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Payment Certainty in Discrete Choice Contingent Valuation Responses: Results from a Field Validity Test
Author(s) -
Vossler Christian A.,
Ethier Robert G.,
Poe Gregory L.,
Welsh Michael P.
Publication year - 2003
Publication title -
southern economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 58
eISSN - 2325-8012
pISSN - 0038-4038
DOI - 10.1002/j.2325-8012.2003.tb00538.x
Subject(s) - contingent valuation , certainty , valuation (finance) , econometrics , economics , payment , variance (accounting) , discrete choice , willingness to pay , actuarial science , mathematics , microeconomics , geometry , finance , accounting
Two methods for calibrating discrete choice contingent valuation responses—the dichotomous choice with follow‐up certainty question method of Champ et al. (1997) and the multiple‐bounded method of Welsh and Poe (1998)—are evaluated using data from a field validity comparison of hypothetical and actual participation decisions in a green electricity pricing program. Both calibration methods can produce hypothetical participation levels that closely correspond with actual program participation rates. However, the two methods demonstrate procedural variance as they yield significantly different underlying distributions of willingness to pay.