Scandinavian Working Papers in Economics

Umeå Economic Studies,
Umeå University, Department of Economics

No 517: Economics without markets. Four papers on the Contingent Valuation and Stated Preference Methods

Maria Vredin Johansson ()
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Maria Vredin Johansson: Department of Economics, Umeå University, Postal: S 901 87 Umeå, Sweden

Abstract: This thesis consists of four papers. The first two papers deal with the valuation of an endangered species, the African elephant. The third paper is on the assessment of attribute values for work trips. The fourth paper models the number of alternative travel modes for work trips. Paper [I] reports benefit estimates from a Contingent Valuation (CV) survey of Swedish households' willingness to pay (WTP) for the preservation of the African elephant. Methodological aspects of the CV method are addressed, such as the method's susceptibility to variations in the payment vehicle and in the time-horizon of the payment obligation. None of the treatments have significant impact on the WTP. Paper [II] analyses determinants of the WTP from Paper [I]. A double hurdle model for household choice is formulated where the household first decides whether to give to elephant protection or not and, then, decides on the size of the donation. The model is estimated with Heckman's two-step estimator. With one exception, the determinants significant for the decision to give are not the same as the ones significant for the decision on how much to give. Paper [III] uses stated preference data to estimate the values of time and safety for work trips. In standard and random parameters logit models the respondent's modal choice is related to the perceived time, cost, safety, and environmental friendliness or flexibility of the alternatives. The perceived time, cost and safety are shown to significantly affect the choice of work trip travel mode. From the estimated models we assess attribute values for time and safety. Paper [IV] estimates two count data models, an ordinary Poisson and a polynomial Poisson of order one (PP1), to explain the individual's number of alternative travel modes for work trips. The PP1 model, which allows for departures from equidispersed data, cannot improve the Poisson model. The individual's income and the distance to the workplace are found to affect the number of alternative travel modes for work trips.

Keywords: Intertemporal Embedding; Discrete/Continuous Choice; Value of Statistical Life; Value of Time; Random Parameters Logit; Count Data; Choice Set Size

JEL-codes: D61; D64; H40; Q26

138 pages, December 15, 1999

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