A new approach for analyzing multiple bounded WTP data - Certainty dependent payment card intervals

Thomas Broberg ()
Additional contact information
Thomas Broberg: Department of Economics, Umeå University, Postal: S 901 87 Umeå, Sweden

No 714, Umeå Economic Studies from Umeå University, Department of Economics

Abstract: In this paper we analyze the multiple-bounded (MB) format in which uncertainty is directly incorporated into the WTP question. We introduce a new approach to estimate mean and median willingness to pay (WTP) using MB data by allowing respondents to expand their WTP intervals by shifting their upper bound. Thus, less certain respondents will state a wider WTP interval. This differs from the Welsh and Poe (1998) approach (WP) which shifts the entire WTP interval and likely overestimates mean and median WTP when uncertainty is introduced. To compare empirically our expansion approach to the WP-approach, we use survey data from 2004 that elicited WTP for implementation of a predator protection policy in Sweden. In addition to its more intuitive appeal, our results indicate that the interval expansion approach better fits the data and provides a smaller range of estimated WTP. It also with better precision estimates the mean and median WTP when preference uncertainty is considered, and its estimates are less sensitive to alternative distributional assumptions.

Keywords: contingent valuation; preference uncertainty; elicitation format; multiple-bounded; payment card; willingness to pay; predators (search for similar items in EconPapers)
JEL-codes: C81 Q20 Q26 Q28 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2007-06-07
New Economics Papers: this item is included in nep-ecm and nep-env
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.econ.umu.se/DownloadAsset.action?conten ... Id=3&assetKey=ues714 (application/pdf)

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:hhs:umnees:0714

Access Statistics for this paper

More papers in Umeå Economic Studies from Umeå University, Department of Economics Department of Economics, Umeå University, S-901 87 Umeå, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by David Skog ().