Overcoming Hypothetical Bias in Dichotomous Choice Contingent Valuation Studies: Some Preliminary Results
نویسنده
چکیده
Contingent Valuation studies, in which respondents are presented with a hypothetical choice, can be prone to hypothetical bias as respondents could overstate their willingness to pay. The purpose of this paper is to present a method to detect hypothetical bias in the single bound dichotomous choice model. The method borrows the tools from the stochastic frontier model, as in the case of Hofler and List (2004) for open ended auctions, and applies them to the dichotomous choice case. The cumulative distribution function of the resulting composed error term is approximated using the results of Tsay et. al.,(2013). Some preliminary simulation results are presented and the method is applied to a study of willingness to accept (WTA) for the establishment of a wind park in South Rethymno, Crete.
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