Incorporating zero and missing responses into CVM with open-ended bidding: Willingness to pay for blue skies in Beijing

Xiaohua Yu, David Abler

Research output: Contribution to journalArticle

29 Citations (Scopus)

Abstract

Based on decision theory, this paper suggests a four-hurdle model to deal with zero and missing responses in the contingent valuation method with open-ended bidding, which is used to analyze the willingness to pay for blue skies in Beijing where air pollution is known to be very serious. The mean and the median of the predicted willingness to pay for blue skies per household are, respectively, 120.15 and 128.60 yuan, less than 0.2% of the per capita annual disposal income in Beijing. This is very low compared to results from studies of other countries. The empirical results also indicate that the four-hurdle model is superior to the Tobit model and raw data estimation.

Original languageEnglish (US)
Pages (from-to)535-556
Number of pages22
JournalEnvironment and Development Economics
Volume15
Issue number5
DOIs
StatePublished - Oct 1 2010

Fingerprint

willingness to pay
decision theory
contingent valuation
air pollution
atmospheric pollution
income
Willingness-to-pay
Bidding
Beijing
Hurdle model
Median
Income
Air pollution
Disposal
Empirical results
Household
Contingent valuation method
Tobit model
Decision theory

All Science Journal Classification (ASJC) codes

  • Development
  • Environmental Science(all)
  • Economics and Econometrics

Cite this

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abstract = "Based on decision theory, this paper suggests a four-hurdle model to deal with zero and missing responses in the contingent valuation method with open-ended bidding, which is used to analyze the willingness to pay for blue skies in Beijing where air pollution is known to be very serious. The mean and the median of the predicted willingness to pay for blue skies per household are, respectively, 120.15 and 128.60 yuan, less than 0.2{\%} of the per capita annual disposal income in Beijing. This is very low compared to results from studies of other countries. The empirical results also indicate that the four-hurdle model is superior to the Tobit model and raw data estimation.",
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AB - Based on decision theory, this paper suggests a four-hurdle model to deal with zero and missing responses in the contingent valuation method with open-ended bidding, which is used to analyze the willingness to pay for blue skies in Beijing where air pollution is known to be very serious. The mean and the median of the predicted willingness to pay for blue skies per household are, respectively, 120.15 and 128.60 yuan, less than 0.2% of the per capita annual disposal income in Beijing. This is very low compared to results from studies of other countries. The empirical results also indicate that the four-hurdle model is superior to the Tobit model and raw data estimation.

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