Protesting and Justifying: A Latent Class Model for Contingent Valuation with Attitudinal Data

Abstract

This article develops a latent class model for estimating willingness-to-pay (WTP) for public goods using simultaneously contingent valuation (CV) and attitudinal data to identify individuals with similar characteristics, such as WTP and protest attitudes. We find evidence that the answer to the CV question influences the responses to the attitudinal questions. In our case, this influence reflects rational behavior (budget constraint issues) and justification biases related to protest reasons, such as lack of trust in institutions or fairness issues with respect to the distribution of the burden of preservation. The results from our empirical application confirm the importance of accounting for those biases.

This is a preview of subscription content, log in to check access.

References

  1. Au D, Crossley TF, Schellhorn M (2005) The effect of health changes and long-term health on the work activity of older Canadians. Health Econ 10: 999–1018

    Article  Google Scholar 

  2. Bateman I, Carson R, Day B, Hanemann M, Hanley N, Hett T, Jones-Lee M, Loomes G, Mourato S, Ozdemiroglu E, Pearce D, Sugden R, Swanson J (2002) Economic valuation with stated-preference techniques.. Edward Elgar, Cheltenham

    Google Scholar 

  3. Ben-Akiva M, Walker J, Bernardino A, Gopinath D, Morikawa T, Polydoropoulou A (2002) Integration of choice and latent variable models. In: Mahmassani H (eds) In perpetual motion: travel behaviour research opportunities and application challenges. Elsevier Science, Amsterdam, 431–470

    Google Scholar 

  4. Bestard A, Riera Font A, Hicks R (2010) Combining discrete and continuous representations of preference heterogeneity: a latent-class approach. Environ Resour Econ 47(4): 477–493

    Article  Google Scholar 

  5. Bollen KA (1989) Structural equations with latent variables. Wiley, New York

    Google Scholar 

  6. Bonnichsen O, Ladenburg J (2009) Using an ex-ante entreatry to reduce protest zero bias in stated preference surveys: a health economic case. J Choice Model 2(2): 83–98

    Google Scholar 

  7. Bound J (1991) Self-reported versus objective measures of health in retirement models. J Hum Resour 26: 106–138

    Article  Google Scholar 

  8. Bonnichsen O, Ladenburg J (2010) Reducing status-quo bias in choice experiments: an application to a protest reduction entreatry. FOI working paper, no. 7, Institute of Food and Resource Economics, LIFE, University of Copenhagen

  9. Breffle W, Morey E, Thacher J (2011) A joint latent class model: combining likert-scale preference statements with choice data to harvest preference heterogeneity. Environ Resour Econ 50: 83–110

    Article  Google Scholar 

  10. Brouwer R, Martin-Ortega J (forthcoming) Modeling self-censoring of polluter pays protest votes in stated preference research to support resource damage estimations in environmental liability. Resour Energy Econ

  11. Calia P, Strazzera E (2001) A sample selection model for protest votes in contingent valuation studies. Statistica 61(3): 473–485

    Google Scholar 

  12. Cameron A, Trivedi P (2005) Microeconometrics: methods and applications. Cambridge University Press, Cambridge and New York

    Google Scholar 

  13. Carson R, Groves T (2007) Incentive and informational properties of preference questions. Environ Resour Econ 31: 181–210

    Article  Google Scholar 

  14. Carson R, Mitchell R, Hanemann M, Kopp R, Presser S, Ruud P (2003) Contingent valuation and lost passive use: damages from the Exxon Valdez oil spill. Environ Resour Econ 25: 257–286

    Article  Google Scholar 

  15. Dempster AP, Laird NM, Rubin DB (1977) Maximum likelihood from incomplete data via the EM algorithm. J R Stat Soc Ser B 39: 1–38

    Google Scholar 

  16. Dziegielewska D, Mendelsohn R (2007) Does “No” means “No”? A protest methodology. Environ Resour Econ 38: 71–87

    Article  Google Scholar 

  17. Gradstein M (2008) Institutional traps and economic growth. Int Econ Rev 49: 1043–1066

    Article  Google Scholar 

  18. Haab T, McConnell K (2002) Valuing environmental and natural resources. Edward Elgar, UK

    Google Scholar 

  19. Herriges J, Kling C, Liu C-C-C, Tobias J (2010) What are the consequences of consequentiality?. J Environ Econ Manage 59(1): 67–81

    Article  Google Scholar 

  20. Jakobsson K, Dragun A (2001) The worth of a possum: valuing species with the contingent valuation method. Environ Resour Econ 19: 211–227

    Article  Google Scholar 

  21. Jorgensen B, Syme G, Bishop B (1999) Nancarrow B protest responses in contingent valuation. Environ Resour Econ 14(1): 131–150

    Article  Google Scholar 

  22. Jorgensen B, Syme G (2000) Protest responses and willingness to pay: attitude toward paying for storm water pollution abatement. Ecol Econ 33(2): 251–265

    Article  Google Scholar 

  23. Kaufmann D, Kraay A, Mastruzzi M (2005) Governance matters IV: governance responses to the attitudinal questions for 1996–2004. mimeo, World Bank, Washington

    Google Scholar 

  24. Lo Y, Mendell NR, Rubin DB (2001) Testing the number of components in a normal mixture. Biometrika 88: 767–778

    Article  Google Scholar 

  25. Martin-López B, Montes C, Benayas J (2007) Influence of user characteristics on valuation of ecosystem services in Donana natural protected Area (south-west Spain). Environ Conserv 34(3): 215–224

    Article  Google Scholar 

  26. McLachlan GJ, Peel D (2000) Finite mixture models. Wiley, New York

    Google Scholar 

  27. Meyerhoff J, Liebe U (2006) Protest responses in contingent valuation: explaining their motivation. Ecol Econ 57: 583–594

    Article  Google Scholar 

  28. Meyerhoff J, Bartczak A, Liebe U (2009) Identifying various types of protesters in contingent valuation using latent class analysis. Working paper on Management in Environmental Planning 27/200

  29. Meyerhoff J, Liebe U (2008) Do protest responses to a contingent valuation question and a choice experiment differ?. Environ Resour Econ 39: 433–446

    Article  Google Scholar 

  30. Meyerhoff J, Liebe U (2009) Status-quo effects in choice experiments: empirical evidence on attitudes and choice task complexity?. Land Econ 85(3): 515–528

    Google Scholar 

  31. Meyerhoff J, Liebe U (2010) Determinants of protest responses in environmental valuation: a meta-study. Ecol Econ 70: 366–374

    Article  Google Scholar 

  32. Mitchell RC, Carson RT (1989) Using surveys to value public goods: the contingent valuation method. Resources for the Future, Washington

    Google Scholar 

  33. Morey E, Thacher J, Breffle W (2006) Using angler characteristics and attitudinal data to identify environmental preference classes: a latent-class model. Environ Resour Econ 34: 91–115

    Article  Google Scholar 

  34. Morey E, Thiene M, De Salvo M, Signorello G (2008) Using attitudinal data to identify latent classes that vary in their preference for landscape preservation. Ecol Econ 68: 536–546

    Article  Google Scholar 

  35. Morkbak MR, Olsen S, Meyerhoff J (2010) A meta-study investigating the sources of protest behavior in stated preference surveys. Paper presented at the 4th World Congress of Environmental and Resource Economists, Montreal, Canada

  36. Polydoropoulou A, Gopinath D, Ben-Akiva M (1997) Willingness to pay for advanced traveler information system. Transp Res Record 1588: 44–48

    Article  Google Scholar 

  37. Morrison M, Blamey R, Bennett J (2000) Minimizing payment vehicle bias in contingent valuation studies. Environ Resour Econ 16: 407–422

    Article  Google Scholar 

  38. Provencher B, Baerenklau K, Bishop R (2002) A finite mixture logit model of recreational angling with serially correlated random utility. Am J Agric Econ 844: 1066–1075

    Article  Google Scholar 

  39. Scarpa R, Thiene M (2005) Destination choice models for rock climbing in the north-east alpes: a latent class approach based on a intensity of participation. Land Econ 81(3): 426–444

    Google Scholar 

  40. Scarpa R, Beharry-Borg N (2010) Valuing quality changes in Caribbean coastal waters for heterogeneous beach visitors. Ecol Econ 69: 1124–1139

    Article  Google Scholar 

  41. Scarpa R, Gilbride TJ, Campbell D, Hensher DA (2009) Modelling attribute non-attendance in choice experiments for rural landscape valuation. Eur Rev Agric Econ 36(2): 151–174

    Article  Google Scholar 

  42. Soderqvist T (1998) Why give up money for the Baltic Sea?. Environ Resour Econ 12: 249–254

    Article  Google Scholar 

  43. Strazzera E, Genius M, Scarpa R, Hutchinson G (2003) The effect of protest votes on the estimates of WTP for use values of recreational sites. Environ Resour Econ 25: 461–476

    Article  Google Scholar 

  44. Walker J, Li J (2007) Latent lifestyle preferences and household location decisions. J Geograph Syst 9(1): 77–101

    Article  Google Scholar 

  45. Whitehead J, Groothuis P, Blomquist G (1993) Testing for non-response and sample selection bias in contingent valuation. Econ Lett 41: 215–220

    Article  Google Scholar 

Download references

Author information

Affiliations

Authors

Corresponding author

Correspondence to Maria A. Cunha-e-Sá.

Additional information

We gratefully acknowledge the comments by all anonymous referees that helped to improve the paper.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Cunha-e-Sá, M.A., Madureira, L., Nunes, L.C. et al. Protesting and Justifying: A Latent Class Model for Contingent Valuation with Attitudinal Data. Environ Resource Econ 52, 531–548 (2012). https://doi.org/10.1007/s10640-011-9541-3

Download citation

Keywords

  • Contingent valuation
  • Attitudinal data
  • Latent class model
  • Protest responses
  • Justification bias

JEL Classification

  • C35
  • C85
  • Q51