nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2008‒04‒21
two papers chosen by
Philip Yu
Hong Kong University

  1. Testing the Validity of WTP values from a Contingent Valuation Survey in Portugal By Paulo Augusto Nunes
  2. Do EPA administrators recommend environmental policies that citizens want? By Carlsson, Fredrik; Kataria, Mitesh; Lampi, Elina

  1. By: Paulo Augusto Nunes
    Abstract: This paper explores the statistical validity of the willingness to pay (WTP) answers from a contingent valuation (CV) survey concerning value assessment of recreation and biodiversity protection programs. Firstly, we use a non-parametric testing approach as to evaluate the whether (a) different information levels concerning the government costs with the Park and (b) different payment vehicles influence the stated WTP responses. Secondly, we use a parametric model specification as to investigate the impact of the elicitation question format on the stated WTP responses. The likelihood ratio test results, at 95% confidence level, confirm the validity of the proposed survey a measurement instrument. Nevertheless, the presence of free riding turns out to be statistically significant in one of the survey versions. The parametric model results suggest that the differences in the mean WTP estimates across the two question formats are not statistically different. Furthermore, the double bounded dichotomous choice model value estimates point out that the WTP for the recreation protection program is lower than the WTP for the biodiversity protection program, thus confirming the importance of non-use value component of the Natural Area.
    Date: 2008–03
  2. By: Carlsson, Fredrik (Department of Economics, School of Business, Economics and Law, Göteborg University); Kataria, Mitesh (National Environmental Research Institute, University of Aarhus); Lampi, Elina (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: We investigate whether Swedish Environmental Protection Agency (EPA) administrator preferences regarding improvements in environmental quality differ from citizen preferences. The scope and significance of the possible difference are assessed by conducting identical choice experiments (CE) on a random sample of Swedish citizens and a random sample of administrators working at the Swedish EPA. The experiment concerns two environmental quality objectives: a Balanced Marine Environment and Clean Air. The EPA administrators were asked to choose the alternatives they would recommend as a policy, while the citizens were asked to act as private persons. We find that the rankings of attributes differ between the two groups, and that there are significant differences in the willingness to pay (WTP) for particular attributes. EPA administrators have a higher WTP for five out of the seven attributes, and in some cases the difference is not only significant but also substantial. We also asked the administrators to motivate their CE choices, and the main motive was ecological sustainability.<p>
    Keywords: Choice experiment; environmental policy; administrators; citizens
    JEL: D61 Q51 Q58
    Date: 2008–04–14

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