Protest Bidders in Contingent Valuation

Protest bids are often excluded during analysis of contingent valuation method data. It is suggested that this procedure might introduce significant bias. Protest bids are often registered by respondents who may actually place ahigher-orlower-than-average value on the commodity in question but refuse to pay on the basis of ethical or other reasons. Exclusion of protest bids may therefore bias willingness to pay (WTP) results, but the direction of bias is indeterminate a priori.

Issues in Pesticide Policy: Discussion

Two issues lurk in the background of the papers by Lichtenberg, Taylor, and Cropper et al. The first is a specific question about the goal of regulatory policy. The second is a more global consideration regarding politics, technological change, and the future.

Alternative Approaches to Pesticide Regulation

Pesticide regulation has become a topic of increasing interest in recent years, owing to rising public concerns about residues on foods, in drinking-water wells, and damage to wildlife. Public-opinion polls and political responses to incidents like the controversy over Alar suggest that demand for government intervention to protect public health and the environment from pesticides is high. Pesticides are toxic by design; survey evidence indicates that they are perceived as riskier than other, more common pollutants like auto exhaust (see, for example, Horowitz). Pesticide residues are not easily observable (short of laboratory analysis), making averting strategies by individuals extremely difficult and/or excessively costly to implement.

Comparing Models for Contingent Valuation Surveys: Statistical Efficiency and the Precision of Benefit Estimates

This paper empirically tested the three conditions identified by McConnell for equivalence of the linear utility difference model and the valuation function approach to dichotomous choice contingent valuation. Using a contingent valuation survey for deer hunting in California, two of the three conditions were violated. Even though the models are not simple linear transforms of each other for this survey, estimates of mean willingness to pay and their associated 95% confidence intervals around the mean were quite similar for the valuation methods.

Consumer Demand Analysis According to GARP

The nonparametric approach to consumer-demand analysis—based on revealed-preference axioms—is reviewed. Particular attention is paid to questions of size and power of tests for consistency of data with the existence of a stable, well-behaved utility function that could have generated the data. An application to Australian meat demand is used to show how these notions can be quantified and how prior information about elasticities, following Sakong and Hayes, may be used to increase the power of the approach.