Internal and external scope in willingness-to-pay estimates for threatened and endangered wildlife

Giraud, Kelly L.; Loomis, John B.; Johnson, Richard L.

doi:10.1006/jema.1999.0277

Cited by 57 publications

(34 citation statements)

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“…This type of validity is often assessed by regressing SP values on characteristics of the good being valued and characteristics of the respondent. A specific type of test for construct validity is a scope test, which evaluates whether WTP is sensitive to how much of the good is being offered (e.g., Giraud et al, 1999). Since, CE studies involve estimating a valuation function that depends upon attributes related to the good or service being valued, scope sensitivity in CE is assessed internally by evaluating the signs and significance of parameters to ensure consistency with economic theory.…”

Section: Non-market Valuation Methodsmentioning

confidence: 99%

Willingness to pay for threatened and endangered marine species: a review of the literature and prospects for policy use

Lew

2015

Front. Mar. Sci.

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Non-market valuation methods have been employed to estimate willingness to pay for numerous threatened, endangered, and rare (TER) species over the past few decades. While most of these efforts have focused on terrestrial species, over 30 published studies have been conducted to measure economic values associated with the preservation, protection, and enhancement of scores of marine species. In this paper, this literature is reviewed and assessed, and an evaluation of the suitability of existing TER species values as inputs for the analysis of marine and coastal policies, and the prospects and challenges for improving them, are discussed. The published literature is found to suffer from coverage issues, both geographical and in terms of species types. It includes stated preference valuation studies focused on marine species only in developed countries (United States, Canada, Australia, United Kingdom, Spain, and Greece), with the highest concentration of studies occurring in the United States. The species valued primarily can be classified as charismatic megafauna-seals and sea lions, whales, and sea turtles-plus well-known fish species, like salmon. Only a small handful of lesser known species are included among those valued to date. Species value estimates were as much as $356 (2013 U.S. dollars), but differed in the frequency of payments (e.g., lump sum vs. annual), the entity paying (e.g., household, resident, or visitor), and the specific good being valued (e.g., species preservation or a type of enhancement). Potential sources of errors arising from the use of these values for policy analyses, and the temporal stability of them, provide reasons to be cautious in their application. Nevertheless, several trends in the literature appear to provide reasons to be optimistic about the literature, particularly the recent expansion of types of species valued and more policy-relevant values.

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Section: Non-market Valuation Methodsmentioning

confidence: 99%

Willingness to pay for threatened and endangered marine species: a review of the literature and prospects for policy use

Lew

2015

Front. Mar. Sci.

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“…While some studies have demonstrated scope sensitivity (e.g., Carson and Mitchell, 1993;Smith and Osborne, 1996;Carson, 1997;Smith, Zhang and Palmquist, 1999), others have not (e.g., Diamond et al 1993;Boyle et al, 1994;Schkade and Payne, 1994;Beattie et al, 1998;Hammitt and Graham, 1999), while still others show that it is possible to observe scope sensitivity and scope insensitivity within the same study (Loomis, Lockwood and DeLacey, 1993;Rollins and Lyke, 1998;Schulze et al, 1998;Giraud, Loomis and Johnson, 1999;Bateman et al, 2004;Heberlein et al, 2005 3 ). This variety of findings has given ample support to both supporters and critics of CV.…”

Section: Consistency Versus Construction: the Scope Sensitivity Testmentioning

confidence: 99%

Consistency and construction in stated WTP for health risk reductions: A novel scope-sensitivity test

Bateman¹,

Brouwer²

2006

Resource and Energy Economics

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“…They find sensitivity to scope at lower levels of provision of the good and lack of sensitivity at higher levels of provision, as theory suggests due to diminishing marginal value. Giraud et al (1999) find that their study passes a "strong" external (i.e., split-sample) scope test but not a "weak" internal (i.e., paired comparison) test. Whitehead and Cherry (2007) investigate different empirical models with alternative hypothetical bias correction methods and find that some specifications exhibit sensitivity to scope while others do not.…”

Section: Plausibility and The Adding Up Testmentioning

confidence: 87%

Plausible responsiveness to scope in contingent valuation

Whitehead

2016

Ecological Economics

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Plausible responsiveness to scope is a question of economic significance, in addition to statistical significance, of the scope test in contingent valuation. We briefly review the history of the scope test in order to place the current issue in the context of the BP Deepwater Horizon oil spill. As a result of the review we gain insights into how the issue of scope "adequacy" arose twenty years after it was first mentioned by the NOAA Panel on Contingent Valuation following the Exxon Valdez oil spill. We then provide a review of Desvousges, Mathews and Train (2012) who promote the adding-up test to identify inadequate responsiveness to scope adequacy. The adding-up test is a test of the construct validity of the contingent valuation method but is flawed as a measure of economic significance. We propose scope elasticity of willingness-to-pay as a measure of economic significance. A simulation suggests a likely range of elasticity estimates given linear and quadratic functional forms for the willingness-to-pay function. In order to illustrate the ease of implementation of scope elasticity within the context of the standard scope test we calculate scope elasticity with willingness-to-pay estimates from several studies, describe two studies that directly estimate scope elasticity and estimate scope elasticity with primary data from two studies. All of these empirical estimates of scope elasticity fall within the range of scope elasticity suggested by the simulation. Scope elasticity provides a practical way forward, relative to the adding up test, on the issue of economic significance of scope effects. t r a c tPlausible responsiveness to scope is a question of economic significance, in addition to statistical significance, of the scope test in contingent valuation. We briefly review the history of the scope test in order to place the current issue in the context of the BP Deepwater Horizon oil spill. As a result of the review we gain insights into how the issue of scope "adequacy" arose twenty years after it was first mentioned by the NOAA Panel on Contingent Valuation following the Exxon Valdez oil spill. We then provide a review of Desvousges, Mathews and Train (2012) who promote the adding-up test to identify inadequate responsiveness to scope adequacy. The adding-up test is a test of the construct validity of the contingent valuation method but is flawed as a measure of economic significance. We propose scope elasticity of willingness-to-pay as a measure of economic significance. A simulation suggests a likely range of elasticity estimates given linear and quadratic functional forms for the willingness-to-pay function. In order to illustrate the ease of implementation of scope elasticity within the context of the standard scope test we calculate scope elasticity with willingness-to-pay estimates from several studies, describe two studies that directly estimate scope elasticity and estimate scope elasticity with primary data from two studies. All of these empirical estimates of scope elasticity fall with...

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Internal and external scope in willingness-to-pay estimates for threatened and endangered wildlife

Cited by 57 publications

References 1 publication

Willingness to pay for threatened and endangered marine species: a review of the literature and prospects for policy use

Willingness to pay for threatened and endangered marine species: a review of the literature and prospects for policy use

Consistency and construction in stated WTP for health risk reductions: A novel scope-sensitivity test

Plausible responsiveness to scope in contingent valuation

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