Does a Third Bound Help? Parametric and Nonparametric Welfare Measure from a Cv Interval Data Study

Fondazione Eni Enrico Mattei Working Paper No. 51.98

35 Pages Posted: 11 Sep 1998

See all articles by Riccardo Scarpa

Riccardo Scarpa

University of Waikato - Management School

Ian Bateman

University College London - Centre for Social and Economic Research on the Global Environment (CSERGE)

Abstract

Positive response density estimation from CV interval data affords efficiency gains which must be weighed against the risk of introducing potential bias during questions iteration. This study examines the effect of a eliciting a third response on a set of often-used welfare measures derived in a conventional parametric setting. It then compares these with distribution-free nonparametric estimates. A third bound increases censoring probability, introduces welfare estimates sensitivity to inclusion of a theoretically relevant covariate such as wealth which also affects efficiency gains. This might well introduce complications that outweigh the expected efficiency gain. This empirical finding supports and complements previous results obtained via simulation.

JEL Classification: C14, C15, H49

Suggested Citation

Scarpa, Riccardo and Bateman, Ian, Does a Third Bound Help? Parametric and Nonparametric Welfare Measure from a Cv Interval Data Study. Fondazione Eni Enrico Mattei Working Paper No. 51.98, Available at SSRN: https://ssrn.com/abstract=124192 or http://dx.doi.org/10.2139/ssrn.124192

Riccardo Scarpa (Contact Author)

University of Waikato - Management School ( email )

Hamilton
New Zealand

Ian Bateman

University College London - Centre for Social and Economic Research on the Global Environment (CSERGE)

School of Environmental Studies
University of East Anglia
Norwich
United Kingdom
Not Available (Phone)
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