Modelling Zero Bids in Contingent Valuation Surveys

26 Pages Posted: 19 Nov 2000

See all articles by Elisabetta Strazzera

Elisabetta Strazzera

Universita di Cagliari

Riccardo Scarpa

University of Waikato - Management School

Pinuccia Calia

Universita di Cagliari - Department of Economics

Guy Garrod

Centre for Rural economy, Newcastle University

Kenneth G. Willis

CREAM, Centre for Research on Environmental Appraisal & Management, UK; University of Newcastle

Date Written: July 2000

Abstract

When modelling data generated from a discrete choice contingent valuation question, the treatment of zero bids affects the welfare estimates. Zero bids may come from respondents who are not interested in the provision of the public good; alternatively, some zero-bidders may be protesting about the valuation exercise, but hold positive values for the good. In this paper we investigate the effect of different levels of information on zero-bidders on welfare estimates for the population. We find that different strategies of identification may have non-trivial effects. We recommend use of full debriefing questions for zero-bidders, and use of sample selection models to correct for bias caused by protest behaviour.

Keywords: contingent valuation, zero bids, protest votes, selectivity bias, sample selection model, survey design

JEL Classification: C35, C51, C81, D60, H41, Q26

Suggested Citation

Strazzera, Elisabetta and Scarpa, Riccardo and Calia, Pinuccia and Garrod, Guy and Willis, Kenneth G., Modelling Zero Bids in Contingent Valuation Surveys (July 2000). FEEM Working Paper No. 55.2000. Available at SSRN: https://ssrn.com/abstract=237421 or http://dx.doi.org/10.2139/ssrn.237421

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)

Riccardo Scarpa

University of Waikato - Management School ( email )

Hamilton
New Zealand

Pinuccia Calia

Universita di Cagliari - Department of Economics ( email )

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

Guy Garrod

Centre for Rural economy, Newcastle University ( email )

United Kingdom

Kenneth G. Willis

CREAM, Centre for Research on Environmental Appraisal & Management, UK ( email )

University of Newcastle
NE1 7RU Newcastle Upon Tyne
United Kingdom

University of Newcastle

5 Barrack Road
Devonshire Building
NE1 7RU Newcastle upon Tyne, NE1 7RU
United Kingdom

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