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A replication of willingness-to-pay estimates in "An adding up test on contingent valuations of river and lake quality" (Land Economics, 2015)

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  • Whitehead, John Claiborne

Abstract

Desvousges, Mathews and Train (2015) find that their contingent valuation method (CVM) survey data does not pass the adding up test using a nonparametric estimate of mean willingness-to-pay. Their data suffers from non-monotocity, flat bid curve and fat tails problems, each of which can cause willingness-to-pay estimates to be sensitive to the approach chosen to measure the central tendency. Using additional parametric approaches that are standard in the literature, I find that willingness to pay for the whole is not statistically different from the sum of the parts in two of three additional estimates. In additional robustness checks, all six of the additional tests find that the WTP estimates do not reject the adding up hypothesis. The negative result in Desvousges, Mathews and Train (2015) is not robust to these alternative approaches to willingness-to-pay estimation.

Suggested Citation

  • Whitehead, John Claiborne, 2017. "A replication of willingness-to-pay estimates in "An adding up test on contingent valuations of river and lake quality" (Land Economics, 2015)," Economics Discussion Papers 2017-55, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwedp:201755
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    References listed on IDEAS

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    1. George Parsons & Kelley Myers, 2017. "Fat tails and truncated bids in contingent valuation: an application to an endangered shorebird species," Chapters, in: Daniel McFadden & Kenneth Train (ed.), Contingent Valuation of Environmental Goods, chapter 2, pages 17-42, Edward Elgar Publishing.
    2. Timothy C. Haab & Kenneth E. McConnell, 2002. "Valuing Environmental and Natural Resources," Books, Edward Elgar Publishing, number 2427.
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    Cited by:

    1. John C. Whitehead, 2017. "Who Knows What Willingness to Pay Lurks in the Hearts of Men? A Rejoinder to Egan, Corrigan, and Dwyer," Econ Journal Watch, Econ Journal Watch, vol. 14(3), pages 346–361-3, September.
    2. John C. Whitehead, 2016. "A Comment on “An Adding Up Test on Contingent Valuations of River and Lake Quality”," Working Papers 17-01, Department of Economics, Appalachian State University.

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    More about this item

    Keywords

    contingent valuation; adding up test; willingness-to-pay;
    All these keywords.

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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