IDEAS home Printed from https://ideas.repec.org/p/ags/aare04/58370.html
   My bibliography  Save this paper

Why Value Estimates Generated Using Choice Modelling Exceed Contingent Valuation: Further Experimental Evidence

Author

Listed:
  • Boyle, Kevin J.
  • Morrison, Mark
  • Taylor, Laura O.

Abstract

Choice modelling is increasingly being used to generate estimates of the value of changes in environmental quality. This is partly because of the informational efficiencies of the technique, but also because of concern about the accuracy of contingent valuation. Experimental evidence has, however, demonstrated that choice modelling tends to produce much higher valuation estimates than contingent valuation. One possible explanation for the divergence between choice modelling and contingent valuation estimates is the lack of incentive compatibility with the former technique. This potentially has several sources, including having no provision rule (eg a referendum), respondents choosing between more than two alternatives, and repeated choices. We report on the results of a series of experiments involving over 2000 subjects designed to test whether a lack of incentive compatibility is responsible for divergences in value estimates.

Suggested Citation

  • Boyle, Kevin J. & Morrison, Mark & Taylor, Laura O., 2004. "Why Value Estimates Generated Using Choice Modelling Exceed Contingent Valuation: Further Experimental Evidence," 2004 Conference (48th), February 11-13, 2004, Melbourne, Australia 58370, Australian Agricultural and Resource Economics Society.
    • Handle: RePEc:ags:aare04:58370
    DOI: 10.22004/ag.econ.58370
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/58370/files/2004_boyle.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.58370?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Wiktor Adamowicz & Peter Boxall & Michael Williams & Jordan Louviere, 1998. "Stated Preference Approaches for Measuring Passive Use Values: Choice Experiments and Contingent Valuation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 64-75.
    2. Prince, Raymond & McKee, Michael & Ben-David, Shaul & Bagnoli, Mark, 1992. "Improving the contingent valuation method: Implementing the contribution game," Journal of Environmental Economics and Management, Elsevier, vol. 23(1), pages 78-90, July.
    3. Jayson L. Lusk, 2003. "Effects of Cheap Talk on Consumer Willingness-to-Pay for Golden Rice," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 840-856.
    4. Timothy C. Haab & Ju-Chin Huang & John C. Whitehead, 1999. "Are Hypothetical Referenda Incentive Compatible? A Comment," Journal of Political Economy, University of Chicago Press, vol. 107(1), pages 186-196, February.
    5. Carlsson, Fredrik & Martinsson, Peter, 2001. "Do Hypothetical and Actual Marginal Willingness to Pay Differ in Choice Experiments?: Application to the Valuation of the Environment," Journal of Environmental Economics and Management, Elsevier, vol. 41(2), pages 179-192, March.
    6. Vivien Foster & Susana Mourato, 2003. "Elicitation Format and Sensitivity to Scope," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 24(2), pages 141-160, February.
    7. Adamowicz, Wiktor L. & Boxall, Peter C. & Williams, Michael & Louviere, Jordan, 1995. "Stated Preference Approaches for Measuring Passive Use Values: Choice Experiments versus Contingent Valuation," Staff Paper Series 24126, University of Alberta, Department of Resource Economics and Environmental Sociology.
    8. Layton, David F., 2000. "Random Coefficient Models for Stated Preference Surveys," Journal of Environmental Economics and Management, Elsevier, vol. 40(1), pages 21-36, July.
    9. Laura O. Taylor & Ronald G. Cummings, 1999. "Unbiased Value Estimates for Environmental Goods: A Cheap Talk Design for the Contingent Valuation Method," American Economic Review, American Economic Association, vol. 89(3), pages 649-665, June.
    10. Boxall, Peter C. & Adamowicz, Wiktor L. & Swait, Joffre & Williams, Michael & Louviere, Jordan, 1996. "A comparison of stated preference methods for environmental valuation," Ecological Economics, Elsevier, vol. 18(3), pages 243-253, September.
    11. Magat, Wesley A. & Kip Viscusi, W. & Huber, Joel, 1988. "Paired comparison and contingent valuation approaches to morbidity risk valuation," Journal of Environmental Economics and Management, Elsevier, vol. 15(4), pages 395-411, December.
    12. Cummings, Ronald G & Elliott, Steven & Harrison, Glenn W & Murphy, James, 1997. "Are Hypothetical Referenda Incentive Compatible?," Journal of Political Economy, University of Chicago Press, vol. 105(3), pages 609-621, June.
    13. Newell, Laurienne Whinstanley & Swallow, Stephen K., 2002. "Are Stated Preferences Invariant To The Prospect Of Real-Money Choice?," 2002 Annual meeting, July 28-31, Long Beach, CA 19623, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    14. Timothy Park & John B. Loomis & Michael Creel, 1991. "Confidence Intervals for Evaluating Benefits Estimates from Dichotomous Choice Contingent Valuation Studies," Land Economics, University of Wisconsin Press, vol. 67(1), pages 64-73.
    15. Gregory L. Poe & Kelly L. Giraud & John B. Loomis, 2005. "Computational Methods for Measuring the Difference of Empirical Distributions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(2), pages 353-365.
    16. Kevin J. Boyle & Thomas P. Holmes & Mario F. Teisl & Brian Roe, 2001. "A Comparison of Conjoint Analysis Response Formats," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(2), pages 441-454.
    17. Cummings, Ronald G & Harrison, Glenn W & Rutstrom, E Elisabet, 1995. "Homegrown Values and Hypothetical Surveys: Is the Dichotomous Choice Approach Incentive-Compatible?," American Economic Review, American Economic Association, vol. 85(1), pages 260-266, March.
    18. Nick Hanley & Douglas MacMillan & Robert E. Wright & Craig Bullock & Ian Simpson & Dave Parsisson & Bob Crabtree, 1998. "Contingent Valuation Versus Choice Experiments: Estimating the Benefits of Environmentally Sensitive Areas in Scotland," Journal of Agricultural Economics, Wiley Blackwell, vol. 49(1), pages 1-15, March.
    19. Holt, Charles A. & Laury, Susan K., 2008. "Theoretical Explanations of Treatment Effects in Voluntary Contributions Experiments," Handbook of Experimental Economics Results, in: Charles R. Plott & Vernon L. Smith (ed.), Handbook of Experimental Economics Results, edition 1, volume 1, chapter 90, pages 846-855, Elsevier.
    20. Daniel McFadden & Kenneth Train, 2000. "Mixed MNL models for discrete response," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(5), pages 447-470.
    21. Jeff Bennett & Russell Blamey (ed.), 2001. "The Choice Modelling Approach to Environmental Valuation," Books, Edward Elgar Publishing, number 2028.
    22. Blamey, R. K. & Bennett, J. W. & Louviere, J. J. & Morrison, M. D. & Rolfe, J., 2000. "A test of policy labels in environmental choice modelling studies," Ecological Economics, Elsevier, vol. 32(2), pages 269-286, February.
    23. Hoehn, John P. & Randall, Alan, 1987. "A satisfactory benefit cost indicator from contingent valuation," Journal of Environmental Economics and Management, Elsevier, vol. 14(3), pages 226-247, September.
    24. Stevens, T. H. & Belkner, R. & Dennis, D. & Kittredge, D. & Willis, C., 2000. "Comparison of contingent valuation and conjoint analysis in ecosystem management," Ecological Economics, Elsevier, vol. 32(1), pages 63-74, January.
    25. David Bjornstad & Ronald Cummings & Laura Osborne, 1997. "A Learning Design for Reducing Hypothetical Bias in the Contingent Valuation Method," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 10(3), pages 207-221, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. McNair, Ben J. & Bennett, Jeff & Hensher, David A., 2011. "A comparison of responses to single and repeated discrete choice questions," Resource and Energy Economics, Elsevier, vol. 33(3), pages 554-571, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Siikamaki, Juha & Layton, David F., 2006. "Discrete Choice Survey Experiments: A Comparison Using Flexible Models," RFF Working Paper Series dp-05-60, Resources for the Future.
    2. 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.
    3. Siikamaki, Juha & Layton, David F., 2007. "Discrete choice survey experiments: A comparison using flexible methods," Journal of Environmental Economics and Management, Elsevier, vol. 53(1), pages 122-139, January.
    4. List John A. & Sinha Paramita & Taylor Michael H., 2006. "Using Choice Experiments to Value Non-Market Goods and Services: Evidence from Field Experiments," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 6(2), pages 1-39, January.
    5. Richard T. Carson, 2011. "Contingent Valuation," Books, Edward Elgar Publishing, number 2489.
    6. Mandy Ryan & Verity Watson, 2009. "Comparing welfare estimates from payment card contingent valuation and discrete choice experiments," Health Economics, John Wiley & Sons, Ltd., vol. 18(4), pages 389-401, April.
    7. Vivien Foster & Susana Mourato, 2003. "Elicitation Format and Sensitivity to Scope," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 24(2), pages 141-160, February.
    8. Siikamaki, Juha & Layton, David F., 2001. "Logit Models For Pooled Contingent Valuation And Contingent Rating And Ranking Data: Valuing Benefits From Forest Biodiversity Conservation," 2001 Annual meeting, August 5-8, Chicago, IL 20616, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Richard Carson & Theodore Groves, 2007. "Incentive and informational properties of preference questions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(1), pages 181-210, May.
    10. Choi, Andy S., 2013. "Nonmarket values of major resources in the Korean DMZ areas: A test of distance decay," Ecological Economics, Elsevier, vol. 88(C), pages 97-107.
    11. F Alpizar & F Carlsson & P Martinsson, 2003. "Using Choice Experiments for Non-Market Valuation," Economic Issues Journal Articles, Economic Issues, vol. 8(1), pages 83-110, March.
    12. Oviedo, José L. & Caparrós, Alejandro, 2015. "Information and visual attention in contingent valuation and choice modeling: field and eye-tracking experiments applied to reforestations in Spain," Journal of Forest Economics, Elsevier, vol. 21(4), pages 185-204.
    13. Halkos, George, 2012. "The use of contingent valuation in assessing marine and coastal ecosystems’ water quality: A review," MPRA Paper 42183, University Library of Munich, Germany.
    14. Helen Scarborough & Jeff Bennett, 2012. "Cost–Benefit Analysis and Distributional Preferences," Books, Edward Elgar Publishing, number 14376.
    15. Johansson-Stenman , Olof & Svedsäter, Henrik, 2003. "Self Image And Choice Experiments: Hypothetical And Actual Willingness To Pay," Working Papers in Economics 94, University of Gothenburg, Department of Economics.
    16. Liljas, Bengt & Blumenschein, Karen, 2000. "On hypothetical bias and calibration in cost-benefit studies," Health Policy, Elsevier, vol. 52(1), pages 53-70, May.
    17. Mikołaj Czajkowski & Nick Hanley, 2008. "How to ‘Sell’ an Environmental Good: Using Labels to Investigate Scope Effects," Working Papers 2008-03, Faculty of Economic Sciences, University of Warsaw.
    18. John K. Horowitz & Kenneth E. McConnell & James J. Murphy, 2013. "Behavioral foundations of environmental economics and valuation," Chapters, in: John A. List & Michael K. Price (ed.), Handbook on Experimental Economics and the Environment, chapter 4, pages 115-156, Edward Elgar Publishing.
    19. Shogren, Jason F., 2006. "Experimental Methods and Valuation," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 19, pages 969-1027, Elsevier.
    20. Nguyen, Thanh Cong & Le, Hoa Thu & Nguyen, Hang Dieu & Ngo, Mai Thanh & Nguyen, Hong Quang, 2021. "Examining ordering effects and strategic behaviour in a discrete choice experiment," Economic Analysis and Policy, Elsevier, vol. 70(C), pages 394-413.

    More about this item

    Keywords

    Research Methods/ Statistical Methods;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aare04:58370. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaresea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.