Pick a number, but not just any number: valuation uncertainty and maximum willingness to pay

Abstract

Empirical results suggest that contingent valuation method (CVM) respondents are uncertain of their valuations, which has led critics of the method to raise issues about its validity. Alternative approaches to resolve the problem have been proposed, involving different willingness to pay (WTP) response formats allowing respondents to explicitly express uncertainty. This paper compares differences between certain and uncertain responses for four different response formats. The results suggested that mean and median (WTP) were not significantly different for respondents who were certain about their valuations. This was generally not the case for respondents who were uncertain about their valuations. However, the median WTP was not found to be significantly different for uncertain and certain respondents. A conclusion for a standard CVM application is that the sample median WTP value could serve as a proxy measure of population maximum mean WTP when uncertainty has been removed.

Published in

Journal of Environmental Economics and Policy
2017, volume: 6, number: 3, pages: 283-304

SLU Authors

• Boman, Mattias

  • Southern Swedish Forest Research Centre, Swedish University of Agricultural Sciences
    
  • University of West Indies

• Ellingson, Lindsey

  • Western Governors University

UKÄ Subject classification

Forest Science
Economics

Publication identifier

• DOI: https://doi.org/10.1080/21606544.2017.1296380

Permanent link to this page (URI)

https://res.slu.se/id/publ/92428