Generalized Estimation Methods for Non-i.i.d. Binary Data: An Application to Dichotomous Choice Contingent Valuation

We challenge the assumption of i.i.d random utility across alternatives embedded in typical applications of logit models to dichotomous choice contingent valuation data. Using a Gumbel mixed distribution which nests a number of traditional models, we show that the logistic distribution is not a suitable distribution for contingent valuation analysis.Research Methods/ Statistical Methods,

Temporal Insensitivity of Willingness to Pay: How do they evaluate in CVM?

In addition to scope and scale embedding effects, temporal insensitivity of willingness to pay, also known as temporal embedding effect, has been a well known anomaly in eliciting willingness to pay for environmental quality change, especially over time. Stevens et al. (1997) defines two types of temporal embedding effects: strong insensitivity and weak insensitivity to payment schedule. This paper proposes an alternative definition of the temporal insensitivity. Temporal insensitivity implies that a subject in the survey responds consistently to value elicitation questions regardless of payment schemes. The sequential test tests the temporal insensitivity using the oyster reef restoration programs in Chesapeake Bay. Test results show that willingness to pay for the program is insensitive to the payment scheme or to the length of benefit stream of the project. Discount rates imbedded in cost stream vary significantly among the combination of project lengths and payment schemes.Temporal insensitivity of willingness to pay, Temporal embedding effect, Implicit discount rate, Sequential test, Demand and Price Analysis,

Inconsistent responses in the dichotomous choice contingent valuation with follow-up questions

This essay develops a new method to diagnose inconsistency in dichotomous choice contingent valuation with follow-up questions: in particular, downward bias in the mean WTP. It is shown that the previous methods aimed to explain this inconsistency in responses have ignored statistical inconsistency: non-perfect correlation between the initial and follow-up responses and thus have provided wrong predictions to explain respondents' inconsistency pattern. In addition, from an application of our method, it has been proven that one model can not encompass all other possible inconsistency patterns in responses. Test results show that the behavioral inconsistency patterns are different both within and between data setsResearch Methods/ Statistical Methods,

REVISITING BID DESIGN ISSUES IN CONTINGENT VALUATION

A uniform bid design from a predetermined uniform distribution is proposed as a practical and robust alternative to existing optimal or naïve bid designs. Analytics and simulations show that the uniform design provides efficiency better than naïve designs under ideal conditions and outperforms optimal designs with poor initial information.Research Methods/ Statistical Methods,

CHOICE SET CONSIDERATIONS IN MODELS OF RECREATION DEMAND: HISTORY AND CURRENT STATE OF THE ART

Demand and Price Analysis,

NORMS, SELF-SANCTIONING, AND CONTRIBUTIONS TO THE PUBLIC GOOD

The relationship between norms, self-sanctioning, and people’s decisions about contributing to public goods is complex and often misunderstood in the public goods literature. We develop a model in which individuals hold an injunctive norm indicating how much they believe one should contribute to the public good. From the model we derive the following testable hypotheses: an increase in one’s perception of the norm level of contribution to the public good (1) induces negative self-sanctioning and (2) will lead one to contribute more to the public good, and (3) that contributing to the public good induces positive self-sanctioning. To test these hypotheses, we elicit stated preferences for contributions to an organization which offsets carbon emissions and a proxy for self-sanctioning, change in respondent “self-image.”public goods, norms, sanctioning, image, Environmental Economics and Policy, Public Economics, H4, Q5, D0,

Sur La H-Rigidité Des Surfaces Complètes De R3

Le théorème fondamental de la théorie locale des surfaces affirme que toute immersion C3 d'une surface dans R3 est déterminée, à congruence près, par sa première et deuxième forme fondamentale. Nous montrerons dans cette note qu'une surface complète C5 de R3 avec ∣dH∣ ≠ 0 est en fait essentiellement détermineé, à congruence près, par la première forme fondamentale et la trace de la seconde, i.e. par la métrique et la fonction courbure moyenne H. 1991 Mathematics Subject Classification 53A05, 53A1

THE VALUE OF AGRICULTURAL ECONOMICS EXTENSION PROGRAMMING: AN APPLICATION OF CONTINGENT VALUATION

We use the contingent valuation method to estimate participant willingness to pay for agricultural economics extension programming. The data, collected as part of standard evaluation forms for the Ohio State University's 2001 Agricultural Outlook and Policy program series, and subsequent analysis suggest participant benefits exceeded departmental costs of conducting the program (benefit-cost ratios of 1.07 under conservative assumptions and 1.74 under moderate assumptions). We also use the data to explore the revenue generation potential from alternative program pricing and discuss the potential for developing differentiated programs to reach distinct audience segments. Additional research necessary before implementing alternative pricing or program differentiation plans is also discussed.Teaching/Communication/Extension/Profession,

Using Biomedical Technologies to Inform Economic Modeling: Challenges and Opportunities for Improving Analysis of Environmental Policies

Advances in biomedical technology have irrevocably jarred open the black box of human decision making, offering social scientists the potential to validate, reject, refine and redefine the individual models of resource allocation that form the foundation of modern economics. In this paper we (1) provide a comprehensive overview of the biomedical methods that may be harnessed by economists and other social scientists to better understand the economic decision making process; (2) review research that utilizes these biomedical methods to illuminate fundamental aspects of the decision making process; and (3) summarize evidence from this literature concerning the basic tenants of neoclassical utility that are often invoked for positive welfare analysis of environmental policies. We conclude by raising questions about the future path of policy related research and the role biomedical technologies will play in defining that path.neuroeconomics, neuroscience, brain imaging, genetics, welfare economics, utility theory, biology, decision making, preferences, Institutional and Behavioral Economics, Research Methods/ Statistical Methods, D01, D03, D6, D87,

Asymmetric Search and Loss Aversion: Choice Experiment on Consumer Willingness to Search in the Gasoline Retail Market

Price search enables consumers to overcome information asymmetries, it can lead to a reduction in price dispersion and it can increase consumer surplus, but search is costly. In this paper, an internet survey is conducted among a random sample of 490 drivers in the State of Ohio to answer the question, when are consumers more likely to search? The internet survey affords us the opportunity to impose exogenous price changes in a random sample of gasoline consumers to examine the decision-making process behind intended search decisions. Results indicate that among the respondents who faced prices below their expected price, only 12% chose to search, whereas 45% searched when prices were above. Results suggest that asymmetric search can be explained by prospect theory, in the sense that consumers evaluate current prices compared to a reference price, and as a consequence they value price increases differently from price decreases. Our findings indicate that in the gasoline retail market, consumers are allowing retailers to extract consumer surplus by exhibiting loss aversion because this behavior deters search when the probability of finding a lower price is highest.price search, choice experiment, search cost, gasoline market, Consumer/Household Economics, Demand and Price Analysis, D83, D03,