Hostname: page-component-cd9895bd7-jn8rn Total loading time: 0 Render date: 2024-12-18T14:47:59.588Z Has data issue: false hasContentIssue false
  • English
  • Français

The Provision Point Mechanism and Scenario Rejection in Contingent Valuation

Published online by Cambridge University Press:  15 September 2016

Peter A. Groothuis  and
John C. Whitehead
Peter A. Groothuis
Affiliation:
Department of Economics at Appalachian State University in Boone, North Carolina
John C. Whitehead
Affiliation:
Department of Economics at Appalachian State University in Boone, North Carolina
Get access Rights & Permissions [Opens in a new window]

Abstract

The provision point mechanism mitigates free-riding behavior in economic experiments. In two contingent valuation method surveys, we implement the provision point design. We ask respondents for their perceptions about the success of the provision point mechanism. We find that respondents who believe that the provision point would not be met are more likely to say no to a contingent valuation dichotomous choice question. The scenario rejection that arises may result in biased willingness-to-pay estimates.

Keywords

provision point mechanismcontingent valuationwillingness to paypublic goods
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 38 , Issue 2 , October 2009 , pp. 271 - 280
Copyright
Copyright © 2009 Northeastern Agricultural and Resource Economics Association 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Bagnoli, M., and Lipman, B.L. 1989. “Provision of Public Goods: Fully Implementing the Core Through Private Contributions.” Review of Economic Studies 56(4): 583–601.CrossRefGoogle Scholar
Bagnoli, M., and McKee, M. 1991. “Voluntary Contribution Games: Efficient Private Provision of Public Goods.” Economic Inquiry 29(2): 351–366.CrossRefGoogle Scholar
Cadsby, C.B., and Maynes, E. 1999. “Voluntary Provision of Threshold Public Goods with Continuous Contributions: Experimental Evidence.” Journal of Public Economics 71(1): 53–73.CrossRefGoogle Scholar
Cameron, T.A. 1991. “Interval Estimates of Non-Market Resource Values from Referendum Contingent Valuation Surveys.” Land Economics 67(2): 413–421.CrossRefGoogle Scholar
Cameron, T.A., and James, M.D. 1987. “Efficient Estimation Methods for ‘Closed-Ended’ Contingent Valuation Surveys.” Review of Economics and Statistics 68(2): 269–276.CrossRefGoogle Scholar
Carson, R.T., and Groves, T. 2007. “Incentive and Informational Properties of Preference Questions.” Environmental and Resource Economics 37(1): 181–210.CrossRefGoogle Scholar
Caudill, S.B., and Groothuis, P.A. 2005. “Modeling Hidden Alternatives in Random Utility Models: An Application to ‘Don't Know’ Responses in Contingent Valuation.” Land Economics 81(3): 445–454.CrossRefGoogle Scholar
Champ, P.A., and Bishop, R.C. 2001. “Donation Payment Mechanisms and Contingent Valuation: An Empirical Study of Hypothetical Bias.” Environmental and Resource Economics 19(4): 383–402.CrossRefGoogle Scholar
Champ, P., Flores, N.E., Brown, T.C., and Chivers, J. 2002. “Contingent Valuation and Incentives.” Land Economics 78(4): 591–604.CrossRefGoogle Scholar
Clinch, J., and Murphy, A. 2001. “Modelling Winners and Losers in Contingent Valuation of Public Goods: Appropriate Welfare Measures and Econometric Analysis.” Economic Journal 111(470): 420–443.CrossRefGoogle Scholar
Desvousges, W.H., Smith, V.K., and Fisher, A. 1983. “Estimates of the Option Values for Water Quality Improvements.” Economics Letters 13(1): 81–86.Google Scholar
Groothuis, P.A., and Whitehead, J.C. 2002. “Does ‘Don't Know’ Mean No? Analysis of Don't Know Responses in Dichotomous Choice Contingent Valuation Questions.” Applied Economics 34(15): 1935–1940.CrossRefGoogle Scholar
Halstead, J.M., Luloff, A.E., and Stevens, T. 1992. “Protest Bidders in Contingent Valuation.” Northeastern Journal of Agricultural and Resource Economics 21(2): 160–169.CrossRefGoogle Scholar
Marks, M.B., and Croson, R. 1998. “Alternative Rebate Rules in the Provision of a Threshold Public Good: An Experimental Investigation.” Journal of Public Economics 67(2): 195–220.CrossRefGoogle Scholar
Messer, K.D., Kaiser, H.M., and Schmidt, T. 2005. “Optimal Institutional Mechanisms for Funding Generic Advertising.” American Journal of Agricultural Economics 87(4): 1046–1060.CrossRefGoogle Scholar
Mitchell, R.C., and Carson, R.T. 1989. “Using Surveys to Value Public Goods: The Contingent Valuation Method.” Resources for the Future, Washington, D.C. Google Scholar
Norwood, F.B., Winn, C., Chung, C., and Ward, C.E. 2006. “Designing a Voluntary Beef Checkoff.” Journal of Agricultural and Resource Economics 31(1): 74–92.Google Scholar
Poe, G.L., Clark, J.E., Rondeau, D., and Schulze, W.D. 2002. “Provision Point Mechanisms and Field Validity Tests of Contingent Valuation.” Environmental and Resource Economics 23(4): 105–131.CrossRefGoogle Scholar
Rondeau, D., Poe, G.L., and Schulze, W.D. 2005. “PPM or VCM?: A Comparison of the Marginal Effects and Efficiency of the Provision Point and Voluntary Contributions Mechanisms.” Journal of Public Economics 89(8): 1581–1592.CrossRefGoogle Scholar
Rondeau, D., Schulze, W.D., and Poe, G.L. 1999. “Voluntary Revelation of the Demand for Public Goods Using a Provision Point Mechanism.” Journal of Public Economics 72(2): 455–470.CrossRefGoogle Scholar
Rose, S.K., Clark, J., Poe, G.L., Rondeau, D., and Schulze, W.D. 2002. “The Private Provision of Public Goods: Tests of a Provision Point Mechanism for Funding Green Power Programs.” Resource and Energy Economics 24(1/2): 131–155.CrossRefGoogle Scholar
Whitehead, J.C., and Cherry, T.L. 2007. “Mitigating the Hypothetical Bias of Willingness to Pay: A Comparison of Ex-Ante and Ex-Post Approaches.” Resource and Energy Economics 29: 247–261.CrossRefGoogle Scholar
Whitehead, J.C., Groothuis, P.A., Southwick, R., and Foster-Turley, P. Forthcoming. “Measuring the Economic Benefits of Saginaw Bay Coastal Marsh with Revealed and Stated Preference Methods” Journal of Great Lakes Research.Google Scholar