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Protesting or justifying? A latent class model for contingent valuation with attitudinal data

Author

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  • Maria A Cunha-e-Sa
  • Livia Madureira
  • Luis Catela Nunes
  • Vladimir Otrachshenko

Abstract

This article develops a latent class model for estimating willingness-to-pay for public goods using simultaneously contingent valuation (CV) and attitudinal data capturing protest attitudes related to the lack of trust in public institutions providing those goods. A measure of the social cost associated with protest responses and the consequent loss in potential contributions for providing the public good is proposed. The presence of potential justification biases is further considered, that is, the possibility that for psychological reasons the response to the CV question affects the answers to the attitudinal questions. The results from our empirical application suggest that psychological factors should not be ignored in CV estimation for policy purposes, allowing for a correct identification of protest responses.

Suggested Citation

  • Maria A Cunha-e-Sa & Livia Madureira & Luis Catela Nunes & Vladimir Otrachshenko, 2010. "Protesting or justifying? A latent class model for contingent valuation with attitudinal data," Nova SBE Working Paper Series wp547, Universidade Nova de Lisboa, Nova School of Business and Economics.
    • Handle: RePEc:unl:unlfep:wp547
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    Cited by:

    1. William Breffle & Edward Morey & Jennifer Thacher, 2011. "A Joint Latent-Class Model: Combining Likert-Scale Preference Statements With Choice Data to Harvest Preference Heterogeneity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 50(1), pages 83-110, September.
    2. Brouwer, Roy & Martín-Ortega, Julia, 2012. "Modeling self-censoring of polluter pays protest votes in stated preference research to support resource damage estimations in environmental liability," Resource and Energy Economics, Elsevier, vol. 34(1), pages 151-166.
    3. Madureira, Lívia & Nunes, Luis C. & Borges, José G. & Falcão, André O., 2011. "Assessing forest management strategies using a contingent valuation approach and advanced visualisation techniques: A Portuguese case study," Journal of Forest Economics, Elsevier, vol. 17(4), pages 399-414.
    4. Meyerhoff, Jurgen & Bartczak, Anna & Liebe, Ulf, 2012. "Protester or non-protester: a binary state? on the use (and non-use) of latent class models to analyse protesting in economic valuation," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 56(3), pages 1-17.

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    More about this item

    Keywords

    Public goods; quality of institutions; protest responses; contingent valuation; justification bias; latent class model;
    All these keywords.

    JEL classification:

    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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