Three reasons to use annual payments in contingent valuation surveys: Convergent validity, discount rates, and mental accounting

A-Tier
Journal: Journal of Environmental Economics and Management
Year: 2015
Volume: 72
Issue: C
Pages: 123-136

Authors (3)

Egan, Kevin J. (University of Toledo) Corrigan, Jay R. (not in RePEc) Dwyer, Daryl F. (not in RePEc)

Score contribution per author:

1.341 = (α=2.01 / 3 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We present three arguments for using ongoing annual payments in contingent valuation (CV) surveys that estimate the benefit of a long-lasting environmental improvement. First, by matching the duration of the payments with the duration of the environmental benefits, survey respondents are spared from performing complicated present value calculations. Second, willingness to pay (WTP) estimates from CV surveys that include ongoing annual payments best match WTP estimates obtained using travel cost surveys. Third, respondents are less likely to face binding mental budget constraints with ongoing annual payments than with a larger one-time payment. In addition, respondents’ discount rates may be estimated by collecting non-hypothetical, individual time preference data as part of the valuation survey.

Technical Details

RePEc Handle
repec:eee:jeeman:v:72:y:2015:i:c:p:123-136
Journal Field
Environment
Author Count
3
Added to Database
2026-01-25