On the gap between payment card and closed-ended CVM-answers

Abstract

The paper presents contingent valuation (CV) estimates of benefits provided by a proposed ‘Kalkalpen’ National Park in Austria. Although descriptive results of welfare measures are presented, the focus of the paper is on methodological questions concerning the analysis of CV answers. Evidence is given regarding the difference between payment card (PC) answers and closed-ended question formats. Based on different estimation models for CV questions substantial differences are found between closed-ended and payment card welfare measures. On average PC-willingness to pay (WTP) measures are below the closed-ended figures. Since the evaluation models are based on different premises in the calculation of WTP figures a more precise disclosure of the underlying evaluation methods is required if different question formats are compared to one another. Identical assumptions on the probability distributions have to be assumed whenever open- and closed-ended CV welfare measures are compared. Taking theoretical arguments into account the application of the closedended double-bounded Spike model that provides an average welfare measure is recommended.