Correction And Empirical Study On CVM Hypothetical Bias Based On Cheap Talk

Contingent valuation method(CVM) is one of the most important and w idely us ed assessment technology for the non- use values evaluation of environmental goods in the wor ld, which is achieved by s imulating the hypothetical mar ket and get the willingness to pay(WTP). Because of the hypothetical property of CVM, respondents’ strategic behavior may be taken p lace. Therefore, the non-use values evaluation of environmental goods is biased, which caused w idespread controversy on its validity and r eliability in academia.Cheap Talk(CT), one term of game theory, is an impor tant method used to identify and correct the hypothetical bias in CVM studies. Relevant foreign study on CT has summed up a lot of exper ience sinc e the technology was proposed in 1999. Domestic review liter atur e has referr ed to this method, but r elevant empir ical studies have been r arely reported by f ar.By evaluating the non-use values of the Songhua River, cheap talk was introduced base on foreign achievements and proposed a modif ied vers ion in China context in this study. A s hort length and neutr al prompt text supplemented by reminder of budget constr aints and substitutes was taken to ver if y the validity and applic ability of cheap talk. At the same time, class if ication des ign of questionnaire was adopted to test the influence of “the reminder of substitutes” on the results of estimation and cheap talk, aiming at filling the gaps of on the bas is of current CT studies. The questionnair e is divided into three types. Two types contain both the r eminder of budget constraints and cheap talk and the third one contain no prompt text to conduct the tradit ional survey way of CVM. Based on the compar is on of statistical and empir ical results among treatment groups, the effectiveness of cheap talk was ver if ied, the magnitude of hypothetical bias was identified and the fitness of “the reminder of substitutes” was clarified.According to the previous CVM literatur e, var iables used in the inf luenc ing f actors analys is of WTP were limited by respondents’ socio-economic attributes. In this paper, subjective factors such as ecological cognition, attitudes and awarenes s was inc luded in the evaluation pr ocess of non-us e values, aiming at obtaining a more compr ehens ive analys is results in the cons ideration of subjective and objective factors. Meanwhile, constructive suggestion was proposed to improve social members’ awareness on ecological protection and clarify the responsibility location for ecological protection between government and respondents through exploring respondents’ psychologic al dr iving factors on ecologic al conservation.In addition, the distance factor was involved in the inf luenc ing factors analys is of WTP to investigate its impact on respondents’ WTP and was used to verify the reasonableness and limitations of Distance Decay Effect.The statistical and empir ical r esults showed that prompt text containing the reminder of budget constraints, substitutes and CT aggr avated hypothetical bias, while the one inc luding the reminder of budget constraints and CT alleviated hypothetic al bias. It suggested that the reminder of substitutes should not be inc luded in th e prompt text. What’s more, the payment stability CT treatment gr oup( exc luding substitutes) is the best among treatment groups, which r ef lects that CT can attract respondents’ attention to the questionnaire issues seriously and cause deeply thinking. Combined w ith the corrective effectiveness of CT in this paper, its applic ation in the course of the investigation is reasonable.The res pondent’s corrected average WTP is 248.71 ~ 258. 16 CNY per year and the average hypothetical bias is 12.53 ~ 14.26 CNY. The differ ence between the non-us e values of Songhua River corrected before and after is 685 to 800 million CNY, which accounts for 5.04 to 10.1 percent of the corrected non-use values of the Songhua River. More attention should be paid to the hypothetical bias which may caus e the waste of public r esources. The corrected non-use value of Songhua River in 2012 was 1.36 ~ 1.41 billion CNY.Subjective factors impact significantly on respondent’s WTP, of which high level of ecologic al awareness, low bid proposed by investigator, willing to pay for restoration of distant ecologic al res ources and w illing to lower own living standar d for ecological cons ervation of Songhua River have the positive impact on respondents’ WTP. In some treatment groups, young, short distance from Songhua River, the living impact degree caused by Songhua River, apprais al comment on ecological conservation status of Songhua River and attitude be apt to ecological conservation versus economic development have the pos itive impact on res pondents ’ WTP.Distance var iable is only s ignif ic ant in the traditional WTP f unction model w ithout inc luding subjective var iables and carr ying out bias correction, which shows the attr ibute of Dis tanc e Decay Effect on WTP. If subjective var iables are conc luded into the model, distance var iable is not signif icant, so as the CT tr eatment gr oup w ithout the reminder of substitutes r egardless of the subjective var iables is contained or not. In a word, the conclus ion that the Distance Decay Effect on respondent’s WTP is of limitation.The identity of responsibility subjects for ecological conservation affects respondent’s payment r ate and WT P. Combined w ith the statistical results of protest payment sample, the higher educated, the more poss ibilities respondent would pay. But the empir ical analys is show s that respondents who is apt to ecologic al conservation versus economic development would pay more. The results above ar is ing from the limited identif ication of respons ibility subjects of ecological conservation, namely, respondents think that the government and the enterpr is es caused envir onmental damage should be respons ible for the ecological cons ervation, showing the feature of "rational man". This f inding of payment psychological motivations contr ibutes ref erenc es fo r government to make awar eness progr ams of ecological pr otection us ed to enhance the identification on the government’s work of environmental protection and respondent’s own respons ibility subjects.In summary, the effectiveness and applic ability of CT has been ver if ied in the course of estimating the non-us e values of Songhua River and hypothetic al bias should be pay mor e attention. The reminder of substitutes has been pr oved to be not suitable for the applic ation with CT in the process of value evaluation on unique environmental goods. The impact of ecological awar eness, cognition and attitudes on respondents’ WTP should be taken into account in the dec ision-making process. Bes ides, the previous conclus ion on WT P Distance Decay Effect has its limitation. T he findings of this paper not only provide the basis for the formulation of government’s envir onmental policy, but also accumulate some exper ience on CT application in China.