Interval bidding in a distribution elicitation format. Issue 51 (2nd November 2017)

• Record Type: Journal Article
• Authors: Mahieu, Pierre-Alexandre; Wolff, François-Charles; Shogren, Jason; Gastineau, Pascal
• Is Part Of: Applied economics. Volume 49:Issue 51(2017)
• Page Start: 5200
• Page End: 5211
• Publication Date: 2017-11-02
• Subjects: Contingent valuation -- uncertainty -- distribution format -- bears -- feasible generalized least squares; C5 -- Q51; Economics -- Periodicals; 330
• DOI: 10.1080/00036846.2017.1302065
• Languages: English
• ISSNs: 0003-6846

Abstract

ABSTRACT: Interval bidding allows people to report a range of values for a non-market good. Herein, we allow people to choose their distribution over this range endogenously. We consider a multiplicative error model explaining the willingness to pay (WTP) which is estimated using a feasible generalized least squares estimator. We apply our framework to a representative sample of the French population who were asked about the valuation of a bear conservation programme. We find that most participants prefer stating their WTP as a range rather than a point, but the shape of the distribution greatly varies across people. Our results support the use of the interval bidding with endogenous distribution approach in valuation studies.