Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/167688
Authors: 
Whitehead, John Claiborne
Year of Publication: 
2017
Series/Report no.: 
Economics Discussion Papers 2017-55
Abstract: 
Desvousges, Mathews and Train (2015) find that their contingent valuation method (CVM) survey data does not pass the adding up test using a nonparametric estimate of mean willingness-to-pay. Their data suffers from non-monotocity, flat bid curve and fat tails problems, each of which can cause willingness-to-pay estimates to be sensitive to the approach chosen to measure the central tendency. Using additional parametric approaches that are standard in the literature, I find that willingness to pay for the whole is not statistically different from the sum of the parts in two of three additional estimates. In additional robustness checks, all six of the additional tests find that the WTP estimates do not reject the adding up hypothesis. The negative result in Desvousges, Mathews and Train (2015) is not robust to these alternative approaches to willingness-to-pay estimation.
Subjects: 
contingent valuation
adding up test
willingness-to-pay
JEL: 
Q51
Creative Commons License: 
http://creativecommons.org/licenses/by/4.0/
Document Type: 
Working Paper

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