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Compound option valuation formulae give rise to the summation of a series of multinormal distribution functions. This paper presents an identity on sums of nested multinormal distributions of arbitrary dimension. We show that this identity generalizes some well-known low order identities for the multinormal distribution. We present three applications of the new identity to contingent claims valuation problems. The first and second applications show that by reducing significantly the number of integrals to be evaluated, faster and more accurate algorithms can be developed for implementing the Geske-Johnson American put valuation formula and the Roll-Geske-Whaley American call formula; the third gives new economic insights into the valuation of disaggregated coupon bonds. [ABSTRACT FROM AUTHOR]

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The establishment of nature reserves is an important measure to protect the wild population of Chinese alligators. Due to the overlap of nature reserves and human living areas, there is a certain conflict between economic development and ecological protection. How to formulate a feasible eco-compensation scheme and accurately analyze the influencing factors of eco-compensation willingness is of great significance to alleviate the contradiction between local residents and Chinese alligators. In this study, the contingent valuation method (CVM) was used to measure and analyze the residents' willingness to accept (WTA) at National Chinese Alligator Nature Reserve (NCANR) located in Anhui province, China. Furthermore, decision tree modeling and logistic regression were used to analyze the influencing factors of residents' WTA in NCANR, which provides a new insight to the influencing factors of eco-compensation. The results indicate that: (1) 93% of the residents living in NCANR have a WTA compensation, and the amount of WTA is CNY 25,542 (USD 3659.36) per household per year; and (2) individual characteristics, ecological protection cognition and external impact affect the WTA, and external impact on local residents is the most important factor affecting WTA. Therefore, it is necessary to make differential compensation to ensure the fairness of eco-compensation. In addition, the propaganda of eco-compensation should be strengthened, and the boundary of NCANR needs to be further clarified. The sources of funds for eco-compensation are supposed to be broadened, and poverty alleviation can be combined with eco-compensation policies. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to examine urban households' willingness to pay (WTP) for milk safety and to analyze the factors affecting WTP premiums using data obtained from surveys conducted in Samsun and Trabzon provinces, Turkey. Design/methodology/approach: Contingent valuation and censoring methods including the error-dependent bivariate Heckman SS model were used for estimating WTP for milk safety and its effective factors, respectively. Findings: The study indicates that 68 percent of the households were willing to pay 0.35 per liter for improving the safety of milk. The model results show that satisfaction with food safety standards, being married and full-time employment have statistically significant positive effects on the WTP for ISO-certified milk. However, purchasing milk from farmers or open-air markets, age, having a child six-year old or younger, and high school or higher education have statistically significant negative effects on the WTP for ISO-certified milk. Research limitations/implications: The main limitation of the current study is that only urban consumers' WTP and effective factors for milk safety were examined in two provinces of Turkey. Practical implications: More rigorous implementations of food safety standards, traceability systems and effective educational campaigns could promote households' food safety awareness and increase their demand for milk safety. Social implications: Knowing what factors are involved in consumer WTP is extremely important for decision makers to create new social policies in the region or country. Originality/value: A similar study has not been conducted in Turkey. The novelty of this study is the specification and robust estimation of three different but competing models to reveal the wide range of WTP amounts for safe milk. [ABSTRACT FROM AUTHOR]

In Nigeria, human immunodeficiency virus (HIV)/acquired immunodeficiency syndrome treatment and care services, prevention of mother-to-child transmission (PMTCT) inclusive , are accessed free of charge by patients due to finanacial support from donor agencies. This trend may not be sustainable in the future due to the present global economic realities. Hence, there is the need to ascertain the readiness of PMTCT patients to pay for such services. This contingent valuation study determined the willingness-to-accept (WTA), willingness-to-pay (WTP), and WTA-to-WTP ratios of PMTCT services among clients in a Nigerian tertiary hospital. This was a cross-sectional questionnaire-based study. All adult PMTCT patients who had never paid for any component of the services participated in the study. The questionnaire measured their WTP and WTA for the following components of PMTCT: primary prevention of HIV, prevention of unintended pregnancy in HIV-positive women, follow-up treatment and support, and therapeutic interventions around delivery. The WTP and WTA for PMTCT drugs and specialized clinical pharmacy services were also measured. The WTA-to-WTP ratios, income effects, and income elasticity were determined for all services. Questions were posed using Naira (N) ($1 = N250, at the time of the study). Respondents aged 25 to 34 years comprised 80.8% of the population, whereas 80.8% were married. The mean amounts of WTA and WTP for services involving primary prevention of HIV was N543 000 and N18 600, respectively. Its WTA-to-WTP ratio and approximate income effect were 29.19 and -28.19, respectively. These variables were associated with WTP for some services: level of education with PMTCT follow-up treatment and support (P =.046), trimester of pregnancy with primary prevention of HIV (P =.002), correspondent's residence with specialized clinical pharmacy services (P =.003), and time spent to reach facility with primary prevention of HIV (P =.002). All services had high WTP, WTA-to-WTP ratios, and income effects, with inelastic income elasticity coefficients: patients in the Nigerian hospital attribute high value to all PMTCT services. • What is already known about the topic? Drugs for prevention of mother-to-child transmission (PMTCT) and other HIV/AIDS services are provided at no cost to patients in Nigeria. With the global economic crisis that has significantly affected healthcare funding, the current norm may not be sustainable in the near future. • What does the paper add to existing knowledge? Patients in a Nigerian hospital attribute high value to all PMTCT-related services. • What insights does the paper provide for informing healthcare-related decision making? The knowledge of the value that the patients attach to the PMTCT is of importance to all stakeholders involved in the provision of the services. Sponsors will be encouraged to mobilize more resources to finance the services if they know that the beneficiaries attribute a lot of value to the services. [ABSTRACT FROM AUTHOR]

Access to water for domestic and irrigation uses remains limited across Sub-Saharan Africa, particularly in rural areas. While the technical feasibility of implementing innovative technologies to improve water supply has been often evaluated, less is known about the drivers that motivate users to pay for obtaining the inherent benefits of improved water supply. In this article, the determinants of the marginal willingness to pay (mWTP) for improved domestic and irrigation water are investigated. For this purpose, a contingent valuation study is performed in rural Rwanda. This study uses survey data from 316 households situated in 8 villages, in which ~20% of the households receive electricity thanks to microgrids powered by solar energy. It is found that the mWTP for improved domestic water supply is influenced by the proportion of children in the household, business ownership, and satisfaction with water quantity and quality. The mWTP for irrigation is determined by respondent education, business ownership and crop area planted. This paper contributes to the literature by allowing a comparison of the determinants of the mWTP for improved domestic water supply to the determinants of the mWTP for irrigation. Another contribution is to examine the mWTP for improved water infrastructure in partially electrified villages. Identifying areas with high marginal benefits from water can guide infrastructure investment and electrification efforts while improving well-being and increasing revenues in rural areas. [ABSTRACT FROM AUTHOR]

Research question: Monetary valuation of non-market goods has become increasingly important to inform sport managers and policy makers. This article set out to conduct a literature review, describe empirical applications within sports, and present a typology and conceptual discussion of valuation approaches. Research methods: A literature review, synthesis, and critical assessment of existing monetary valuation research in sports were performed. Results and findings: The review identified 113 articles which employed eight different valuation approaches. The contingent valuation method (CVM), hedonic pricing (HP), and the travel cost method (TCM) were the most frequently applied approaches. The most popular research contexts were professional team sports, sport tourism, and sport events. Valuation research was mainly conducted in the United States, Germany, and the UK. Altogether, 179 different scholars have contributed to this body of research, with 15 scholars having published at least three papers on this topic. The valuation approaches were assigned to three main categories: revealed preference approaches, including HP, opportunity cost approach (OCA), replacement cost approach (RCA), compensating variation approach (CVA), and TCM; stated preference approaches, including CVM, contingent behavior method (CBM), and choice modeling (CM); and hybrid approaches combining revealed and stated preference approaches. Implications: Future valuation research should exploit the advantages of hybrid approaches and provide comparisons of monetary values obtained by different valuation approaches. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to assess farmers' willingness to participate and pay for weather-based index insurance in the Upper East Region of Ghana, and what factors influence the participation and purchase of crop insurance schemes. Design/methodology/approach: A survey of 200 farmers in the region was carried out in 2018 to measure demographic information, farm characteristics, risks and risk-management practices and attitudes to crop insurance programs. The survey also captured maximum willingness to pay (WTP) for crop insurance. The double-bounded contingent valuation technique was used to estimate the WTP for crop insurance and the variables that affected WTP. Findings: Farmers, in general, had an indifferent attitude to crop insurance in the region, but were willing to participate in the crop insurance programme, and were willing to pay between 7.5 and 12.5 per cent of the cost of growing maize as a premium for crop insurance. Demographic and economic variables did not impact WTP, but attitude towards crop insurance, farm diversification and frequency of drought negatively impacted on the WTP for crop insurance. Practical implications: Education programs could be undertaken to improve the attitude and understanding towards crop insurance, as some farmers perceived the programme as not trustworthy, and others did not truly understand the operation of the programme. Social implications: Drought can have a significant impact on household welfare, particularly in food insecure countries or regions. Crop insurance can provide a method of securing income for farmers allowing them to purchase food rather than other choices, such as removing children from education to reduce household expenses, improving the long-term welfare of the farm household. Originality/value: This paper considers willingness to participate and WTP for a crop insurance programme in Ghana, it is one of a small number of papers that consider attitude to, and willingness to participate and WTP for crop insurance in developing countries. The value of the research is the expanded understanding of farmer attitude to crop insurance and their lack of knowledge of crop insurance operations. [ABSTRACT FROM AUTHOR]

Economic theory predicts a decrease in valuation as the availability of substitutes increases. This paper describes a contingent valuation (CV) survey that investigates the effect of substitutes on valuation of private market goods. Using an approach that compares willingness to pay (WTP) values elicited from a CV question that accounts for substitutes with WTP values elicited from a similar question without substitutes, we find that allowing for substitutes can moderate WTP values. For the item valued in this study, a hamburger sandwich, allowing for substitutes was associated with a reduction of from 10% to 16% in stated values. [ABSTRACT FROM AUTHOR]

The contingent valuation (CV) method is used to estimate the willingness to pay (WTP) for services and products to inform cost benefit analyses (CBA). A long-standing criticism that stated WTP estimates may be poor indicators of actual WTP, calls into question their validity and the use of such estimates for welfare evaluation, especially in the health sector. Available evidence on the validity of CV studies so far is inconclusive. We systematically reviewed the literature to (1) synthesize the evidence on the criterion validity of WTP/willingness to accept (WTA), (2) undertake a meta-analysis, pooling evidence on the extent of variation between stated and actual WTP values and, (3) explore the reasons for the variation. Eight electronic databases were searched, along with citations and reference reviews. 50 papers detailing 159 comparisons were identified and reviewed using a standard proforma. Two reviewers each were involved in the paper selection, review and data extraction. Meta-analysis was conducted using random effects models for ratios of means and percentage differences separately. Meta-bias was investigated using funnel plots. Hypothetical WTP was on average 3.2 times greater than actual WTP, with a range of 0.7–11.8 and 5.7 (0.0–13.6) for ratios of means and percentage differences respectively. However, key methodological differences between surveys of hypothetical and actual values were found. In the meta-analysis, high levels of heterogeneity existed. The overall effect size for mean summaries was 1.79 (1.56–2.04) and 2.37 (1.93–2.80) for percent summaries. Regression analyses identified mixed results on the influence of the different experimental protocols on the variation between stated and actual WTP values. Results indicating publication bias did not account for differences in study design. The evidence on the criterion validity for CV studies is more mixed than authors are representing because substantial differences in study design between hypothetical and actual WTP/WTA surveys are not accounted for. • The debate on the criterion validity of CV-WTP is a subject of ongoing concern. • The majority of published papers confirm the presence of hypothetical bias. • The assessment of the drivers of criterion validity is largely exploratory. • Estimates reported variedly, limiting analyses and clouds clarity of comparison. • The evidence on the criterion validity of CV-WTP is more mixed than is reported. [ABSTRACT FROM AUTHOR]

The relationship between tourism development and environmental degradation is one of the policy agenda for sustainable tourism. Tourism in protected areas is a complex phenomenon, which brings both positive and negative effects on the environment and local communities. The transition toward forms of sustainable mobility, such as electric boats, allows to reconcile tourist activities with preservation of protected areas, strengthening the links between land use and transport. The aim of this paper has been the investigation tourists' preferences to elicit their willingness to pay for the introduction of electric boat fleet in the Regional Park of Trasimeno Lake, a protected area in Italy, in order to reduce CO2 emissions. Data were collected by means of questionnaires. The impact of uncertainty on contingent valuation responses using three different approaches has been used. Also the effects of pricing CO2 emissions from boating activities have been investigated. The research results show that variables such as sex, age and visits' duration of stay have an impact on the respondents' willingness to pay and the related uncertainty. Considering two electrification options of the fleet, simulation results indicate that both price premiums and a subsidy policy are needed for electric boats deployment. This paper showed the need for public and private authorities to implement instruments including an important role for education to achieve a new tourism model based on natural features and sustainability. • Contingent valuation method contributed to inform protected area decision-making. • Tourism had a significant impact on the natural and man-made environment. • Tourists, on average, were willing to pay price premiums for having electric boats. • High Education level, raising sustainable mobility knowledge, lowered uncertainty. • Educational levels were also significant predictors of the tourists' WTP. [ABSTRACT FROM AUTHOR]

This paper examines the determinants of farmers' willingness-to-accept (WTA) in a hypothetical payment scheme for the adoption of stone and soil bunds in northern Ghana using contingent valuation data from 305 farm households. Bayesian estimation of the interval-data regression model is employed to obtain farmers' WTA and its determinants. Besides farmer and household characteristics, farm characteristics and socioeconomic and institutional variables such as soil fertility and previous participation in conservation projects increase and decrease willingness-to-accept respectively. The results suggest that costs of soil and water conservation payment schemes may be significantly decreased by careful targeting of households more ready to accept compensation. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to examine citizens' willingness to pay (WTP), in relation to having a professional first-tier football club in a medium-sized Danish municipality, when tangible economic benefits such as economic growth and/or inbound migration produced by these are absent. Design/methodology/approach: Using the contingent valuation method on survey respondents, the study examines factors affecting WTP using binary logistic regression and interval regression and further extrapolates the WTP from the sample to the municipal population. Findings: Citizens significantly value having a first-tier football club in their municipality even when tangible benefits are absent, although a large proportion of respondents stated to be against the municipality being financially involved in professional team sports clubs (PTSC). WTP is largely driven by interest in sports and the local football club. It is argued that the findings cannot be generalized across contexts. Research limitations/implications: There can be circumstances where public subsidy of PTSCs is beneficial to economic welfare. However, authorities should be careful in their evaluation of whether to subsidize PTSCs. Originality/value: The study expands on existing research by informing respondents about the lack of tangible benefits produced by PTSCs, hereby focusing on WTP on an informed basis. [ABSTRACT FROM AUTHOR]

Conservation of groundwater resources is critical for maintaining the future productivity of irrigated land in the Ogallala Aquifer Region and beyond. This research explores motivations and behavior related to groundwater conservation among agricultural producers in the Colorado portion of the Republican River Basin, which is part of the Ogallala Aquifer. The empirical modeling uses data from a recently conducted survey to analyze how a common set of producer, farm, and resource characteristics influence groundwater values, concern for future groundwater availability, private conservation actions, and support for coordinated conservation efforts. We find two factors, producer age and land owner status, are consistently correlated with the key conservation‐related outcomes we evaluate. More generally, the results suggest considerable similarities in the characteristics that drive private conservation actions and support for coordinated conservation. This knowledge could be used to better target and incentivize future groundwater conservation efforts in the region. Editor's note: This paper is part of the featured series on Optimizing Ogallala Aquifer Water Use to Sustain Food Systems. See the February 2019 issue for the introduction and background to the series. Research Impact Statement: The age and land ownership status of agricultural producers are found to consistently impact a range of groundwater conservation motivations and actions. [ABSTRACT FROM AUTHOR]

Objective: The main aims of this paper are to analyse the monetary value of informal care time using different techniques and to identify significant variables associated with the number of caregiving hours. Data and methods: A multicentre study in two Spanish regions in adult caregivers was conducted. A total sample of 604 people was available. A multivariate analysis was performed to identify the variables associated with the number of hours of caregiving time. In the monetary valuation of informal care provided, three approaches were used: replacement cost method, opportunity cost and contingent valuation (willingness to pay and willingness to accept). Results: The main determinants of the amount of time of informal care provided were age, gender, the level of care receiver´s dependence and the professional care services received (at home and out of home). The value estimated for informal care time ranges from EUROS 80,247 (replacement cost method) to EUROS 14,325 (willingness to pay), with intermediate values of EUROS 27,140 and EUROS 29,343 (opportunity cost and willingness to accept, respectively). Several sensitivity analyses were performed over the base cases, confirming the previous results. Conclusions: Time of informal care represents a great social value, regardless of the applied technique. However, the results can differ strongly depending on the technique chosen. Therefore, the choice of technique of valuation is not neutral. Among the determinants of informal care time, the professional care received at home has a complementary character to informal care, while the formal care outside the home has a substitute character. [ABSTRACT FROM AUTHOR]

Abstract Contemporary research into future cities tends to focus on technology, architecture and infrastructure. However, this study highlights the importance of public art projects for our future cities. Very little empirical evidence and academic studies exist to determine whether or not public art is core to the life and demand of citizens. Using a hybrid contingent valuation (CV) and wellbeing valuation (WV) survey approach (Bakhshi et al., 2015), we collected data at two public art initiatives organised by MTArt Agency. 60% of our sample audience were willing to pay at least £5 for the implementation of more public art in their local area, with 84% willing to pay at least £2, and 84% of our sample said regular public art initiatives would increase their wellbeing. A binary logistic regression model was then used to measure the extent to which Londoners are willing to pay for public art and which factors influenced their decision. This paper evaluates the potential financial support and desire from citizens towards public art in their cities. We find evidence to suggest that Londoners are willing to pay for more public art in their local area and discover a range of explanatory variables which influenced their decisions. We hope to add to the existing academic research by demonstrating a core need from the audience towards public art, particularly, a willingness to pay for public art projects to become an integral part of their city experience. It is important to understand the economic value of public art initiatives within smart cities context because it will allow policy makers, urban planners and developers to implement such initiatives in the future. With this innovative multi-disciplinary approach, we hope to enable arts projects to engage wider demographics, obtain stronger financial support and become a more meaningful integration into our urban realm. Highlights • Contemporary research into future cities focuses on technology and infrastructure. • This paper evaluates the desire from citizens towards public art in their cities. • We used a hybrid contingent valuation (CV) and wellbeing valuation (WV) survey approach. • 84% of the sample audience were willing to pay at least £2 to support art in cities. • With this approach, the paper hopes to enable the implementation of arts projects. [ABSTRACT FROM AUTHOR]

This paper uses a contingent valuation study and an actual donation request to assess the impact of behavioral factors on hypothetical bias in stated willingness-to-pay estimates. Our findings indicate that both the number of respondents willing to donate and the amount they are willing to donate differ substantially between treatments. Behavioral factors play a substantial and significant role; in particular, the extent of warm glow derived from giving and expectations about other people's behavior increase the extent of hypothetical bias in stated willingness-to-pay estimates. We suggest ways in which this may be incorporated in future contingent valuation study design. (JEL Q51) [ABSTRACT FROM AUTHOR]

Abstract Urban heat island is one of the most notorious climate features of urbanization, and is becoming a serious environmental problem of Beijing. To help alleviate this problem, the Beijing government plans to promote the construction of urban green roofs at a rate of 100,000–120,000 m2 per year from 2015 to 2020. Since there has been limited attention on the economic benefits of mitigating this phenomenon, this paper empirically investigates the willingness of Beijing residents to pay for the benefits of green roofs in mitigating the urban heat island effects and their determinants. The data were obtained from a contingent valuation survey using a double-bounded discrete choice format. Since a large number of zero responses (comprising 57% of all respondents) appeared in our research, we used the spike model to process the data. The results show that the spike model fits our data well. The average household is willing to pay 148.582 Chinese yuan per year. Moreover, other than the conventional determinants of respondents' income and education, factors identified by the theory of planned behavior - such as attitude, perceived behavioral control, and social norm - can significantly affect respondents' willingness to pay. This paper suggests that enhancing government credibility will be of great importance in promoting public participation in mitigating urban heat island effect. Highlights • Estimate the willingness to pay for green roofs for mitigating urban heat island effect. • The average household is willing to pay 148.582 Chinese yuan per year. • The theory of planned behavior can greatly explain pro-environment behavior. • Enhancing government credibility is important in promoting public participation. [ABSTRACT FROM AUTHOR]

The price of residential heating from the district heating system is similar to that from the individual heating system in Korea. However, the former is known to be more efficient in terms of national energy consumption than the latter in urban areas with high population density. Because district heating system reduces the total amount of energy consumption by 24% compared to individual heating system. This paper attempts to assess the public preferences for substituting consumption of residential heating produced from individual heating system with that produced from district heating system in terms of national energy efficiency. To apply contingent valuation method, a contingent valuation survey of 1000 households was implemented. Public preferences can be provided price gap, which is willingness to pay (WTP) and the findings can be interpreted as external benefits. For the purpose of mitigating the response effect in eliciting their WTP and increasing statistical efficiency in analyzing the WTP data, we employ a one-and-one-half-bounded dichotomous choice question format. Furthermore, we use the spike model so as to model zero WTP responses. The results show that the mean additional WTP for district heating system over individual heating system is estimated to be KRW 8544 per KRW 100,000 of residential heating. The WTP estimate is statistically significant at the 1% level. Thus, the external benefit of the district heating system over individual heating system in terms of national energy efficiency amounts to about 8.5% of the price for residential heating. [ABSTRACT FROM AUTHOR]

The percentage of protesters in contingent valuation surveys is substantial–about 20% across many studies. This paper seeks to clarify the motivations behind protest responses. In addition, the question whether the estimation of willingness to pay (WTP) is more biased by the exclusion or inclusion of protest bids is yet undecided. Methodological improvements are difficult for three reasons: motivations behind protest responses are largely unclear, definitions of protest differ between studies and often only participants who state a zero WTP are asked for their reasons. Our survey on farm animal welfare (n = 1335) provides detailed motivations, two definitions and includes debriefing of all participants for their WTP. We find that protest bids are not a refusal to answer, they are neither irrational nor driven by lack of understanding. Quite the contrary, a large part of participants is directly motivated by moral reasons. Furthermore, protest responses are not coupled to a zero WTP. In our sample, only 8% out of 32% protesting participants had a zero WTP. Only a small fraction of zero bids (0.4%) are true WTP-statements, i.e. respondents were satisfied with the status quo. This finding has important implications for existing WTP-estimates which might be biased. Finally, we provide detailed estimates of the WTP for animal welfare issues by including and excluding different types of protesters and outliers. [ABSTRACT FROM AUTHOR]

Background: Consumers worldwide have recently become more aware that their consumption preferences and habits influence not only the environment, but also other people's lives. These 'ethical' consumers are therefore said to consider the moral features of the product or service in their consumption decision. The most prominent ethical consumption label is the Fair Trade label, which was established to enhance the living and working conditions of those working on small-scale farm cooperatives in developing countries. Aim: This paper aims to determine wine tourists' willingness to pay (WTP) for improved working and living conditions for wine farm workers. Setting: The research was conducted at the largest wine festival in South Africa, the Wacky Wine Festival in Robertson in the Western Cape, an area renowned for its wine and fruit products. Method: The concept of a socially acceptable logo on the wine bottle – signalling fair wages to the farm workers – was assessed by using a double-bounded contingent valuation approach. Wine tourists completed 397 questionnaires during the festival in June 2017. Results: The results indicate that 80% of wine tourists are willing to pay more for socially responsible wines. The responsible wine consumer is typically younger and a premium of R11 per bottle of wine would be accepted if it signals fair treatment of workers. Conclusion: The socially responsible wine tourist in South Africa is more concerned about quality and the moral implications of the wine than the price. There is support for the implementation of a socially responsible label for wine products. Keywords: Wine tourism; ethical consumption; contingent valuation; Wacky Wine Festival. [ABSTRACT FROM AUTHOR]

In this paper, it is proposed one method to recode protest responses applicable to the simple dichotomous format valuation question made to visitors to natural environment in contingent valuation studies. Those respondents that give a protest response but have a travel cost greater than the bid proposed in the valuation question are recoded as an affirmative answer to the proposed payment. The economic justification lies in the minimum willingness to pay for enjoying the environment that travel cost reveals, while valuation question tries to obtain information about respondent maximum willingness to pay. Recoding allows to recover information and to improve estimates, accuracy. It also avoids computational complexity associated with sample selection models used to avoid biases derived from excluding protest responses. [ABSTRACT FROM PUBLISHER]

Purpose – The purpose of this paper is to examine the practice potential of self-administered drop-off as a survey mode for contingent valuation (CV) studies. Design/methodology/approach – This paper conducts an empirical comparison of mode effects of two survey methods for improved ecological services in Beijing. Data were collected from a CV survey, which has two subsamples, one using face-to-face interviews and the other employing self-administered drop-off surveys. Findings – There is some evidence of social desirability bias in the face-to-face interviews for the participation question; however, such effects do not carry over to subjects’ responses to the contribution decision. No difference is observed in sample demographics between modes. And satisficing effect is not observed in the drop-off survey in this study. Research limitations/implications – More well-controlled mode comparisons are warranted to test the robustness of the results; and collection time effects as well as the use of drop-off surveys for environmental valuation with different levels of complexity and familiarity are worthy of further study. Practical implications – The authors find more similarities between drop-off and face-to-face surveys than differences therefore support the practice of self-administered drop-off surveys in CVM for environmental valuation. Originality/value – This paper adds to the limited number of well-controlled mode comparisons in the CV surveys, and contributes to a better understanding of self-administered drop-off surveys, a potential low-cost alternative to face-to-face interviews in future CV applications. [ABSTRACT FROM AUTHOR]

This paper summarizes the state-of-the-art for assessing the value of a statistical life (VSL) as a component of the costs of road accidents. It focuses on the most popular approaches for assessing the VSL, with respect to its theoretical foundations, current state-of-research and empirical evidence. Our paper also provides a first (to our knowledge) compendium of results for the VSL based on Stated Choice (SC) methods. Among the analysed alternatives, the willingness-to-pay (WTP) appears to be the leading approach for assessing the VSL and the SC methods represent the current state-of-the-art for determining the WTP for non-market goods. We conclude that the SC approach overcomes some of the most important shortcomings of the alternative approaches and offers a significant flexibility that can be used to address its own limitations. We also identify a significant need for research, as a gap between the methods employed in research (SC methods) and the state-of-the-practice (other methods) has emerged. [ABSTRACT FROM PUBLISHER]

This paper is dedicated to the replication of a convex contingent claim h( S) in a financial market with frictions, due to deterministic order books or regulatory constraints. The corresponding transaction costs can be rewritten as a nonlinear function G of the volume of traded assets, with G′(0)>0. For a stock with Black-Scholes midprice dynamics, we exhibit an asymptotically convergent replicating portfolio, defined on a regular time grid with n trading dates. Up to a well-chosen regularization h of the payoff function, we first introduce the frictionless replicating portfolio of $h^{n}(S^{n}_{1})$, where S is a fictitious stock with enlarged local volatility dynamics. In the market with frictions, a suitable modification of this portfolio strategy provides a terminal wealth that converges in $\mathbb{L}^{2}$ to the claim h( S) as n goes to infinity. In terms of order book shapes, the exhibited replicating strategy only depends on the size 2 G′(0) of the bid-ask spread. The main innovation of the paper is the introduction of a 'Leland-type' strategy for nonvanishing (nonlinear) transaction costs on the volume of traded shares, instead of the commonly considered traded amount of money. This induces lots of technicalities, which we overcome by using an innovative approach based on the Malliavin calculus representation of the Greeks. [ABSTRACT FROM AUTHOR]

In this paper we deal with the problem of missing data in environmental cost-benefit analysis. If government pursues the goal of maximizing social welfare, this implies that public funds should be allocated to those uses where they generate the highest net social benefit. This criterion makes it necessary to conduct cost-benefit analyses for public projects. While the assessment of project costs is typically rather straightforward, a comprehensive assessment of the project benefits is more complicated because one has to consider that also people living far away from the project site might benefit from that project. Neglecting these so-called passive use benefits would lead to a systematic undervaluation of environmental projects, thereby reducing their chances of being realized. A comprehensive cost-benefit analysis would, therefore, require benefit assessment studies in all areas where passive use values might occur. Obviously, this would be impossible. In this paper we show how the assessment of the social benefits from environmental projects can be enhanced even with an imperfect database by using benefit transfer techniques. This is also illustrated empirically using an example from Northwest China. [ABSTRACT FROM AUTHOR]

Purpose -- Negative effects of crime encompass several different dimensions. As a result, there is no existing methodology capable of dealing with all the relevant issues simultaneously and the interpretation of the estimates currently available lacks theoretical foundation. The purpose of this paper is to provide a unified view of the meaning and relationship between the various dimensions of the welfare cost of crime and violence available in the literature. Design/methodology/approach -- The paper develops a theoretical model of crime and illustrates the different interpretations of welfare costs of crime and violence within this unified framework. This theoretical benchmark is then used as a benchmark to review the empirical literature on the topic. Findings -- The analysis suggests that the most commonly estimated dimension of the welfare cost of crime -- related to the total loss associated with crime -- although relevant as an illustrative tool, is not very useful from a policy perspective. The literature should therefore move closer to the idea of estimating marginal costs and benefits in order to become policy relevant. Research limitations/implications -- Policy-oriented research related to optimal law enforcement should move in the direction of estimating the marginal willingness to pay of individuals for reductions in crime. This should be compared to the marginal cost of alternative policies in order to guide public policy in the area. Originality/value -- This survey rationalizes in economic terms the estimates from the existing methodologies, highlights some of their limitations, and points out potential directions for future research. It provides one of the first unified views of the various dimensions of welfare cost of crime and violence that have been presented in the literature. [ABSTRACT FROM AUTHOR]

Water supply and sanitation (WASH) service providers in most towns of developing countries, such as Godey Town in Ethiopia, the case study reported in this paper, deliver less than basic services. The costs for meeting the more ambitious WASH targets of the Sustainable Development Goals will be much higher than what has previously been invested in the sector. This study showed that a tariff structure designed using affordability and willingness-to-pay data would provide higher revenues than one solely based on estimated customers' affordability, or Ethiopian government's tariff guidelines. As in previous studies in Ethiopia, this study highlights government's low willingness-to-charge amidst a high customers' willingness-to-pay. Yet, there is need to increase water tariffs in developing countries, hence, moving towards financial sustainability and supplementing the other two Ts – taxes and transfers. Based on accurate and updated socio-economic data, the tariff can also be optimised to fulfil the social equity objective. [ABSTRACT FROM AUTHOR]

The article presents a discussion on economic inflation and foreign exchange rates in regards to production and economic uncertainty. This research paper applies the techniques of continuous-time contingent pricing theory (CPT) to the foreign exchange market. The authors wish to treat inflationary and productive sources of risk in two countries. The authors contrast real and nominal interest rates, in regards to inflation and provide extensive analysis on interest rate differentials in international markets.

This paper aims to investigate the air pollution issues in Hanoi – one of the most air polluted cities in the world in recent years – on residents' and foreign visitors' perceptions and how their trust in the local government to establish a joint funding mechanism to mitigate air pollution in Hanoi. Such information is fundamental in order to establish an effective and efficient program to improve air quality not only in Hanoi, but also in many cities around the world. We employ a random stratified approach coupled with the contingent valuation survey and an interval regression model over a sample of 475 residents and 75 foreigners. We found that public trust is relatively low in Hanoi. Almost all respondents in the city (95%) agreed air pollution is getting worse and poor air quality severely impacts their health and increases their healthcare expenses. Over 93% of respondents claimed an urgency to mitigate air pollution in the city, but the income shares for such mitigation activities are relatively small (only 0.4–0.5% ($4.6-$6) of their household monthly incomes). Many also refuse to make any contributions because their trust in the public sector to use such monetary contributions is low. We suggest that the local government may need to improve transparency and outline a clear plan with all cash inflow and outflow information provided on a website, enabling public verification, if they expect high contributions from the private sector to share the burden. [Display omitted] [ABSTRACT FROM AUTHOR]

We consider indifference pricing of contingent claims consisting of payment flows in a discrete-time model with proportional transaction costs and under exponential disutility. This setting covers utility maximization of terminal wealth as a special case. A dual representation is obtained for the associated disutility minimization problem, together with a dynamic procedure for solving it. This leads to efficient and convergent numerical procedures for indifference pricing, optimal trading strategies and shadow prices that apply to a wide range of payoffs, a large range of time steps and all magnitudes of transaction costs. [ABSTRACT FROM AUTHOR]

This paper analyzes public willingness to support farmer adoption of best management practices in Oklahoma's Fort Cobb Watershed, a multiuse area for agriculture, residential water provision, and recreation. The study uses Oklahoma's Meso-Scale Integrated Sociogeographic Network survey to conduct a contingent valuation analysis of a hypothetical, one-time tax that would support farmer adoption of pasture and riparian buffer management practices. Respondent heterogeneity is modeled using beta-binomial regression. Public support for the hypothetical program is stronger for the tandem implementation of riparian buffer establishment and pasture expansion (willingness to pay [WTP] = $290) and riparian buffer establishment (WTP = $317). [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to obtain evidence about the scope of the determinants of the willingness to pay (WTP) of the residents in a Spanish city (A Coruña) for keeping a professional football team (Deportivo) competing at the highest level. Apart from the individual socio-demographic characteristics of the respondents and their attitudes as football fans, the authors try to know the influence on the WTP of factors such as the general economic conditions and the plausibility of the team disappearance. Design/methodology/approach – The value of the intangible benefits associated with the team existence is derived from the application of the contingent valuation method (CVM), using two surveys conducted in 2003 and 2012, respectively, with the aim of obtaining information concerning citizens’ behaviour and attitudes towards a professional football team. Findings – The consumption of public goods generated by the local football team is relatively inelastic to the sport success and general economic situation, but the value assigned by residents to those goods depends on these factors. Of the two components of the WTP, the non-use value is especially sensitive to changes both in the Spanish economic conditions and in the quality of the public goods generated by the football team. Originality/value – This is the first study that applies the CVM to a football team controlling for both the general economic conditions and the team sport success and, as such, it provides interesting insights into the nature and scope of the determinants of individuals’ WTP in a CVM setting. [ABSTRACT FROM AUTHOR]

The paper aims at assessing effective demand of toll roads in the context of user demand and willingness-to-pay (WTP). The specific objectives are to establish mitigation costs associated with existing roads, to find out users' involvement in project planning and what an average user will be willing to pay for improved road conditions. Using a sample of 500 observations, with a response of 356 (71.2%), effective demand for toll roads and willingness-to-pay along Lekki-Ajah corridor (Lekki toll road concession) in Lagos was investigated. Data was analyzed using descriptive statistics, and the discounted cash flow technigue to ascertain project viability. The result of the analysis shows that majority of the respondents and commuters complained of not being consulted at the planning stage of the project, which affected the viability and willingness to pay (WTP) figures. Also, commuters suffer conseguential damages and delay in travel time due to poor road conditions. Stakeholder consultation in infrastructure planning and provision is rarely undertaken in Nigeria. This paper is therefore designed to expose the implication of this practice to successful Public-Private-Partnership. [ABSTRACT FROM AUTHOR]

This paper reports the results of a Contingent Valuation (CV) study on cancer prevention where Multiple-Bounded Dichotomous Choice (MBDC) questions are asked of rural residents in China about their willingness to pay (WTP) for a hypothetical cancer vaccine which is expected to be effective for one year. The WTP data are analyzed with region-, age- and gender-specific cancer morbidity and mortality risk statistics; an upper and lower bound of the Value of a Statistical Life (VSL) are then estimated. The estimated VSL is between 481 and 814 thousand yuan (or 58 and 98 thousand US dollars) at 2000 constant prices, which is compatible with the results of previous studies. [ABSTRACT FROM AUTHOR]

The aim of this paper is to demonstrate the implication of infrastructure condition to urban neighbourhood sustainability and how a demand driven approach can enhance willingness to pay for service improvement. The study is a survey research carried out through the distribution of structured questionnaires to 1040 households in 8 metropolitan local government areas namely; Alimosho, Apapa, Eti-osa, Ikeja, Shomolu, Mushin, Kosofe and Surulere. The questionnaire was designed to elicit information on households' preferences and demand for urban infrastructure including willingness to pay and averting expenditure. Findings from the study indicated that different areas of the city have preferences for different infrastructure both in specific types and service option, and that demand driven provision will enhance WTP and has implication to neighbourhood sustainability. It will also encourage cost recovery and public sector participation in infrastructure provision. [ABSTRACT FROM AUTHOR]

Congestion is an important externality that causes negative welfare effects on individuals using a natural resource. This paper resolves congestion issues in a high-density urban forest of Turkey via probit panels using a random utility framework. Some components of the New Environmental Paradigm (NEP) scale are incorporated into probit panels to understand recreationists' environmental attitudes to congestion pricing for shifting congestion levels. Those components are sensitivity to sustainable development, biodiversity and efficient resource use. The results offer important insights to policy makers who are confronted with two environmental management options, which are resource-restriction or resource-enlarging policies. Environmental attitudes dictate that resource enlarging policy may increase aggregate welfare up to US$472,500/year if the site is managed at low congestion levels. [ABSTRACT FROM PUBLISHER]

This paper reviews previous efforts to assign monetary value to climatic or meteorological information, such as public information on drought, climate, early warning systems, and weather forecast information. Methods and tools that have been explored to examine the benefits of climatic and meteorological information include the avoided cost, contingent valuation, choice experiments, benefit transfer, and descriptive approaches using surveys. The second part of this paper discusses specific considerations related to valuing drought information for public health and the Bureau of Land Management. We found a multitude of connections between drought and the land management and health sectors in the literature. The majority of the papers that we summarized only report biophysical change, because the economic losses of drought are not available. Only a few papers reported economic loss associated with drought. To determine the value of drought information, we need to know more about the role it plays in decision making and what sources of drought information are used in different sectors. This inventory of methods and impacts highlights opportunities for further research in valuing drought information in land management and public health. [ABSTRACT FROM AUTHOR]

The article focuses on the book "Current Issues in Environmental Economics," edited by Per-Olov Jahansson, Bengt Kristrom and Karl-Go&ruml;an Mäler. The book discusses the contingent valuation method and experimental methods that can be used to value environmental assets and show how altruistic concerns can be handled in evaluations of environmental change. It focuses on current issues in the design, administration, and analysis of contingent valuation surveys.

The article reflects on the contingent valuation study of the Exxon Valdes oil spill. The authors claim that the study which applies to the damages of oil spill marked the landmark event in environmental economics. They mention that the region which was affected by the oil spill had been set by the United States government agencies as a protected area. They state that the publication of the paper related to the oil spill will help in the debate regarding the contingent valuation method.

This paper develops duality theory for optimal investment and contingent claim valuation in markets where traded assets may be subject to nonlinear trading costs and portfolio constraints. Under fairly general conditions, the dual expressions decompose into three terms, corresponding to the agent’s risk preferences, trading costs and portfolio constraints, respectively. The dual representations are shown to be valid when the market model satisfies an appropriate generalization of the no-arbitrage condition and the agent’s utility function satisfies an appropriate generalization of asymptotic elasticity conditions. When applied to classical liquid market models or models with bid-ask spreads, we recover well-known pricing formulas in terms of martingale measures and consistent price systems. Building on the general theory of convex stochastic optimization, we also obtain optimality conditions in terms of an extended notion of a “shadow price”. The results are illustrated by establishing the existence of solutions and optimality conditions for the nonlinear market models recently proposed in the literature. Our results allow significant extensions including nondifferentiable trading costs which arise, e.g., in modern limit order markets where the marginal price curve is necessarily discontinuous. [ABSTRACT FROM AUTHOR]

This paper uses a combination of the contingent valuation method (CVM) and value transfer (VT) to estimate the value of non-market benefits associated with the achievement of good (marine) environmental status (GES) as specified in the EU Marine Strategy Framework Directive (MSFD) for Atlantic member states. The increased use of geographic information systems in VT means that many VT exercises now include spatial elements such as distance decay and population density. This paper explores impact of distance decay on welfare estimates as well as the impact from the modifiable area unit problem (MAUP) when population density is included as an explanatory variable. These issues can have a large effect on a VT estimate. In this study the overall value for achieving GES for Atlantic member states varied between €2.37billion and €3.64 billion. It was found that the different distance decay specifications changed values between −3% and 82% with a mean absolute difference of 25% and by adjusting the spatial scale in an effort to overcome the MAUP changed aggregate values between 13% and 25% with a mean of 17%. [ABSTRACT FROM AUTHOR]

Abstract: In this paper, we investigate the use of geographically weighted choice models for modelling spatially clustered preferences. We argue that this is a useful way of generating highly‐detailed spatial maps of willingness to pay for environmental conservation, given the costs of collecting data. The data used in this study come from a discrete choice experiment survey of public preferences for the implementation of a new national forest management and protection programme in Poland. We combine these with high‐resolution spatial data related to local forest characteristics. Using locally estimated discrete choice models we obtain location‐specific estimates of willingness to pay (WTP). Variation in these estimates is explained by characteristics of the forests close to where respondents live. These results are compared with those obtained from a more typical, two stage procedure which uses Bayesian posterior means of the mixed logit model random parameters to calculate location‐specific estimates of WTP. We find that there are indeed strong spatial patterns to the benefits of changes to the management to national forests. People living in areas with more species‐rich forests and those living nearer bigger areas of mixed forests have significantly different WTP values than those living in other locations. This kind of information potentially enables a better distributional analysis of the gains and losses from changes to natural resource management, and better targeting of investments in forest quality. [ABSTRACT FROM AUTHOR]

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This paper presents what we believe to be the most comprehensive suite of comparison criteria regarding multinomial discrete-choice experiment elicitation formats to date. We administer a choice experiment focused on ecosystem-service valuation to three independent samples: single-choice, repeated-choice, and best-worst scaling elicitation. We test whether results differ by parameter estimates, scale factors, preference heterogeneity, status-quo effects, attribute non-attendance, and magnitude and precision of welfare measures. Overall, we find limited evidence of differences in attribute parameter estimates, scale factors, and attribute increment values across elicitation treatments. However, we find significant differences in status-quo effects across elicitation treatments, with repeated-choice resulting in greater proportions of “action” votes, and consequently, higher program-level welfare estimates. Also, we find that single-choice yields drastically less-precise welfare estimates. Finally, we find some differences in attribute non-attendance behavior across elicitation formats, although there appears to be little consistency in class shares even within a given elicitation treatment. [ABSTRACT FROM AUTHOR]

Gender differences in fish processors' willingness to pay for a group-owned fish solar tent dryer (FSTD) are being assessed by using the double hurdle model. Willingness to pay (WTP) responses from 382 randomly selected fish processors were elicited through a bidding game in a contingent valuation method. The findings show that the average probability that fish processors will be willing to pay was 74% (76% for females and 72% for males). Furthermore, the average level of WTP was US$29.45 (US$26.46 for females and US$33.51 for males). Females have a lower level of WTP than men because of their low endowment with assets that can assist them such as education, access to markets and productive assets. In view of these findings, the paper concludes that female fish processors have a higher probability of being willing to pay than male fish processors, but the levels of WTP are lower for female processors. The study suggests that when organising the community into cooperatives is possible, WTP for capital-intensive technologies can be assessed as contributions of individuals to the total cost of the technologies although the common property characteristic is suspected to lower the level of willingness to pay. [ABSTRACT FROM AUTHOR]