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A multilevel modelling approach to triple-bounded dichotomous choice contingent valuation

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  • Ian Langford
  • Ian Bateman
  • Hugh Langford

Abstract

The use of dichotomous choice (DC) questions in the elicitation of willingness to pay (WTP) in contingent valuation studies is common practice at the present time. Recent research has shown that double-bounded DC questions provide statistically superior results to single-bounded questions, given an appropriate sampling design. This paper uses a relatively new multilevel modelling technique to analyze a triple-bounded DC design, which in addition includes an initial non-monetary question on whether an individual accepts, in principle, a WTP some unspecified amount. The theoretical basis of the multilevel model used is described, and some of the possibilities of this potentially powerful and versatile technique are discussed. The practical operation of the multilevel model is demonstrated using data from a contingent valuation study conducted in the Norfolk Broads, England, an internationally important wetland resource. Copyright Kluwer Academic Publishers 1996

Suggested Citation

  • Ian Langford & Ian Bateman & Hugh Langford, 1996. "A multilevel modelling approach to triple-bounded dichotomous choice contingent valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 7(3), pages 197-211, April.
    • Handle: RePEc:kap:enreec:v:7:y:1996:i:3:p:197-211
    DOI: 10.1007/BF00782145
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    References listed on IDEAS

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    1. John W. Duffield & David A. Patterson, 1991. "Inference and Optimal Design for a Welfare Measure in Dichotomous Choice Contingent Valuation," Land Economics, University of Wisconsin Press, vol. 67(2), pages 225-239.
    2. Cooper Joseph C., 1993. "Optimal Bid Selection for Dichotomous Choice Contingent Valuation Surveys," Journal of Environmental Economics and Management, Elsevier, vol. 24(1), pages 25-40, January.
    3. Bishop, Richard C. & Heberlein, Thomas A., 1979. "Measuring Values Of Extramarket Goods: Are Indirect Measures Biased?," 1979 Annual Meeting, July 29-August 1, Pullman, Washington 277818, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Langford, Ian H. & Bateman, Ian J., 1996. "Elicitation and truncation effects in contingent valuation studies," Ecological Economics, Elsevier, vol. 19(3), pages 265-267, December.
    5. Michael Hanemann & John Loomis & Barbara Kanninen, 1991. "Statistical Efficiency of Double-Bounded Dichotomous Choice Contingent Valuation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(4), pages 1255-1263.
    6. Barbara J. Kanninen, 1993. "Optimal Experimental Design for Double-Bounded Dichotomous Choice Contingent Valuation," Land Economics, University of Wisconsin Press, vol. 69(2), pages 138-146.
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    Cited by:

    1. Ian Langford* & Areti Kontogianni & Mihalis Skourtos & Stavros Georgiou & Ian Bateman, 1998. "Multivariate Mixed Models for Open-Ended Contingent Valuation Data: Willingness To Pay For Conservation of Monk Seals," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 12(4), pages 443-456, December.
    2. Bateman, Ian J. & Langford, Ian H. & Jones, Andrew P. & Kerr, Geoffrey N., 2001. "Bound and path effects in double and triple bounded dichotomous choice contingent valuation," Resource and Energy Economics, Elsevier, vol. 23(3), pages 191-213, July.
    3. Seung-Hoon Yoo & Hee-Jong Yang, 2001. "Application of Sample Selection Model to Double-Bounded Dichotomous Choice Contingent Valuation Studies," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 20(2), pages 147-163, October.
    4. Ryan, Mandy & Scott, David A. & Donaldson, Cam, 2004. "Valuing health care using willingness to pay: a comparison of the payment card and dichotomous choice methods," Journal of Health Economics, Elsevier, vol. 23(2), pages 237-258, March.
    5. Wan-Jiun Chen & Jihn-Fa Jan & Chih-Hsin Chung & Shyue-Cherng Liaw, 2022. "Resident Willingness to Pay for Ecosystem Services in Hillside Forests," IJERPH, MDPI, vol. 19(10), pages 1-17, May.
    6. Bateman, Ian J. & Day, Brett H. & Dupont, Diane P. & Georgiou, Stavros, 2006. "Incentive compatibility and procedural invariance testing of the one-and-one-half-bound dichotomous choice elicitation method: distinguishing strategic behaviour from the anchoring heuristic," 2006 Annual meeting, July 23-26, Long Beach, CA 21104, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Jorge E. Araña & Carmelo J. Léon, 2006. "Modelling contingent valuation iterated elicitation data with an MCMC approach," Hacienda Pública Española / Review of Public Economics, IEF, vol. 177(2), pages 83-105, April.
    8. John C. Whitehead & William B. Clifford & Thomas J. Hoban, 2000. "“WTP for Research and Extension Programs: Divergent Validity of Contingent Valuation with Single and Multiple Bound Valuation Questions,”," Working Papers 0002, East Carolina University, Department of Economics.
    9. John C. Whitehead, 2002. "Incentive Incompatibility and Starting-Point Bias in Iterative Valuation Questions," Land Economics, University of Wisconsin Press, vol. 78(2), pages 285-297.
    10. Langford, Ian H. & Bateman, Ian J., 1996. "Elicitation and truncation effects in contingent valuation studies," Ecological Economics, Elsevier, vol. 19(3), pages 265-267, December.
    11. Saayman, Melville & Krugell, Waldo F. & Saayman, Andrea, 2016. "Willingness to pay: Who are the cheap talkers?," Annals of Tourism Research, Elsevier, vol. 56(C), pages 96-111.
    12. John C. Whitehead, 2000. "“Anchoring and Shift in Multiple Bound Contingent Valuation,”," Working Papers 0004, East Carolina University, Department of Economics.
    13. Ricardo Faria & Raul Matsuhita & Jorge Nogueira & Benjamin Tabak, 2007. "Realism Versus Statistical Efficiency: A Note on Contingent Valuation with Follow-up Queries," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 35(4), pages 451-462, December.
    14. Qiu, Richard T.R. & Park, Jinah & Li, ShiNa & Song, Haiyan, 2020. "Social costs of tourism during the COVID-19 pandemic," Annals of Tourism Research, Elsevier, vol. 84(C).
    15. Norman Henderson & Ian Langford, 1998. "Cross-Disciplinary Evidence for Hyperbolic Social Discount Rates," Management Science, INFORMS, vol. 44(11-Part-1), pages 1493-1500, November.
    16. Owusu-Amankwah, Georgette, 2018. "Willingness of Rural and Peri-urban Women Smallholder Farmers to Participate in Home-grown School Feeding Farming Contracts," 2018 Annual Meeting, February 2-6, 2018, Jacksonville, Florida 266714, Southern Agricultural Economics Association.
    17. Muhammed Nazmul Islam & Atonu Rabbani & Malabika Sarker, 2019. "Health shock and preference instability: assessing health-state dependency of willingness-to-pay for corrective eyeglasses," Health Economics Review, Springer, vol. 9(1), pages 1-14, December.
    18. Won Seok Lee, 2020. "A Study on the Value of Preserving a Parasitic Volcanic Sieve as a Tourism Good for Sustainable Management: Using the Contingent Valuation Method," Sustainability, MDPI, vol. 12(7), pages 1-12, April.
    19. Chung, Yi-Shih & Chiou, Yu-Chiun, 2017. "Willingness-to-pay for a bus fare reform: A contingent valuation approach with multiple bound dichotomous choices," Transportation Research Part A: Policy and Practice, Elsevier, vol. 95(C), pages 289-304.
    20. Jorge Araña & Carmelo León, 2007. "Repeated Dichotomous Choice Formats for Elicitation of Willingness to Pay: Simultaneous Estimation and Anchoring Effect," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 36(4), pages 475-497, April.
    21. Yan Meng & Philip M. Clarke & Ilias Goranitis, 2022. "The Value of Genomic Testing: A Contingent Valuation Across Six Child- and Adult-Onset Genetic Conditions," PharmacoEconomics, Springer, vol. 40(2), pages 215-223, February.
    22. Araña, Jorge E. & León, Carmelo J., 2008. "Do emotions matter? Coherent preferences under anchoring and emotional effects," Ecological Economics, Elsevier, vol. 66(4), pages 700-711, July.

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