TY - JOUR

T1 - Accounting protesting and warm glow bidding in Contingent Valuation surveys considering the management of environmental goods

T2 - an empirical case study assessing the value of protecting a Natura 2000 wetland area in Greece

AU - Grammatikopoulou, Ioanna

AU - Olsen, Søren Bøye

PY - 2013

Y1 - 2013

N2 - Based on a Contingent Valuation survey aiming to reveal the willingness to pay (WTP) for conservation of a wetland area in Greece, we show how protest and warm glow motives can be taken into account when modeling WTP. In a sample of more than 300 respondents, we find that 54% of the positive bids are rooted to some extent in warm glow reasoning while 29% of the zero bids can be classified as expressions of protest rather than preferences. In previous studies, warm glow bidders are only rarely identified while protesters are typically identified and excluded from further analysis. We test for selection bias associated with simple removal of both protesters and warm glow bidders in our data. Our findings show that removal of warm glow bidders does not significantly distort WTP whereas we find strong evidence of selection bias associated with removal of protesters. We show how to correct for such selection bias by using a sample selection model. In our empirical sample, using the typical approach of removing protesters from the analysis, the value of protecting the wetland is significantly underestimated by as much as 46% unless correcting for selection bias.

AB - Based on a Contingent Valuation survey aiming to reveal the willingness to pay (WTP) for conservation of a wetland area in Greece, we show how protest and warm glow motives can be taken into account when modeling WTP. In a sample of more than 300 respondents, we find that 54% of the positive bids are rooted to some extent in warm glow reasoning while 29% of the zero bids can be classified as expressions of protest rather than preferences. In previous studies, warm glow bidders are only rarely identified while protesters are typically identified and excluded from further analysis. We test for selection bias associated with simple removal of both protesters and warm glow bidders in our data. Our findings show that removal of warm glow bidders does not significantly distort WTP whereas we find strong evidence of selection bias associated with removal of protesters. We show how to correct for such selection bias by using a sample selection model. In our empirical sample, using the typical approach of removing protesters from the analysis, the value of protecting the wetland is significantly underestimated by as much as 46% unless correcting for selection bias.

UR - http://www.scopus.com/inward/record.url?scp=84884929094&partnerID=8YFLogxK

U2 - 10.1016/j.jenvman.2013.08.054

DO - 10.1016/j.jenvman.2013.08.054

M3 - Journal article

C2 - 24091158

AN - SCOPUS:84884929094

VL - 130

SP - 232

EP - 241

JO - Journal of Environmental Management

JF - Journal of Environmental Management

SN - 0301-4797

ER -