A Spatial Probit Modeling Approach to Account for Spatial Spillover Effects in Dicotomous Choice Contingent Valuation Surveys

We present a demonstration of a Bayesian spatial probit model for a dichotomous choice contingent valuation method willingness-to-pay (WTP) questions. If voting behavior is spatially correlated, spatial interdependence exists within the data, and standard probit models will result in biased and inconsistent estimated nonbid coefficients. Adjusting sample WTP to population WTP requires unbiased estimates of the nonbid coefficients, and we find a $17 difference in populationWTP per household in a standard vs. spatial model. We conclude that failure to correctly model spatial dependence can lead to differences in WTP estimates with potentially important policy ramifications.


Editor(s):
Marchant, Mary A.
Bosch, Darrell J.
Issue Date:
2013-02
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/143663
Published in:
Journal of Agricultural and Applied Economics, Volume 45, Number 1
Page range:
53-63
Total Pages:
11
JEL Codes:
C11; Q51




 Record created 2017-04-01, last modified 2017-08-26

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