Public distrust and valuation biases: Identification and calibration with contingent valuation studies of two air quality improvement programs in China

Hua Wang, Jie He and Desheng Huang

China Economic Review, 2020, vol. 61, issue C

Abstract: Economic valuation can be biased by public distrust in local institutions when those institutions are involved in the valuation scenario design, which is often the case for contingent valuation (CV) studies. To better identify and to calibrate the potential biases, we conduct two CV surveys on people's willingness to pay (WTP) for the implementation of new air quality improvement programs at the municipality level in China. A joint selection modeling strategy is developed and employed to identify the potential biases in WTP estimations caused by people's ex-ante distrust in local institutions. The results show the various channels through which the distrust in local institutions affects people's WTP between two cities. For one city, the distrust in local institutions significantly increases the probability of one protesting the new program, which results in an underestimation of WTP by 16%. For the other city, the distrust in local institutions leads to a lower estimation of WTP by 26%, mostly via the determination function.

Keywords: Public distrust; Contingent valuation; Protest; Selection bias; WTP determination (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1043951X20300213
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:61:y:2020:i:c:s1043951x20300213

DOI: 10.1016/j.chieco.2020.101424

Access Statistics for this article

China Economic Review is currently edited by B.M. Fleisher, K. X. D. Huang, M.E. Lovely, Y. Wen, X. Zhang and X. Zhu

More articles in China Economic Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().