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The Effect of Protest Votes on the Estimates of Willingness to Pay for Use Values of Recreational SitesElisabetta StrazzeraUniversita di Cagliari Margarita GeniusUniversity of Crete Riccardo ScarpaUniversity of Waikato - Management School W. George HutchinsonQueen's University Belfast December 2001 FEEM Working Paper No. 97.2001 Abstract: Selectivity bias caused by protest responses in Contingent Valuation studies can be detected and corrected by means of sample selection models. This paper compares two methods: the Heckman 2-steps method and the full ML, applied to data on forest recreation - where WTP is elicited as a continuous variable. Either method has its own drawback: computational complexity for the ML method, susceptibility to collinearity problems for the 2-steps method. The latter problem is observed in our best fitting specification, with the ML estimator outperforming the 2-steps. In this application, overlooking the effect of protest responses would cause an upwards bias of the final estimates of WTP.
Number of Pages in PDF File: 32 Keywords: Contingent valuation, protest responses, sample selection, MLE, two-steps method JEL Classification: C35, C51, C81, D60, H41, Q26 working papers seriesDate posted: December 12, 2001Suggested CitationContact Information
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