Testing for Misspecification in the Referendum Contingent Valuation Approach

Teofilo Ozuna, Kee Yoon Jang and John R. Stoll

American Journal of Agricultural Economics, 1993, vol. 75, issue 2, 332-338

Abstract: Binary choice models are frequently used in the analysis of referendum contingent valuation data. Because omitted regressors, heteroskedasticity, and distribution asymmetry in these models result in inconsistent parameter estimates, it is important that misspecification tests be undertaken. In this article, conditional moment tests for these problems are presented and applied to data from two referendum contingent valuation studies. Results show that some models have misspecification problems and that these problems affect the estimation of welfare measures.

Date: 1993
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:75:y:1993:i:2:p:332-338.

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