Valuation of Environmental Goods: Correcting for Bias in Contingent Valuation Studies Based on Willingness-to-Accept

Bishwanath Goldar and Smita Misra

American Journal of Agricultural Economics, 2001, vol. 83, issue 1, 150-156

Abstract: The willingness-to-accept (WTA) measure of value is often subject to a systematic, large bias, making it unsuitable for use in contingent valuation studies. However, for the valuation of environmental goods, in many cases WTA rather than the willingness-to-pay (WTP) is the relevant measure. The paper proposes that, by using a composite-error model for the estimation of the valuation function, a correction can be made for the bias in reported WTA. To illustrate the proposed methodology, it is applied to the data of the Brookshire-Coursey (1987) study of alternative tree density in Troutman Park, Fort Collins. Copyright 2001, Oxford University Press.

Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:83:y:2001:i:1:p:150-156

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