The Effect of Protest Votes on the Estimates of Willingness to Pay for Use Values of Recreational Sites

32 Pages Posted: 12 Dec 2001

See all articles by Elisabetta Strazzera

Elisabetta Strazzera

Universita di Cagliari

Margarita Genius

University of Crete

Riccardo Scarpa

University of Waikato - Management School

W. George Hutchinson

Queen's University Belfast

Date Written: December 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.

Keywords: Contingent valuation, protest responses, sample selection, MLE, two-steps method

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

Suggested Citation

Strazzera, Elisabetta and Genius, Margarita and Scarpa, Riccardo and Hutchinson, W. George, The Effect of Protest Votes on the Estimates of Willingness to Pay for Use Values of Recreational Sites (December 2001). FEEM Working Paper No. 97.2001. Available at SSRN: https://ssrn.com/abstract=293695 or http://dx.doi.org/10.2139/ssrn.293695

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)

Margarita Genius

University of Crete ( email )

GR-74100 Rethymnon, GR-74100
Greece

Riccardo Scarpa

University of Waikato - Management School ( email )

Hamilton
New Zealand

W. George Hutchinson

Queen's University Belfast ( email )

David Leir Building
Belfast, BT9 5AG
Ireland

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