Bias and Efficiency of Single vs Double Bound Models for Contingent Valuation Studies: A Monte Carlo Analysis

Fondazione Eni Enrico Mattei Working Paper No. 10.99

30 Pages Posted: 8 Apr 1999

See all articles by Pinuccia Calia

Pinuccia Calia

Universita di Cagliari - Department of Economics

Elisabetta Strazzera

Universita di Cagliari

Abstract

The Dichotomous Choice Contingent Valuation Method can be used either in the single or double bound formulation. The former is easier to implement, while the latter is known to be more efficient. We analyse the bias of the ML estimates produced by either model, and the gain in efficiency associated to the double bound model, in different experimental settings. We find that there are no relevant differences in point estimates given by the two models, even for small sample size, and no estimator can be said to be less biased than the other. The greater efficiency of the double bound is confirmed, although differences tend to reduce by increasing the sample size. Provided that a reliable pre-test is conducted, and the sample size is large, use of the single rather than the double bound model is warranted.

JEL Classification: C15, C35, D60, H41, Q26

Suggested Citation

Calia, Pinuccia and Strazzera, Elisabetta, Bias and Efficiency of Single vs Double Bound Models for Contingent Valuation Studies: A Monte Carlo Analysis. Fondazione Eni Enrico Mattei Working Paper No. 10.99. Available at SSRN: https://ssrn.com/abstract=158412 or http://dx.doi.org/10.2139/ssrn.158412

Pinuccia Calia

Universita di Cagliari - Department of Economics ( email )

V. S. Ignazio 17
Cagliari 09123, CA 09123
Italy

Elisabetta Strazzera (Contact Author)

Universita di Cagliari ( email )

CRENOS and DRES Via Fra Ignazio, 78
I-09123 Cagliari
Italy
+39 070 675 3763 (Phone)
+39 070 675 3760 (Fax)

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