The Effect of Uncertainty on Contingent Valuation Estimates: A Comparison

We examine the impact of uncertainty on contingent valuation responses using (1) a survey of Canadian landowners about willingness to accept compensation for converting cropland to forestry and (2) a survey of Swedish residents about willingness to pay for forest conservation. Five approaches from the literature for incorporating respondent uncertainty are used and compared to the traditional RUM model with assumed certainty. The results indicate that incorporating uncertainty has the potential to increase fit, but could introduce additional variance. While some methods for uncertainty are an improvement over traditional approaches, we caution against systematic judgments about the effect of uncertainty on contingent valuation responses.

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Working or Discussion Paper
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JEL Codes:
Q10; Q15; Q23
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REPA Working Paper

 Record created 2017-04-01, last modified 2020-10-28

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