Location of Repository

It is a generally known statistical fact that the mean of a nonlinear function of a set of random variables is not equivalent to the function evaluated at the means of the variables. However, in dichotomous choice contingent valuation studies a common practice is to calculate an overall mean (or median) by integrating over offer space (numerically or analytically) an estimated logit or probit function in which sample mean values for the concomitant variables are used. We demonstrate this procedure to be incorrect and we statically test the procedure against the correct method for nonlinear models. Using data resulting in a well-behaved logit model, we reject the hypothesis of congruence between the two means. Such a finding should be considered in future single response dichotomous choice CVM studies, particularly when aggregation is of interest.Research Methods/ Statistical Methods,

OAI identifier:

Provided by:
Research Papers in Economics

Downloaded from
http://purl.umn.edu/31649

- A New Paradigm for Valuing Non-Market Goods Using Referendum Data: Maximum Likelihood Es1 1 timation by Censored Logistic Regression."
- (1993). An attribute of interest may be nonlinearly related
- Comparison of Recre- "Contingent Valuation of a Public Program to Control ation Use Values among Alternative Reservoir Water- Black Flies."
- iments with Discrete Response Data: Reply."
- Properties of Elasticities."
- Statistical Approaches to Wright. "A Bibliography of Contingent Valuation Studies the Fat Tail Problem for Dichotomous Choice Contingent and Papers." La Jolla: Natural Resources Damage Assess- Valuation."
- the previously demonstrated nonequality of means
- there are no proportions (weighted means) that
- (1989). Using Surveys to Value Pub-
- Validation of
- Welfare Evaluations in Contingent Valua-
- Welfare Measurements Using Contingent Valuation: A Comparison of Techniques."
- Wildlife Recovery: Is Benefit-Cost Analysis AppropriGreene, W.H. Econometric Analysis.

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.