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Joint estimation of discount rates and willingness to pay for public goods

Author

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  • Bond, Craig A.
  • Cullen, Kelly Giraud
  • Larson, Douglas M.
Abstract
We analyze willingness to pay (WTP) for environmental programs whose time periods of benefit and repayment differ, using a net present value framework that identifies parameters of both WTP and personal discount rates. Respondents to a contingent valuation survey focusing on protection of critical habitat buffer zones for the endangered Steller Sea Lion in Alaska were asked their willingness to pay for 1-, 5-, and 15-year repayment periods. We jointly estimate the personal discount rates and WTP via maximum likelihood, and compare with a model assuming a fixed, market discount rate.

Suggested Citation

  • Bond, Craig A. & Cullen, Kelly Giraud & Larson, Douglas M., 2009. "Joint estimation of discount rates and willingness to pay for public goods," Ecological Economics, Elsevier, vol. 68(11), pages 2751-2759, September.
    • Handle: RePEc:eee:ecolec:v:68:y:2009:i:11:p:2751-2759
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    5. Lew, Daniel K., 2018. "Discounting future payments in stated preference choice experiments," Resource and Energy Economics, Elsevier, vol. 54(C), pages 150-164.
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    7. Remoundou, Kyriaki & Kountouris, Yiannis & Koundouri, Phoebe, 2012. "Is the value of an environmental public good sensitive to the providing institution?," Resource and Energy Economics, Elsevier, vol. 34(3), pages 381-395.
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    9. Kyriaki Remoundou & Fikret Adaman & Phoebe Koundouri & Paulo Nunes, 2014. "Is the value of environmental goods sensitive to the public funding scheme? Evidence from a marine restoration programme in the Black Sea," Empirical Economics, Springer, vol. 47(4), pages 1173-1192, December.
    10. Kyriaki Remoundou & Fikret Adaman & Phoebe Koundouri & Paulo Nunes, 2013. "Is the Value of Environmental Goods Sensitive to the Source of Public Funding? Evidence from a Marine Restoration Programme in the Black Sea," DEOS Working Papers 1321, Athens University of Economics and Business.
    11. Henrik Andersson & James Hammitt & Gunnar Lindberg & Kristian Sundström, 2013. "Willingness to Pay and Sensitivity to Time Framing: A Theoretical Analysis and an Application on Car Safety," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 56(3), pages 437-456, November.
    12. Carrasco-Garcés, Moisés & Vásquez-Lavín, Felipe & Ponce Oliva, Roberto D. & Diaz Pincheira, Francisco & Barrientos, Manuel, 2021. "Estimating the implicit discount rate for new technology adoption of wood-burning stoves," Energy Policy, Elsevier, vol. 156(C).
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    14. Egan, Kevin J. & Corrigan, Jay R. & Dwyer, Daryl F., 2015. "Three reasons to use annual payments in contingent valuation surveys: Convergent validity, discount rates, and mental accounting," Journal of Environmental Economics and Management, Elsevier, vol. 72(C), pages 123-136.
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    16. Ju-Hee Kim & Joseph Kim & Seung-Hoon Yoo, 2020. "What Value Does the Public Put on Managing and Protecting an Endangered Marine Species? The Case of the Finless Porpoise in South Korea," Sustainability, MDPI, vol. 12(11), pages 1-16, June.
    17. Vásquez-Lavín, Felipe & Carrasco, Moisés & Barrientos, Manuel & Gelcich, Stefan & Ponce Oliva, Roberto D., 2021. "Estimating discount rates for environmental goods: Are People’s responses inadequate to frequency of payments?," Journal of Environmental Economics and Management, Elsevier, vol. 107(C).
    18. Gregory Howard & John C. Whitehead & Jacob Hochard, 2020. "Estimating Discount Rates Using Referendum-style Choice Experiments: An Analysis of Multiple Methods," Working Papers 20-01, Department of Economics, Appalachian State University.
    19. Vasquez-Lavín, Felipe & Ponce Oliva, Roberto D. & Hernández, José Ignacio & Gelcich, Stefan & Carrasco, Moisés & Quiroga, Miguel, 2019. "Exploring dual discount rates for ecosystem services: Evidence from a marine protected area network," Resource and Energy Economics, Elsevier, vol. 55(C), pages 63-80.

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