Item non-response on income and wealth questions

This study investigates the mechanisms determining item nonresponse focusing on three issues: First, is there significant heterogeneity in item non-response across financial questions and in the association of covariates with item non-response across outcomes? Second, can the informational value of surveys be improved by matching interviewers and respondents based on their characteristics? Third, how does offering a “don’t know” answer option affect respondent behavior? The questions are answered based on detailed survey and interviewer data from the German Socioeconomic Panel using a broad set of income and wealth outcomes. We find considerable heterogeneity in non-response across financial items, little explanatory power of interviewer-respondent matches and strong evidence that ‘‘don’t know’’ answers result from mechanisms that differ from those yielding valid responses and outright refusals to respond.     

Cutting the costs of attrition: Results from the Indonesia Family Life Survey

Attrition is the Achilles heel of longitudinal surveys. Drawing on our experience in the Indonesia Family Life Survey (IFLS), we describe survey design and field strategies that contributed to minimizing attrition over four waves of the survey. The data are used to illustrate the selectivity of respondents who attrit from the survey and, also the selectivity of respondents who move from the place they were interviewed at baseline and are subsequently interviewed in a new location. The results provide insights into the nature of selection that will arise in studies that fail to track and interview movers. Attrition, and types of attrition, are related in complex ways to a broad array of characteristics measured at baseline. In addition, the evidence suggests attrition may be related to characteristics that are not observed in our baseline. Integrating IFLS with data from a Survey of Surveyors, we describe characteristics of both the interviewers and the interview that predict attrition in later waves. These characteristics point to possible strategies that may reduce levels of attrition and may also reduce the impact of attrition on the interpretation of behavioral models estimated with longitudinal data.     

A Meta-study Investigating the Sources of Protest Behaviour in Stated Preference Surveys

It is a well-known empirical finding that some percentage of respondents participating in Stated Preference surveys will not give responses that reflect their true preferences. One reason is protest behaviour. If the distribution of protest responses is not independent of respondent or survey characteristics, then simply expelling protesters from surveys can lead to sample selection bias. Furthermore, WTP estimates will not be comparable across surveys. This paper seeks to explore potential causes of protest behaviour through a meta-study based on full datasets from 38 different surveys. The objective of the study is to examine the effect of respondent specific variables as well as survey specific variables on protest behaviour. Our results suggest that some of the differences in WTP typically observed between different demographic groups, different elicitation formats and different question formats might actually be attributed to inherent differences in the propensity to protest. Our results indicate that the propensity for respondents to exhibit protest behaviour when asked a stated preference type valuation question depends on a number of specific factors, respondent specific as well as survey specific—knowledge which could be used in order to reduce protest behaviour.     

Contingent valuation: A new perspective

After several decades of academic research on the contingent valuation (CV) method a consistent behavioral explanation of ‘hypothetical bias’ is still lacking. Based on evidence from economics, economic psychology and the political sciences, I propose an explanation that is based on two simple working hypotheses about respondent behavior in contingent valuation surveys. The first hypothesis is that survey respondents are unable to form consistent preferences about unfamiliar goods unless the choice context offers reliable, informative cues which can be rationally exploited in simplified heuristics. The second hypothesis is that the probability and impact of strategic responses in dichotomous-choice questions about public goods depends on the extent to which the presented hypothetical costs differ from the actual costs. The literature on hypothetical bias is revisited in the light of these behavioral hypotheses. I find that the hypotheses are generally supported by the empirical data. Moreover, the hypotheses are able to explain several important empirical phenomena that previous research has not been able to explain. In particular, they solve the puzzle that pre-election polls, but not CV surveys, are able to predict actual referendum outcomes, and they explain why income effects on willingness to pay are lower in CV responses than in actual votes. If confirmed by further studies, the hypotheses will have important implications for future research and practice. First, the hypothetical costs presented in the dichotomous-choice question should to be close enough to the actual costs to be credible to all respondents. This can be achieved by specifying the costs as a percentage (rather than absolute) change in taxes. Second, the respondents should be given the option to answer based on information about the positions of large parties and interest groups with known political orientation rather than based on the raw policy information. Theory and evidence suggest that this new survey paradigm largely eliminates the fundamental problems of the conventional stated preference methods.     

The role of interviewer encounters in panel responses on life satisfaction

This note examines a common explanation why participants of panel surveys may report declining life satisfaction over time. In line with the argument of developing trust relationships between interviewers and interviewees, the analysis reveals positive effects in reported life satisfaction when the person conducting the interview changes to an unfamiliar individual. Yet, the evidence also shows that the overall decline is determined by years in the panel, rather than by number of encounters with one specific interviewer.     

Users and non-users of conservation areas: Are there differences in WTP,motives and the validity of responses in CVM surveys?

It is commonly assumed that respondents' lack of familiarity with the valued resource causes invalid and unreliable responses in contingent valuation surveys. With non-users' valuations, mainly motivated by non-use values, the issue is also closely linked to the discussion of the measurement of non-use values. This paper re-examines the impact of previous use on respondents' willingness to support nature conservation, their motives for valuing the resource and the validity of responses. The users' and non-users' characteristics differed, but there was no difference between the groups in their willingness to support sustained conservation. However, those planning to visit the area in the near future were more likely to pay for conservation than other respondents, even if they did not have previous use experience. Users considered their income constraint somewhat more carefully and were more aware of conservation-related issues than non-users. However, there was no difference in the validity of the WTP responses of the groups. Thus, there seems to be no rationale from a point of view of validity to restrict CVM analysis only to those individuals who have previous experience of the resource, which is in line with the basic premise of CVM. Furthermore, non-use values remained as significant motives for valuing the resource even if the use of the resource was intensive. Therefore, if the existence of a large non-use value component is considered as problematic in general, the problem is likely to exist for all respondent groups and not only for non-users.     

Construct Validity of Dichotomous and Polychotomous Choice Contingent Valuation Questions

In this note we conduct construct validity tests for dichotomous choice (DC) and polychotomous choice (PC) contingent valuation questions. Contrary to previous results, we find that DC and PC estimates of willingness to pay are theoretically valid, convergent valid, and similar in terms of statistical precision. Similar to previous results, PC respondents are less sensitive to information than DC respondents. We conclude that DC and PC valuation questions are construct valid for this study. Sequential PC valuation questions could be used in studies where obtaining information about the certainty or intensity of respondent preferences would be useful.     

NONPARAMETRIC SURVEY RESPONSE ERRORS*

I present nonparametric methods to identify and estimate the biases associated with response errors. When applied to survey data, these methods can be used to analyze how observable and unobservable characteristics of the respondent, and characteristics of the design of the survey, affect errors in the responses. This provides a method to correct the biases that those errors generate, by using the estimated response errors to “undo” those biases. The results are useful also to design better surveys, since they point at characteristics of the design and of subpopulations of respondents that can provide identification of response errors. Several models are considered.     

Comparison of Internet and interview survey modes when estimating willingness to pay using choice experiments

With the increasing use of the Internet as a survey mode, questions of mode effects and how potential effects influence inferences arise. Using a choice experiment combined with mixed logit estimation, willingness-to-pays (WTPs) for attributes are compared between the Internet mode and the more traditional interview survey mode. The results suggest that there are differences in WTP between the two survey models for three of four attributes. Furthermore, WTPs obtained from the interview survey are larger than the WTPs obtained from the Internet survey, suggesting potential social desirability behaviour by the interview respondents. Internet surveys involving sensitive issues may be desirable because of potential social desirability behaviour.     

Choosing Between Internet and Mail Survey Modes for Choice Experiment Surveys Considering Non-Market Goods

In a choice experiment setup considering a non-market good, this paper adds to the literature on survey mode effects by providing evidence that internet surveys can be a viable alternative to traditional mail surveys when gathering feedback from a sample of respondents. The case study concerns preferences for protecting different types of landscape from road encroachment when building new motorways in Denmark. Two samples of respondents are surveyed—one by internet and one by mail. The performances of the two samples are compared over six different criteria; response rates, protest responses, demographics, preferences and WTP, estimation precision, and, finally, certainty in choice. Differences are observed for some of these criteria, implying that analysts should be aware that choosing internet over mail could be accompanied by a survey mode effect. However, the observed differences do not translate into significant differences in the unconditional WTP estimates. In most applied economic valuation studies of non-market goods, the main objective is in fact estimation of WTP. Hence, in the present case, the identified survey mode effects do not severely invalidate the applicability and continued use of the internet as a suitable means of collecting data for choice experiment economic valuation of non-market goods.     

Respondent direct experience and contingent willingness to pay for new commodities: a switching endogenous interval regression analysis

Most environmental economists argue that direct experience with the good being valuated, or with similar goods, is a precondition for providing valid willingness to pay (WTP) responses to contingent valuation questions. Two questions are posed in this article. The first is whether previous use experience of a resource (Séné nature reserve) similar to that being valuated (future nature reserves) and located in the same geographical area (Gulf of Morbihan) impacts on WTP. The second is whether accounting for the endogeneity of direct experience matters in the estimation of WTP. We find that respondents who have not experienced the Séné nature reserve provide value estimates that are statistically comparable to that of respondents who have experienced it. Our assumption is that respondents have acquired sufficient and adequate experience of future nature reserves from the questionnaire that experience obtained by experiencing the Séné nature reserve was not necessary for making a valid value formulation. Hence, aggregation of WTP estimates to obtain a total valuation of the future nature reserves is reasonable over the full target population. In addition, our results show that direct experience is endogenously determined; but controlling for the endogeneity has a marginal effect on WTP estimates.     

Ordering effects in contingent valuation surveys

This paper focuses on ordering effects in CVM surveys; how the expressed value of a particular good valued in a sequence of several goods depends on where in the sequence the good is valued. We use data from a Norwegian CVM survey focusing on WTP for a 50% reduction in air pollution from car traffic to test for the existence of ordering effects and to apply a test for internal consistency. We found considerable and significant ordering effects in our data, but were not able to reject the hypothesis of internal consistency. Based on our survey, we argue that ordering effects may be a result of rational choice. These effects are problematic if a sequential valuation procedure is applied to a simultaneous problem, and/or the respondents are given imperfect information about the decision problem.     

Are Internet surveys an alternative to face-to-face interviews in contingent valuation?

Internet is an increasingly popular data collection mode for stated preference research in environmental economics. However, little is known about how this survey mode may influence data quality and welfare estimates. As part of a national contingent valuation (CV) survey estimating willingness to pay (WTP) for biodiversity protection plans, we assign two groups of respondents either to an Internet or face-to-face (in-home) interview mode. Our design aims to better isolate measurement effects from sample composition effects by drawing both samples from the same sample frame. We find little evidence of social desirability bias in the interview setting or satisficing (shortcutting the response process) in the Internet survey. The share of “don't knows”, zeros and protest responses to the WTP question with a payment card is very similar between modes and equality of mean WTP cannot be rejected. Results are fairly encouraging for the use of Internet in CV as stated preferences do not seem to be significantly different or biased compared to face-to-face interviews.     

The impact of the bird flu on public willingness to pay for the protection of migratory birds

In this paper, we present the results of a unique time series analysis of contingent values and models for migratory bird protection based on an identical contingent valuation (CV) survey carried out over a three year time period since the first bird flu outbreak in 2003. Although there exists no scientific evidence for a direct relationship, migratory birds are believed to play an important role in spreading the bird flu virus worldwide. The time series analysis allows us to test the temporal stability of stated preferences for migratory bird protection and at the same time examine indirectly the possible impact of increased media attention and public awareness levels regarding the bird flu. We test the impact of the bird flu on public willingness to pay (WTP) for migratory bird protection in the final 2005 survey whilst accounting for procedural variance introduced by sequencing and question ordering-effects, but we are unable to demonstrate a direct negative relationship. A novelty of the study presented here is that respondents in the CV surveys are given the opportunity to pay an annual money amount or a one-time-off lump-sum. Annual WTP values appear to be significantly higher than one-time-off WTP values, suggesting a negative implicit discount rate. Self-selection bias is an important reason for the observed differences. We find that respondents who agree to pay annually differ significantly from respondents who wish to pay a lump-sum in terms of their underlying preferences and motivations towards migratory bird protection.     

Valuation of the ecosystem services: A psycho-cultural perspective

Valuation of ecosystems services has been a challenging issue for economists. There is a growing concern to capture the total and incremental changes in services of different types of ecosystems, mainly, due to perturbations arising from anthropogenic activities. Market-based valuation techniques have long been declared inadequate and a constructed market method such as the contingent valuation method albeit a robust tool does not seem to capture the expanse, nuances, and intricacies of many of the ecosystem services. The paper attempts to address the lacunae in valuation of ecosystem services from a psychological perspective by arguing that the common person's perception of the ecosystem is quite different from what is conceptualized by conventional economists. The paper shows how the ecological identity of individuals is revealed at various levels of the decision-making hierarchy that is, from local to regional and further onto a global level. The paper builds upon insights from psychoanalytic psychology and environmental-psychology. Further, it outlines recent research findings from experimental psychology to redefine concepts such as ecological identity, self-other dichotomy, and the fostering of identification with nature, as issues that must be embraced in the valuation of ecosystem services. Extending the idea of relational goods and reciprocity, the paper offers a deconstructed view of market forces and furthers the idea of interdisciplinary collaboration and cooperation in the valuation of ecosystem services. In this perspective the dichotomy and schism between markets, missing markets and non-markets, gets renovated and reconstructed beyond a utilitarian discourse.     

Bid Design Effects in Multiple Bounded Discrete Choice Contingent Valuation

A potential concern in multiple bounded discrete choice contingent valuation surveys – where the respondent is asked to express voting certainty, rather than a simple yes or no, on a large number of payment amounts (bids) – is whether responses are influenced by the particular position of bids in the bid-voting panel rather than solely on the respondents willingness to pay (WTP). For instance, respondents may systematically state they would pay the first few bid amounts and not pay all subsequent bids – regardless of the actual dollar values. Such systematic bid design effects would suggest that this method does not provide a valid measure of WTP. Using a split-sample survey, we compare responses to three different bid arrays that have an identical minimum bid, maximum bid, and number of bids. Using nonparametric estimation techniques, we find that estimated WTP distributions and corresponding welfare measures are not statistically different across survey samples.     

Use of damage schedules in environmental valuation: The case of urban Singapore

Increasing concerns over environmental degradation have amplified the role of environmental economics and the valuation of non-pecuniary environmental resources as tools of analysis to facilitate the design of policies. To date, however, environmental valuation methods have continued to be unreliable, misleading and contentious as a guide to resource allocations and damage compensations. In this paper, a damage schedule is developed based on the scales of relative importance translated from people's judgments about values of various environmental damages or losses. The variance stable rank method is applied to the paired comparison responses to obtain the scale values as well as the importance of rankings. Statistical tests of significance are used to determine the level of the agreement among the survey respondents and the degree of correspondence between different respondent groups. This will determine the number of relative importance scales required to adequately represent the responses from all respondents. The scales of relative importance will then be translated into damage schedules. The setting for analysis is based on urban Singapore.