Hostname: page-component-cd9895bd7-p9bg8 Total loading time: 0 Render date: 2024-12-25T01:54:17.527Z Has data issue: false hasContentIssue false
  • English
  • Français

A Pseudo-Sequential Choice Model for Valuing Multi-Attribute Environmental Policies or Programs in Contingent Valuation Applications

Published online by Cambridge University Press:  15 September 2016

Dmitriy Volinskiy ,
John C. Bergstrom ,
Christopher M. Cornwell  and
Thomas P. Holmes
Dmitriy Volinskiy
Affiliation:
Department of Rural Economy at the University of Alberta in Edmonton, Alberta, Canada
John C. Bergstrom
Affiliation:
Department of Agricultural and Applied Economics at The University of Georgia in Athens, Georgia
Christopher M. Cornwell
Affiliation:
Department of Economics at The University of Georgia in Athens, Georgia
Thomas P. Holmes
Affiliation:
Southern Research Station of the USDA Forest Service in Research Triangle Park, North Carolina
Get access Rights & Permissions [Opens in a new window]

Abstract

The assumption of independence of irrelevant alternatives in a sequential contingent valuation format should be questioned. Statistically, most valuation studies treat nonindependence as a consequence of unobserved individual effects. Another approach is to consider an inferential process in which any particular choice is part of a general choosing strategy of a survey respondent. A stochastic model is suggested, consistent with the reflexivity, transitivity, and continuity axioms of utility analysis. An application of this theoretical model to the valuation of watershed ecosystem restoration demonstrates that an empirical model recognizing reflexivity and transitivity, and also allowing for continuity, shows the highest in-sample predictive ability.

Keywords

contingent valuationsequential choicesmodeling approacheswatershed ecosystem service valuation
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 39 , Issue 1 , February 2010 , pp. 9 - 21
Copyright
Copyright © 2010 Northeastern Agricultural and Resource Economics Association 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Arrow, K., Solow, R., Portney, P.R., Leamer, E.E., Radner, R., and Schuman, H. 1993. “Report of the NOAA Panel on Contingent Valuation.” Federal Register 58(10, January 15): 4601–4614.Google Scholar
Bergstrom, J., Stoll, J., and Randall, A. 1989. “Information Effects in Contingent Markets.” American Journal of Agricultural Economics 71(3): 685–691.CrossRefGoogle Scholar
Besag, J. 1975. “Statistical Analysis of Non-Lattice Data.” The Statistician 24(3): 179–195.Google Scholar
Chu, C. 1989. “A Paired Combinatorial Logit Model for Travel Demand Analysis.” In Proceedings of Fifth World Conference on Transportation Research, Vol. 4. Ventura, CA, pp. 295–309.Google Scholar
DeShazo, J. 2002. “Designing Transactions Without Framing Effects in Iterative Question Formats.” Journal of Environmental Economics and Management 43(3): 360–385.Google Scholar
Giraud, K., Loomis, J., and Johnson, R. 1999. “Two Valuation Questions in One Survey: Is It a Recipe for Sequencing and Instrument Context Effects.” Applied Economics 31(8): 957–964.Google Scholar
Hanemann, W. 1984. “Welfare Evaluations in Contingent Valuation Experiments with Discrete Responses.” American Journal of Agricultural Economics 66(3): 332–341.Google Scholar
Hanemann, W., and Kanninen, B. 1999. “The Statistical Analysis of Discrete-Response CV Data.” In Bateman, I. and Willis, K.G., eds., Valuing Environmental Preferences: Theory and Practice of the Contingent Valuation Method in the US, EU, and Developing Countries. New York, NY: Oxford University Press.Google Scholar
Herriges, J., and Shogren, J. 1996. “Starting Point Bias in Dichotomous Choice Valuation with Follow-Up Questioning.” Journal of Environmental Economics and Management 30(1): 112–131.Google Scholar
Hoehn, J. 1991. “Valuing the Multidimensional Impacts of Environmental Policy: Theory and Methods.” American Journal of Agricultural Economics 73(2): 289–299.Google Scholar
Holmes, T., and Adamowicz, W. 2003. “Attributed-Based Methods.” In Champ, P., Boyle, K., and Brown, T., eds., A Primer on Nonmarket Valuation. Amsterdam, the Netherlands: Kluwer Academic Publishers.Google Scholar
Holmes, T., Bergstrom, J., Huszar, E., Kask, S., and Orr, F. III. 2004. “Contingent Valuation, Net Marginal Benefits, and the Scale of Riparian Ecosystem Restoration.” Ecological Economics 49(1): 19–30.CrossRefGoogle Scholar
Holmes, T., and Boyle, K. 2005. “Dynamic Learning and Context-Dependence in Sequential, Attribute-Based, Stated-Preference Valuation Questions.” Land Economics 81(1): 114–126.Google Scholar
Kahneman, D. 1986. “Comments on the Contingent Valuation Method.” In Cummings, R.G., Brookshire, D. S. and Schulze, W.D., eds., Valuing Environmental Goods: A State of the Arts Assessment of the Contingent Valuation Method. Totowa, NJ: Roweman and Allanheld.Google Scholar
McClennen, E. 1990. Rationality and Dynamic Choice: Foundational Explorations. Cambridge; New York, NY: Cambridge University Press.Google Scholar
McFadden, D., and Leonard, G. 1995. “Issues in the Contingent Valuation of Environmental Goods: Methodologies for Data Collection and Analysis.” In Hausman, J.A., ed., Contingent Valuation: A Critical Assessment. Amsterdam, the Netherlands: North Holland.Google Scholar
Read, D., Antonides, G., van den Ouden, L., and Trienekens, H. 2001. “What is Better: Simultaneous or Sequential Choice?” Organizational Behavior and Human Decision Processes 84(1): 54–70.CrossRefGoogle Scholar
Read, D., and Loewenstein, G. 1995. “Diversification Bias: Explaining the Discrepancy in Variety Seeking Between Combined and Separated Choices.” Journal of Experimental Psychology: Applied 1(1): 34–49.Google Scholar
Read, D., Loewenstein, G., and Rabin, M. 1999. “Choice Bracketing.” Journal of Risk and Uncertainty 19(1-3): 171–197.CrossRefGoogle Scholar
Spash, C. 2000. “Ecosystems, Contingent Valuation and Ethics: The Case of Wetland Re-creation.” Ecological Economics 34(2): 195–215.Google Scholar