major central banks analyzed over the period 1999 2015 we find that growing up in a recession influences monetary policy making central bankers early personal experiences of recessions shape their policy reactions increasing the willingness to cut policy rates with policy relevant magnitudes the results are robust to alternative behavioral hypotheses accounting for a number of control variables or sample variation

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

how prevalent is downward rigidity in nominal wages international evidence from payroll records and pay slips in chapter 2 of the general theory of employment interest and money 1936 john maynard keynes put forward an assumption of downward rigidity in nominal wages as the cornerstone of his analysis of what happens in the labor market over the business cycle according to his analysis if the real value of the existing nominal wage exceeds the market clearing level downward nominal rigidity prevents arbitrage towards that level instead employment is determined by the short side of the market the labor demand side and the excess supply of labor at that wage manifests as high unemployment keynes s brief theoretical account of why workers refuse to accept a nominal wage reduction even when unemployment is the consequence involved workers concern about their wages relative to their reference group keynes did not directly address why workers would be so preoccupied with their relative wage that they would prefer job loss even during a recession to accepting a wage cut keynes s empirical basis for his assumption was that whether logical or illogical experience shows that this is how labour in fact behaves he did not provide any quantitative evidence to support this observation

dynamics of the federal funds target rate a nonstationary discrete choice approach we apply a discrete choice approach to model the empirical behaviour of the federal reserve in changing the federal funds target rate the benchmark of short term market interest rates in the us our methods allow the explanatory variables to be nonstationary as well as stationary this feature is particularly useful in the present application as many economic fundamentals that are monitored by the fed and are believed to affect decisions to adjust interest rate targets display some nonstationarity over time the chosen model successfully predicts the majority of the target rate changes during the time period considered 1994 2001 and helps to explain strings of similar intervention decisions by the fed based on the model implied optimal interest rate our findings suggest that there is a lag in the fed s reaction to economic shocks during this period copyright 2004 john wiley sons ltd

nominal wage rigidities in mexico evidence from social security records abstract this paper analyzes the existence and extent of downward nominal wage rigidities in the mexican labor market using data from the administrative records of the mexican social security institute imss this establishment level panel dataset allows us to track workers employed with the same firm observe their wage profiles and calculate the nominal wage changes they experience over time based on the estimated density functions of nominal wage changes we are able to calculate some standard tests of nominal wage rigidity that have been proposed in the literature furthermore we extend these tests to take into account the presence of minimum wage laws that may affect the distribution of nominal wage changes the densities and tests calculated using these data are similar to those obtained using administrative data from other countries and constitute a significant improvement over the measures of nominal wage rigidities obtained from household survey data we document the importance of minimum wages in the mexican labor market as evidenced by the large fraction of minimum wage earners and the indexation of wage changes to the minimum wage increases we find considerably more nominal wage rigidity than previous estimates obtained for mexico using data from the national urban employment survey eneu suggest but lower than that reported for developed countries by other studies that use comparable data

measuring heterogeneous preferences for preserving farmland and open space abstract public preferences for environmental policies often vary among individual citizens according to their socio economic characteristics and attitudes toward environmental programs most researchers account for socio economic characteristics when conducting public preference surveys but do not account for differences in preferences that transcend socio economic categories identifying the public s attitudes regarding environmental programs and the role they play in shaping individuals preferences for policy alternatives can assist policy makers in developing programs that are consistent with public expectations this paper uses factor analysis and a discrete choice model to describe differences in public preferences that result from different attitudes regarding the goals of programs designed to preserve farmland and open space results describe policy implications that are not apparent when using models that address socio economic characteristics alone

valuing riverside wetlands the case of the donau auen national park abstract for two decades the establishment of the donau auen national park east of vienna has been on the political agenda in austria since 1991 concrete proposals have been worked out for several variants of a national park including hydraulic engineering concepts and hydroelectric power stations within this planning process a cost benefit analysis was carried out to estimate the economic impacts of the proposed projects one crucial question was how to value the ecological quality of wetlands these environmental goods were valued by means of a willingness to pay wtp survey two different kinds of variables were defined 1 costs and benefits depending on direct anthropocentric use including energy production with hydroelectric power stations shipping groundwater protection stabilisation of the river bed to stop channel erosion visitors benefits forestry farming fishing hunting and the costs of establishing a national park based on these variables the net present value for variants with hydroelectric power stations is higher than for variants without electricity production on the contrary the internal interest rate and the benefit cost ratio is higher for a pure national park without electricity production 2 taking also the austrians wtp for the donau auen national park as a substitute measure for ecological values into account only 20 percent of the wtp which was measured by means of contingent valuation is needed to make the net present value of the best national park variant equal to that of the best hydroelectric power variant this shows that the protection of natural goods like wetlands in a natural state might be more efficient from an economic viewpoint than development projects

the trade off between money and travel time a test of the theory of reference dependent preferences we formulate a model of reference dependent preferences based on the marginal rate of substitution at the reference point of a reference free utility function using binary choices on the trade off between money and travel time reference dependence is captured by value functions that are centered at the reference the model predicts a directly testable relationship among four commonly used valuation measures willingness to pay wtp willingness to accept wta equivalent gain eg and equivalent loss el moreover we show that the model allows recovering the underlying reference free value of time based on a large survey data set we estimate an econometric version of the model allowing for both observed and unobserved heterogeneity in a series of tests of high statistical power we find that the relationship among the four valuation measures conforms to our model and that the constraints on the parameters implied by the model are met the gap between wtp and wta is found to be a factor of four loss aversion plays an important role in explaining responses moreover participants are more loss averse in the time dimension than the cost dimension we further find evidence of asymmetrically diminishing sensitivity finally we show that the fraction of mistakes in the sense that participants are observed to sometimes select dominated options varies systematically in a way consistent with the model of reference dependence the results of the paper have important implications for the evaluation of infrastructure investment and pricing reforms in the transport sector

a model for the federal funds rate target this paper is a statistical analysis of the manner in which the federal reserve determines the level of the federal funds rate target one of the most publicized and anticipated economic indicators in the financial world the paper introduces new statistical tools for forecasting a discrete valued time series such as the target and suggests that these methods in conjunction with a focus on the institutional details of how the target is determined can significantly improve on standard vector autoregression forecasts of the effective federal funds rate we further show that the news that the fed has changed the target has statistical content substantially different from the news that the fed failed to make an anticipated target change causing us to challenge some of the conclusions drawn from standard linear var impulse response functions

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

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

valuing public goods a comparison of survey and hedonic approaches although the theory of public goods has progressed rapidly since paul samuelson s seminal article the empirical measurement of the value of demand for public goods only recently has received increased attention perhaps the best known and most widely accepted empirical approach has been the use of hedonic prices wherein for example it is assumed that either wages or housing values reflect spatial variation in public good characteristics of different communities this indirect approach based on theoretical work of charles tiebout kelvin lancaster sherwin rosen and others has proven quite successful among public goods or bads which have been valued using the hedonic approach are climate i hoch air pollution robert anderson and thomas crocker d harrison and d rubinfeld social infrastructure r cummings et al and other community characteristics such as noise level j nelson and ethnic composition ann schnare an alternative approach is to directly ask households or individuals to state their willingness to pay for public goods using survey techniques despite arguments that strategic bias will invalidate survey results there exists the need for an alternative to the hedonic approach as an example consider the case of a remote and unique scenic vista valuable to recreators which is threatened by air pollution from a proposed coal fired plant a typical situation in the western united states although it is possible in principle to impute the value of clean air and visibility from the relative decline in local visitation which might follow construction of a power plant information on the value of visibility at the site is needed prior to construction for socially optimal decision making on plant location and pollution control equipment the hedonic approach is unavailable both because the scarcity of local population as opposed to recreators makes use of wage or property value data impossible and because scenic vistas may themselves be unique for these reasons a randall et al first applied survey methods for valuing visibility and other environmental effects of large coal fired power plants in the four corners region of new mexico since this initial application the survey approach has been widely used to value environmental commodities where market data for hedonic analysis is difficult to acquire see for example brookshire ives and schulze rowe et al brookshire et al other early attempts to value public goods using the survey approach include r davis peter bohm and j hammack and g brown although results of using the survey approach for estimating the value of public goods appear to be internally consistent replicable and consistent with demand theory see schulze et al little work on external validation has been reported thus the purpose of this paper is to report on an experiment designed to validate the survey approach by direct comparison to a hedonic property value study the los angeles metropolitan area was chosen for the experiment because of the well defined air pollution problem and be assistant professor university of wyoming assistant professor university of missouri rolla associate professor university of wyoming and professor university of wyoming respectively the research reported here was funded under a grant methods development for assessing air pollution control benefits from the u s environmental protection agency we would like to give special thanks to alan carlin and shelby gerking for their helpful suggestions and contributions additional helpful comments were received from a myrick freeman iii john tschirhart and james murdoch all conclusions are of course our sole responsibility

popular support for climate change mitigation evidence from a general population mail survey using a sample of 1 651 us households we explore some determinants of willingness to pay wtp for climate change mitigation programs our mail survey had a relatively low response rate so we first use several additional data sources to build a detailed sample selection model this model uses features of the survey instrument measures of geographic vulnerability to climate change seasonality the political mix in the county attributes of the address or addressee and a set of factor scores from an extensive factor analysis of all census tracts in the us we estimate this model jointly with a model to explain climate policy preferences as a function of the domestic and international distribution of policy costs as well as the climate change impacts that each respondent believes will occur under a policy of business as usual despite statistically significant patterns of nonresponse selectivity effects are minimal in this case wtp for climate change mitigation is greater when the domestic incidence of mitigation costs is borne mostly through higher energy taxes it is also greater when costs are understood to be shared internationally with other groups of countries rather than being borne mostly by a country group including the us people are generally more willing to pay for climate change mitigation if they believe that the harm caused by climate change impacts will be substantial rather than just moderate

survey response related biases in contingent valuation concepts remedies and empirical application to valuing aquatic plant management s mple nonresponse and selection biases that may occur in survey research such as contingent valu tion applications are discussed and tested correction mechanisms for these types of biases are d monstrated results indicate the importance of testing and correcting for unit and item nonresp nse bias in contingent valuation survey data when sample nonresponse and selection bias go u

the willingness to pay by households for improved reliability of electricity service in north cyprus abstract this research examines households willingness to pay wtp for an improved electricity service households wtp is estimated using the payment ladder contingent valuation cv data from 350 in person interviews in north cyprus in order to avoid the cost of outages households are willing to incur a 13 8 increase in their monthly electricity bill a cost benefit analysis cba indicates that the annualized economic benefits of improved reliability of the electricity service would be approximately usd 35 6 million for the residential sector this figure is more than enough to finance the investments needed to completely eradicate any electricity outages in addition the fuel savings from substituting the generation of the new plants for the old plants would yield about usd 32 9 million per year in fuel savings hence a change from the current low reliability policy to one of providing a high quality service would yield an economic net present value to the residents of north cyprus of twice the investment costs or usd 173 3 million within five years

modeling shifts in willingness to pay from a bayesian updating perspective this paper derives a structural shift empirical specification for a double bound dichotomous choice contingent valuation methodology premised upon willingness to pay wtp shifts ensuing from a representative model of respondent bayesian updating behavior we demonstrate by way of data simulations that a traditional structural shift specification may often fail at estimating true wtp in this context further simulations demonstrate that a simple extension of the traditional structural shift model derived explicitly from our bayesian framework can correct for much of the wtp bias with an empirical application confirming the simulation outcomes finally we investigate the relationship between strategic behavior and wtp shifts

expanding contingent value sample estimates to aggregate benefit estimates current practices and proposed solutions a mail survey was administered to a panel of colorado consumers to obtain estimates of willingness to pay wtp for preserving union park detailed socioeconomic data for all surveyed individuals was available a priori we develop and employ the multiple

a deep recession came with deep wage cuts abstract while economists historically have considered wages rigid downwards recent studies have shown that cuts in nominal wages are more common than previously thought the deep recession experienced in iceland in 2008 coupled with iceland s flexible labor market provided an extreme example of a labor market that experienced widespread and deep cuts in nominal wages data covering two fifths of the labor market showed that 80 of employees experienced a nominal cut in regular hourly wages between 2008 and 2010 the data was collected directly from organizations and excluded the effects of a change in hours worked nominal hourly wages for full time work were cut by 9 3 on average at the same time inflation measured 18

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

the valuation of the ijmeer nature reserve using conjoint analysis this paper describes an application of conjointanalysis the subject of the valuation study isthe ijmeer nature reserve which will be partlydestroyed when the new residential area ijburgis built this paper addresses the followingquestion what is the extent of the loss ofgreen and recreational values in this study the conjoint analysis consists of threedifferent analyses based on a three piecevaluation question the respondents are askedto subsequently rank mark and indicate theacceptability of a set of six cards

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

going home evacuation migration decisions of hurricane katrina survivors in the wake of hurricane katrina many evacuees from the gulf region began the difficult process of deciding whether to rebuild or restart elsewhere we examine pre katrina gulf residents decision to return to the postdisaster gulf region which we call the return migration decision we estimate two separate return migration models first using data from a mail survey of individuals in the affected region and then focusing on self administered questionnaires of evacuees in houston our results indicate that return migration can be affected by household income age education level and employment marital and home ownership status but the results depend on the population under consideration we find no effect of connection to place on the return migration decision although the effect of income is relatively small within subsamples we find a much higher proportion of middle income households planning to return than lower income households when comparing across the subsamples in addition the real wage differential between home and host region influences the likelihood of return larger implicit costs in terms of foregone wages for returning induce a lower likelihood of return exploiting this difference at the individual level we are able to produce estimates of willingness to pay wtp to return home average wtp to return home for a sample of relatively poor households is estimated at 1 94 per hour or 3954 per year

retail competition in electricity supply survey results in north carolina residential retail competition in electricity supply was introduced in many countries and some us states as part of electricity industry deregulation following problems in the electricity market in california in 2000 2001 many us states including north carolina suspended their deregulation agenda recent technological advances have made competition more viable so we ask if nc should reconsider deregulation and retail competition the welfare benefits will depend on consumers willingness to switch suppliers and the potential for value added innovations in electricity and industries such as pay tv and telecommunications consumers are sticky remaining with their current supplier even though rivals offer savings moreover some analysts question the likelihood of significant welfare improvements from retail competition we survey residents in two nc counties focusing on i households knowledge of and interest in retail competition ii factors that would encourage them to switch suppliers and iii the required savings to encourage switching about 50 65 of respondents would favor retail competition in nc demographic variables and experience switching in other industries affect opinions and the savings required to incent switching we conclude the estimated rate reduction to encourage competitive switching will be hard to achieve in nc as long as rates remain below the national average

protesting and justifying a latent class model for contingent valuation with attitudinal data this article develops a latent class model for estimating willingness to pay wtp for public goods using simultaneously contingent valuation cv and attitudinal data to identify individuals with similar characteristics such as wtp and protest attitudes we find evidence that the answer to the cv question influences the responses to the attitudinal questions in our case this influence reflects rational behavior budget constraint issues and justification biases related to protest reasons such as lack of trust in institutions or fairness issues with respect to the distribution of the burden of preservation the results from our empirical application confirm the importance of accounting for those biases

pecuniary externalities in economies with downward wage rigidity abstract a pecuniary externality in economies with downward nominal wage rigidity leads firms to hire too many workers in expansions which leads to too much unemployment in recessions when firms hire more workers firms fail to internalize that competition for workers between firms pushes up the aggregate wage which imposes a negative externality over other firms the externality can be resolved by a macroprudential tax on labor in expansions in the calibrated model the tax reduces the welfare cost of downward nominal wage rigidity by up to 90 as it makes the economy significantly less exposed to unemployment crises

rural amenity values and length of residency new residents of rural communities are often assumed to have preferences for development and conservation that differ from those of longer term residents however the literature offers little to quantify presumed preference heterogeneity this article assesses whether stated preferences differ according to length of residency results are based on a conjoint choice experiment survey of rhode island rural residents heterogeneity according to length of town residency is modeled using dummy variables multiplicative interactions and lagrangian interpolation polynomials results are compared across the three models and identify a range of attributes for which willingness to pay depends on length of residency