Incorporating zero values in the economic valuation of environmental program benefits
✍ Scribed by Benjamin Reiser; Mordechai Shechter
- Publisher
- John Wiley and Sons
- Year
- 1999
- Tongue
- English
- Weight
- 135 KB
- Volume
- 10
- Category
- Article
- ISSN
- 1180-4009
No coin nor oath required. For personal study only.
✦ Synopsis
The contingent valuation method estimates individuals' willingness to pay (WTP) for non-market environmental assets via preferences elicited by either open-ended or dichotomous choice questions. Traditional analysis of such data has tended to ignore zero WTP values, or treat them in an unsatisfactory manner. Recently, spike models, which explicitly allow for and incorporate zero responses, have been suggested. The paper extends the spike model approach to allow for explanatory covariates, and shows how standard computer software can be used to carry out the computations. In addition, the paper develops estimates of mean or median willingness to pay as a function of these covariates.