Realism Versus Statistical Efficiency: A Note on Contingent Valuation with Follow-up Queries

This paper shows that we can improve the statistical efficiency of dichotomous choice contingent valuation surveys by asking a second open question (anchored open-ended approach) instead of the traditional double-bounded approach. The former approach is shown to be more efficient than conventional single and double-bounded approaches using a Monte Carlo experiment, even when we allow for strategic behavior from respondents such as protest votes and yea-saying behavior.