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Dichotomous-Choice, Contingent-Valuation Questions: Functional Form Is Important

Published online by Cambridge University Press:  10 May 2017

Kevin J. Boyle
Kevin J. Boyle*
Affiliation:
Agricultural and Resource Economics, University of Maine
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Abstract

A variety of questioning formats have been used in contingent-valuation studies, with dichotomous-choice questions becoming the preferred format. However, as with any empirical technique, continued applications raise questions that require attention if the credibility of the procedure is to be maintained. It is shown that estimated Hicksian surplus can be substantially affected by the selection of a functional form when analyzing responses to dichotomous-choice questions. Given that theory, intuition, and empiricism all play a role in developing these estimates, several maxims are suggested for evaluating and/or mitigating such effects in future studies.

Type
Articles
Information
Northeastern Journal of Agricultural and Resource Economics , Volume 19 , Issue 2 , October 1990 , pp. 125 - 131
Copyright
Copyright © 1990 Northeastern Agricultural and Resource Economics Association 

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Footnotes

Marcia Phillips’ research assistance was invaluable. Comments on previous drafts by Rich Bishop, Mike Bowker, John Loomis, Steve Reiling, Spiro Stefano, and an anonymous referee are greatly appreciated. As usual, all errors or omissions are the sole responsibility of the author.

This research was supported by a grant from the Illinois Department of Conservation to HBRS, Madison, WI; by the University of Maine Agricultural Experiment Station; and by the College of Agriculture and Life Sciences, University of Wisconsin-Madison. Maine Agricultural Experiment Station Publication no. 1486.

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