Estimation of a selectivity model with misclassified selection

ABSTRACT

Despite the great interest in models of self-selection and models with misclassification, there have been few studies combining the two. Notable exceptions are given by McCarthy, Millimet, and Roy and Shiu. None of these models have been developed in a contingent valuation setting that we are interested in. The goal of this note is to add to this literature by presenting a model for estimating willingness to pay using data collected through a contingent valuation survey. We examine the case of a selectivity model in which the outcome equation is interval censored but the decision indicator is not observed.

KEYWORDS:

• Contingent valuation
• selectivity model
• misclassification

JEL CODES:

• C34
• Q51