Willingness-to-pay estimates using the double-bounded dichotomous-choice contingent valuation format: A test for validity and precision in a Bayesianframework
Dm. Mcleod et O. Bergland, Willingness-to-pay estimates using the double-bounded dichotomous-choice contingent valuation format: A test for validity and precision in a Bayesianframework, LAND ECON, 75(1), 1999, pp. 115-125
The Double-Bounded Dichotomous-Choice (DB-DC) Contingent Valuation format i
s thought to yield more precise welfare estimates. Questions remain about i
ts validity. The initial bid may represent information with which responden
ts update their willingness to pay. A Bayesian model of respondent decision
making is estimated for two data sets. The results indicate updating or sh
ifts in respondent willingness to pay between iterated valuations. Nonparam
etric resting of the welfare estimates reveals that the model incorporating
updating yields different values fram the standard model The expected incr
eases in the precision of the DB-DC welfare estimates are lost when updatin
g occurs. (JEL Q26).