Bid Design Effects in Multiple Bounded Discrete Choice Contingent Valuation

Christian Vossler, Gregory Poe, P. Welsh and Robert Ethier

Environmental & Resource Economics, 2004, vol. 29, issue 4, 418 pages

Abstract: A potential concern in “multiple bounded discrete choice” contingent valuation surveys – where the respondent is asked to express voting certainty, rather than a simple yes or no, on a large number of payment amounts (bids) – is whether responses are influenced by the particular position of bids in the bid-voting panel rather than solely on the respondent’s willingness to pay (WTP). For instance, respondents may systematically state they would pay the first few bid amounts and not pay all subsequent bids – regardless of the actual dollar values. Such systematic bid design effects would suggest that this method does not provide a valid measure of WTP. Using a split-sample survey, we compare responses to three different bid arrays that have an identical minimum bid, maximum bid, and number of bids. Using nonparametric estimation techniques, we find that estimated WTP distributions and corresponding welfare measures are not statistically different across survey samples. Copyright Kluwer Academic Publishers 2004

Keywords: bid design effects; contingent valuation; nonparametric estimation; validity tests (search for similar items in EconPapers)
Date: 2004
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DOI: 10.1007/s10640-004-9457-2

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