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Procedural Invariance Testing of the One-and-One-Half-Bound Dichotomous Choice Elicitation Method

Author

Listed:
  • Ian J. Bateman

    (Centre for Social and Economic Research on the Global Environment)

  • Brett H. Day

    (Centre for Social and Economic Research on the Global Environment)

  • Diane P. Dupont

    (Brock University, Canada)

  • Stavros Georgiou

    (Economic Analysis Unit, Health and Safety Executive, London)

Abstract

The contingent valuation method for estimating willingness to pay for public goods typically adopts a single referendum question format, which is relatively statistically inefficient. As an alternative, Cooper, Hanemann, and Signorello (2002) propose the one-and-one-half bound (OOHB) format, allowing researchers to question respondents about both a lower and higher limit on project costs, thereby securing substantial gains in statistical efficiency. Using an experimental design, we find that responses to OOHB valuation questions fail crucial tests of procedural invariance. We test various competing models of observed response patterns including strategic misrepresentation of standard preferences and nonstandard models of preference formation. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Ian J. Bateman & Brett H. Day & Diane P. Dupont & Stavros Georgiou, 2009. "Procedural Invariance Testing of the One-and-One-Half-Bound Dichotomous Choice Elicitation Method," The Review of Economics and Statistics, MIT Press, vol. 91(4), pages 806-820, November.
    • Handle: RePEc:tpr:restat:v:91:y:2009:i:4:p:806-820
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    Cited by:

    1. Park, Seong-Ju & Kim, Ju-Hee & Yoo, Seung-Hoon, 2023. "Utilization of early retiring coal-fired power plants as a cold reserve in South Korea: A public perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 173(C).
    2. Olivier Chanel & Khaled Makhloufi & Mohammad Abu-Zaineh, 2017. "Can a Circular Payment Card Format Effectively Elicit Preferences? Evidence From a Survey on a Mandatory Health Insurance Scheme in Tunisia," Applied Health Economics and Health Policy, Springer, vol. 15(3), pages 385-398, June.
    3. Tiziana Luisetti & Ian J. Bateman & R. Kerry Turner, 2011. "Testing the Fundamental Assumption of Choice Experiments: Are Values Absolute or Relative?," Land Economics, University of Wisconsin Press, vol. 87(2), pages 284-296.
    4. Kim, Ju-Hee & Lim, Seul-Ye & Yoo, Seung-Hoon, 2021. "Public preferences for introducing a power-to-heat system in South Korea," Renewable and Sustainable Energy Reviews, Elsevier, vol. 151(C).
    5. Qiying Ding & Shoufu Lin & Shanyong Wang, 2022. "Determinants and Willingness to Pay for Purchasing Mask against COVID-19: A Protection Motivation Theory Perspective," IJERPH, MDPI, vol. 19(7), pages 1-15, April.
    6. So-Yeon Park & Ju-Hee Kim & Jungkwan Seo & Seung-Hoon Yoo, 2022. "Evaluating the Economic Benefits of Tightening Regulations on the Use of Toluene, a Hazardous Chemical, in South Korea," Sustainability, MDPI, vol. 14(11), pages 1-15, May.
    7. Jiang, Yi & Jin, Leshan & Lin, Tun, 2011. "Higher water tariffs for less river pollution--Evidence from the Min River and Fuzhou City in China," China Economic Review, Elsevier, vol. 22(2), pages 183-195, June.
    8. Felipe Vásquez & Walter Gómez & Hugo Salgado & Carlos Chávez, 2013. "Using Stated Preference Methods to Design Cost-Effective Subsidy Programs to Induce Technology Adoption. An Application to a Stove Program in Southern Chile," Past Working Papers 12, Universidad del Desarrollo, School of Business and Economics, revised 2015.
    9. Kim, Hyo-Jin & Lee, Hye-Jeong & Yoo, Seung-Hoon, 2018. "Are South Korean people willing to pay for official development assistance for building renewable power plants in developing countries?," Energy Policy, Elsevier, vol. 118(C), pages 626-632.
    10. I. Bateman & R. Brouwer & S. Ferrini & M. Schaafsma & D. Barton & A. Dubgaard & B. Hasler & S. Hime & I. Liekens & S. Navrud & L. De Nocker & R. Ščeponavičiūtė & D. Semėnienė, 2011. "Making Benefit Transfers Work: Deriving and Testing Principles for Value Transfers for Similar and Dissimilar Sites Using a Case Study of the Non-Market Benefits of Water Quality Improvements Across E," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 50(3), pages 365-387, November.
    11. Robert J. Johnston & Kevin J. Boyle & Wiktor (Vic) Adamowicz & Jeff Bennett & Roy Brouwer & Trudy Ann Cameron & W. Michael Hanemann & Nick Hanley & Mandy Ryan & Riccardo Scarpa & Roger Tourangeau & Ch, 2017. "Contemporary Guidance for Stated Preference Studies," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(2), pages 319-405.
    12. Ju-Hee Kim & Seul-Ye Lim & Seung-Hoon Yoo, 2022. "A Price Premium for the District Heating System: An Empirical Investigation on South Korean Residents," Sustainability, MDPI, vol. 14(12), pages 1-10, June.
    13. Dupont, Diane P. & Bateman, Ian J., 2012. "Political affiliation and willingness to pay: An examination of the nature of benefits and means of provision," Ecological Economics, Elsevier, vol. 75(C), pages 43-51.
    14. Richard Carson & Jordan Louviere, 2011. "A Common Nomenclature for Stated Preference Elicitation Approaches," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 49(4), pages 539-559, August.
    15. Ian Bateman & Georgina Mace & Carlo Fezzi & Giles Atkinson & Kerry Turner, 2011. "Economic Analysis for Ecosystem Service Assessments," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 48(2), pages 177-218, February.
    16. Min-Ki Hyun & Jungho Nam & Seung-Hoon Yoo, 2024. "Public Willingness to Pay for Interstate Cooperation to Preserve the Ecological Integrity of the Han River Estuary in Korea," Sustainability, MDPI, vol. 16(9), pages 1-17, April.
    17. Ju-Hee Kim & Min-Ki Hyun & Seung-Hoon Yoo, 2023. "Households’ Willingness to Pay for Interactive Charging Stations for Vehicle to Grid System in South Korea," Sustainability, MDPI, vol. 15(15), pages 1-13, July.
    18. Roberto Ponce & Felipe Vásquez & Alejandra Stehr & Patrick Debels & Carlos Orihuela, 2011. "Estimating the Economic Value of Landscape Losses Due to Flooding by Hydropower Plants in the Chilean Patagonia," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 25(10), pages 2449-2466, August.
    19. Wang, Xi & Curtis, Kynda R. & Moeltner, Klaus, 2011. "Modeling the Impact of New Information on Consumer Preferences for Specialty Meat Products," 2011 Conference (55th), February 8-11, 2011, Melbourne, Australia 100540, Australian Agricultural and Resource Economics Society.
    20. Massimo Filippini & Adán L. Martínez-Cruz, 2016. "Impact of environmental and social attitudes, and family concerns on willingness to pay for improved air quality: a contingent valuation application in Mexico City," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 25(1), pages 1-18, December.
    21. Day, Brett & Bateman, Ian J. & Carson, Richard T. & Dupont, Diane & Louviere, Jordan J. & Morimoto, Sanae & Scarpa, Riccardo & Wang, Paul, 2012. "Ordering effects and choice set awareness in repeat-response stated preference studies," Journal of Environmental Economics and Management, Elsevier, vol. 63(1), pages 73-91.
    22. Koo, A Mi & Kim, Ju-Hee & Yoo, Seung-Hoon, 2022. "Household willingness to pay for a smart water metering and monitoring system: The case of South Korea," Utilities Policy, Elsevier, vol. 79(C).
    23. Tomas Badura & Silvia Ferrini & Michael Burton & Amy Binner & Ian J. Bateman, 2020. "Using Individualised Choice Maps to Capture the Spatial Dimensions of Value Within Choice Experiments," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 75(2), pages 297-322, February.
    24. Kim, Ju-Hee & Han, Su-Mi & Yoo, Seung-Hoon, 2023. "Price premium for green hydrogen in South Korea: Evidence from a stated preference study," Renewable Energy, Elsevier, vol. 211(C), pages 647-655.

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