Title

Valuation on the frontier: Calibrating actual and hypothetical statements of value

Authors

Authors

R. A. Hofler;J. A. List

Comments

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Abbreviated Journal Title

Am. J. Agr. Econ.

Keywords

calibration; contingent valuation; stochastic frontier; CONTINGENT VALUATION; REFERENDA; MODEL; GOODS; BIAS; Agricultural Economics & Policy; Economics

Abstract

The lack of robust evidence showing that hypothetical behavior directly maps into real actions remains a major concern for proponents of stated preference nonmarket valuation techniques. This article explores a new statistical approach to link actual and hypothetical statements. Using willingness-to-pay field data on individual bids from sealed-bid auctions for a $350 baseball card, our results are quite promising. Estimating a stochastic frontier regression model that makes use of data that any contingent valuation survey would obtain, we derive a bid function that is not statistically different from the bid function obtained from subjects in an actual auction. If other data can be calibrated similarly, this method holds significant promise since an appropriate calibration scheme, ex ante or ex post, can be invaluable to the policy maker that desires more accurate estimates of use and nonuse values for nonmarket goods and services.

Journal Title

American Journal of Agricultural Economics

Volume

86

Issue/Number

1

Publication Date

1-1-2004

Document Type

Article

Language

English

First Page

213

Last Page

221

WOS Identifier

WOS:000188660400016

ISSN

0002-9092

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