One-and-One-Half-Bound Dichotomous Choice Contingent Valuation

Abstract

Although the double-bound (DB) format for the discrete choice contingent valuation method (CVM) has the benefit of higher efficiency in welfare benefit estimates than the single-bound (SB) discrete choice CVM, it has been subject to criticism due to evidence that some of the responses to the second bid may be inconsistent with the responses to the first bid. As a means to reduce the potential for response bias on the follow-up bid in multiple-bound discrete choice formats such as the DB model while maintaining much of the efficiency gains of the multiple-bound approach, we introduce the one-and-one-half-bound (OOHB) approach and present a real-world application. In a laboratory setting, despite the fact that the OOHB model uses less information than the DB approach, the efficiency gains in moving from SB to OOHB capture a large portion of the gain associated with moving from SB to DB. Utilizing distribution-free seminonparametric estimation techniques on a split-survey data set, our OOHB estimates demonstrated higher consistency with respect to the follow-up data than the DB estimates and were more efficient as well. Hence, OOHB may serve as a viable alternative to the DB format in situations where follow-up response bias may be a concern. © 2002 President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Public Value of Enforcing the PM2.5 Concentration Reduction Policy in South Korean Urban Areas

“…The double-bounded (DB) DC method, which requires two WTP questions, may suffer from the response bias. As an alternative, Cooper et al [32] contrived a one-and-one-half-bounded (OOHB) DC method. It can produce more efficient result than the SB DC method and cause less response bias than the DB DC method.…”

“…Cooper et al [32] proposed an approach to model the OOHB DC CV data. A j is defined as a bid presented to respondent j.…”

Socio-economic reason to save an international wetland

“…The most widely used approach to elicit information about respondents' WTP is the dichotomous choice CVM (DC-CVM) format (Cooper et al 2002). In 1979, Bishop and Heberlein were the first who introduced this approach to estimate the economic value of non-market goods (Cooper et al 2002;Wattage et al 2000).…”

“…In 1979, Bishop and Heberlein were the first who introduced this approach to estimate the economic value of non-market goods (Cooper et al 2002;Wattage et al 2000). The DC-CVM then obtained popularity with more developments especially by Hanemann (1984) and Cameron (1988) (Araña and León 2005).…”

A Common Nomenclature for Stated Preference Elicitation Approaches

“…The distinction between this approach and the BGAME elicitation technique become blurred as step size decreases and the number of questions asked increases. Difficulties with the independence of response assumption typically made for the DBBC elicitation method, particularly on the down side, have led to proposals for a one-and-a-half bound approach whereby only respondents who say yes initially asked about their willingness to pay a higher amount (Cooper et al 2002;Bateman et al 2009). …”