Reply to “a comment on ‘three reasons to use annual payments in contingent valuation’”

Kevin Egan, Jay Corrigan () and Daryl F. Dwyer

Journal of Environmental Economics and Management, 2018, vol. 88, issue C, 489-495

Abstract: Whitehead (2017) suggests the contingent valuation (CV) data from Egan et al. (2015) lacks theoretical validity and has a “fat tails” problem, while also questioning our conclusion that CV surveys using annual payments produce willingness to pay (WTP) estimates that better match consumer surplus estimates from a travel cost model. In this reply, we use likelihood ratio tests to show that our CV data is theoretically valid. We use the Turnbull and Kriström distribution-free estimators to show that our CV data generate economically significant WTP estimates with small standard errors. Finally, we apply the sensitivity analyses from our original paper to Whitehead's results. These sensitivity analyses overwhelmingly support our original conclusion in favor of using annual payments in CV surveys.

Keywords: Q5; Q51; Q26; Discounting; Contingent valuation; Convergent validity; Willingness to Pay; nonparametric estimation; fat tails problem; Turnbull Estimator; Kriström Estimator (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:88:y:2018:i:c:p:489-495

DOI: 10.1016/j.jeem.2017.06.003

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