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CVM Embedding Effects When There Are Active, Potentially Active and Passive Users of Environmental Goods

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Abstract

Embedding is said to occur when thewillingness-to-pay (WTP) values for a gooddiffer according to whether the good is valuedon its own or as part of a package of goods. Itcan manifest itself as a question order orsequencing effect whereby the WTP for a gooddepends upon the order in which contingentvaluation questions are asked. Usingsplit-sample data from different questionorderings of a survey administered to a generalpopulation, the willingness-to-pay values forimprovements to three recreational activities(swimming, fishing, and boating in HamiltonHarbour, Ontario, Canada) are estimated. Respondents are divided into three types ofuser groups: active users, potentially activeusers, and passive users. The paper thenexamines the extent to which embedding in theform of different question sequences affectseach of these three user types. Severalarguments are put forward to suggest whypassive users might be more susceptible toquestion order than active users. The resultssupport the hypothesis that order effects arelikely to be larger for passive users and alsoshow that potentially active users may beaffected by question order to a greater extentthan active users. This highlights theimportance of considering context when usingmultiple-question CVM to value passive usegoods.

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  1. Department of Economics, Brock University, 415 Taro Hall, St. Catharines, Ontario, L2S 3A1, Canada

    Diane P. Dupont

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Dupont, D.P. CVM Embedding Effects When There Are Active, Potentially Active and Passive Users of Environmental Goods. Environmental and Resource Economics 25, 319–341 (2003). https://doi.org/10.1023/A:1024446110640

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