A mixed approach to payment certainty calibration in discrete choice welfare estimation

Roy Brouwer ()

Applied Economics, 2011, vol. 43, issue 17, 2129-2142

Abstract: This article provides further empirical evidence of payment uncertainty in dichotomous choice (DC) Contingent Valuation (CV) and proposes an alternative way of certainty calibration, moving away from conventional recoding of uncertain responses. In an international CV application, the main sources of payment uncertainty are identified related to imperfect knowledge and information about the public good involved, future supply levels, income constraints, price levels and the survey instrument. Together these sources of uncertainty are responsible for a third of the error variance in the estimated discrete choice model. Accounting for the heterogeneity induced by payment uncertainty in the welfare estimation procedure with the help of a mixed probit model yields a significantly lower welfare measure albeit at the expense of estimation precision.

Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/00036840903035977 (text/html)
Access to full text is restricted to subscribers.

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:taf:applec:v:43:y:2011:i:17:p:2129-2142

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036840903035977

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().