Three essays on contingent valuation

This dissertation consists of three essays on the contingent valuation methodology. The first essay develops a theoretical model of how agents respond to willingness to pay questions in a survey context. In particular, this essay focuses on the difference between a voluntary contribution mechanism and a mandatory contribution mechanism. The second essay applies this theory to a survey of willingness to pay for renewable energy by varying the mechanism by which the public good is supplied. The third essay proposes a methodology for choosing the number, location and range of contributions or bid levels in dichotomous choice contingent valuation surveys.; The first essay, “Mandatory vs. Voluntary Payment to a Public Good” models the differing incentive effects of two different payment mechanisms in contingent valuations surveys. It is shown that under rationed voluntary payment (where each agent can contribute either a fixed amount or nothing) there exists a Nash equilibrium in which the level of public good provided is strictly below the level provided under a mandatory provision rule. This result is generalized to hypothetical valuation surveys and a set of condition ranking willingness to pay under each mechanism is described.; The second essay “Valuing a Public Good” describes the result of a survey designed to test the above theory. This essay considers willingness to pay for renewable energy. In order to test the theory, a split sample survey of over fifteen hundred respondents was conducted. One half of the sample was asked whether they would volunteer to pay for green power and the other half was asked whether they would vote to support a program in which the entire population was required to contribute towards the provision of the public good. On average, respondents' willingness to pay was higher for the public good provided by the mandatory provision mechanism.; The third essay describes the literature on how the contribution or bid levels can be chosen to maximize the information concerning the willingness to pay of respondents. This essay proposes a methodology by which various designs can be evaluated. This essay clarifies some of the longstanding debates concerning the range, number and location of bid levels in dichotomous choice contingent valuation.