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Valuing Injury To Natural Resources: The Effect Of Resource Quality Information On Perceptions And Contingent Values

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  • Randall, Alan
  • Hoehn, John P.

Abstract

Respondents are heterogeneous in their prior information about resource injury. The analysis derives an updating model of how heterogeneous respondents incorporate new information contained in resource injury descriptions. The analysis confirms that the sign of the information effect is determined by the difference between new and prior information. However, in the present analysis, respondents differ in prior information so that treatment information induces different perceptions and different values in different respondents. The empirical analysis confirms that identical treatments result in different injury perceptions. Across respondents, treatment induced changes in perceived injury vary not only in size, but also in sign. Both theory and empirical results show that willingness to pay varies directly with perceived injury.

Suggested Citation

  • Randall, Alan & Hoehn, John P., 2000. "Valuing Injury To Natural Resources: The Effect Of Resource Quality Information On Perceptions And Contingent Values," Staff Paper Series 11507, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    • Handle: RePEc:ags:midasp:11507
    DOI: 10.22004/ag.econ.11507
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    References listed on IDEAS

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    1. Cameron, Trudy Ann & James, Michelle D, 1987. "Efficient Estimation Methods for "Closed-ended' Contingent Valuation Surveys," The Review of Economics and Statistics, MIT Press, vol. 69(2), pages 269-276, May.
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    Cited by:

    1. Hoehn, John P. & Randall, Alan, 2002. "The effect of resource quality information on resource injury perceptions and contingent values," Resource and Energy Economics, Elsevier, vol. 24(1-2), pages 13-31, February.

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