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Provision Point Mechanisms and Field Validity Tests of Contingent Valuation

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  • Gregory Poe
  • Jeremy Clark
  • Daniel Rondeau
  • William Schulze
Abstract
Past field validity tests of contingent valuation have relied on voluntary contribution mechanisms to elicit actual willingness to pay, and may overestimate hypothetical bias because of free riding in the actual contributions. This paper argues that provision point mechanisms are a preferred alternative for field validity tests of contingent valuation because they increase the proportion of demand revealed in cases in which public goods can be provided in a step function. The results of a contingent valuation validity study of participation in a green electricity pricing program that uses a provision point mechanism are reported, and hypothetical open-ended and dichotomous choice responses are compared to actual participation. Calibration of hypothetical responses is also explored. Copyright Kluwer Academic Publishers 2002

Suggested Citation

  • Gregory Poe & Jeremy Clark & Daniel Rondeau & William Schulze, 2002. "Provision Point Mechanisms and Field Validity Tests of Contingent Valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 23(1), pages 105-131, September.
    • Handle: RePEc:kap:enreec:v:23:y:2002:i:1:p:105-131
    DOI: 10.1023/A:1020242907259
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