Combining CV and RP data: a note on the relationship between consistency and rationality

In this paper, we show that, when combining revealed (RP) and stated (SP) data, for marginal changes in quality of environmental goods, rationality implies consistency, as the consistency conditions coincide with a subset of the conditions for rationality.combined (RP and SP) individual data; rationality; data consistency

The Hyperbolic Forest Owner

This paper examines the implications of quasi-hyperbolic inter-temporal preferences to the Faustman model. The use of decreasing discount rates leads to dynamically inconsistent behavior. To solve this problem a two-stages optimization decision model is developed. The resulting actual cutting time will be anticipated compared to the Faustman optimal cutting time. If, alternatively, the equivalent constant rate of discount is the empirically observed discount rate, then the optimal cutting time is the same, but the present value of profits for the hyperbolic forest owner is always higher than the one resulting from the equivalent constant discount rate. All these results apply to both the single and the multiple rotation problems.Hyperbolic discounting; time preference; dynamic inconsistency; Faustman model; optimal rotation

Combining Averting Behavior and Contingent Valuation Data: An Application to Drinking Water Treatment

This paper is an empirical application that combines averting behavior with contingent valuation data. Consistency tests are performed incorporating alternative heteroscedastic structures in the bivariate probit models by taking advantage of the different information content that characterizes each data source. We look at three covariates not yet examined in the literature when combining stated and revealed preferred data to explain the variance in the models: income, the bid in the contingent valuation questionnaire, and the distance between the bid and the averting expenditures with drinking water. The models estimated include between and within data sources heteroscedasticity. The results obtained allow the combination of the two data sources under a common preference structure.averting behavior, combination of data sets, consistency tests, contingent valuation, revealed preferred data

The Hyperbolic Forest Owner

This paper examines the implications of quasi-hyperbolic inter-temporal preferences to the Faustman model. The use of decreasing discount rates leads to dynamically inconsistent behavior. To solve this problem a two-stages optimization decision model is developed. The resulting actual cutting time will be anticipated compared to the Faustman optimal cutting time. If, alternatively, the equivalent constant rate of discount is the empirically observed discount rate, then the optimal cutting time is the same, but the present value of profits for the hyperbolic forest owner is always higher than the one resulting from the equivalent constant discount rate. All these results apply to both the single and the multiple rotation problems.N/

Combining Averting Behavior and Contingent Valuation Data: an Application to Drinking Water Treatment

This paper is an empirical application that combines averting behavior with contingent valuation data. Consistency tests are performed incorporating alternative heteroscedastic structures in the bivariate probit models by taking advantage of the different information content that characterizes each data source. We look at three covariates not yet examined in the literature when combining stated and revealed preferred data to explain the variance in the models: income, the bid in the contingent valuation questionnaire, and the distance between the bid and the averting expenditures with drinking water. The models estimated include between and within data sources heteroscedasticity. The results obtained allow the combination of the two data sources under a common preference structure.N/

Identifying Nonrational Behavior in Recreation Demand Models

In the context of an estimated RPL (Random Parameters Logit) choice model of recreational demand for the game reserves of the KwaZulu-Natal province in South Africa, a test on the existence of an underlying rational preference structure is presented. The proposed procedure allows to identify nonrational behavior in the sample. Using two different data sets extracted from the original data base, we show that by improving the data, apparent nonrationality can be eliminated and welfare analysis may be safely conducted.N/

Testing Rationality in Contingent Valuation Studies

In a world characterized by one unrationed good (ie, market good), and one rationed, such as most of environmental goods, we obtain sufficient conditions for the existence of an underlying rational preference structure based on a system of mixed demand functions. The implications for CV studies are derived. For policy purposes, in particular in what concerns welfare evaluations, our results can be of great relevance.N/

A Note on the Existence of a Rational Preference Structure: The Sufficient Condition for WARP

By exploring the relationship between the two approaches to modelling individual choice behavior, we examine a case under which the sufficient condition for WARP is also necessary. Moreover, it extends the 2-goods world case's result.N/

The Demand for Environmental Quality and the Existence of a Rational Preference Structure: The Case of Mixed Demand Functions

In a world characterized by unrationed goods (ie, market goods), and rationed ones, such as most of environmental goods, we derive sufficient conditions for the existence of an underlying rational preference structure based on a mixed system of demand functions. Differently from Madden (1991), where rationality is assumed (ie, a preference-based approach), we adopted a choice-basic approach. As a result, more restrictive conditions have to be imposed. For policy purposes, in particular, in what concerns welfare evaluations, our results can be of great relevance.N/