Fat tails and truncated bids in contingent valuation: An application to an endangered shorebird species

Details

• Journal Title:
  Ecological Economics
• Personal Author:
  Parsons, George R. ; Myers, Kelley
• NOAA Program & Office:
  OAR (Oceanic and Atmospheric Research)
• Description:
  A yes-response function in a contingent valuation study is said to have fat tails if it has a high and slowly declining yes-response rate at high bid levels. Truncated bids refer to the practice of dropping high bid offers before a yes-response rate of near zero is reached. This is a common practice in contingent valuation. We explore the extent and implications of fat tails and truncated bids in a study of an endangered shorebird species. We find, among other things, that mean willingness to pay is quite sensitive to the highest bid offered – so much so that the choice of highest bid nearly dictates outcomes.
• Keywords:
  Economics And Econometrics General Environmental Science Economics And Econometrics Economics And Econometrics
• Source:
  Ecological Economics, 129, 210-219
• DOI:
  https://doi.org/10.1016/j.ecolecon.2016.06.010
• ISSN:
  0921-8009
• Format:
  PDF
• Publisher:
  Elsevier BV
• Document Type:
  Journal Article
• Funding:
  Grant no. NA05OAR4171041 ; Grant no. NA10OAR4170084
• Rights Information:
  Accepted Manuscript
• Compliance:
  Library
• Main Document Checksum:
  urn:sha256:41a1c29e24bf3747f1ac1b756696afa6c8a96d21cd26484c3b7817168638d4aa
• Download URL:
  https://repository.library.noaa.gov/view/noaa/57854/noaa_57854_DS1.pdf
• File Type:
  [PDF - 1.46 MB ]