Fat tails and truncated bids in contingent valuation: An application to an endangered shorebird species

George Parsons and Kelley Myers

Ecological Economics, 2016, vol. 129, issue C, 210-219

Abstract: A yes-response function in a contingent valuation study is said to have fat tails if it has a high and slowly declining yes-response rate at high bid levels. Truncated bids refer to the practice of dropping high bid offers before a yes-response rate of near zero is reached. This is a common practice in contingent valuation. We explore the extent and implications of fat tails and truncated bids in a study of an endangered shorebird species. We find, among other things, that mean willingness to pay is quite sensitive to the highest bid offered – so much so that the choice of highest bid nearly dictates outcomes.

Keywords: Contingent valuation; Fat tails; Truncated bids; Shorebirds (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (23)

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Chapter: Fat tails and truncated bids in contingent valuation: an application to an endangered shorebird species (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:129:y:2016:i:c:p:210-219

DOI: 10.1016/j.ecolecon.2016.06.010

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