Income Treatment Effects in Contingent Valuation: The Case of the Swedish Predator Policy

This paper provides case study evidence on two relevant issues in estimating the relationship between WTP and income using contingent valuation: (1) the choice of income measure; and (2) the modelling choice. Addressing these issues, a sensitivity analysis is performed on a dataset concerning implementation of the Swedish predator policy. The results show that the estimated income-elasticity of WTP varies between 0.12 and 0.40 for the models estimated. The main conclusion drawn from the analysis is that controlling for the number of adults in the household is important for finding a significant income effect, when the household income measure is used. Besides this finding the empirical analysis finds little support for the hypothesis that the choice of income measure and modelling assumptions significantly influence the overall model fit.