Loomis, John B.

April, 2014

2013WAEA Keynote Address: Strategies for Overcoming Hypothetical Bias in Stated Preference Surveys

By: Loomis, John B.
In some, but not all, contexts, respondents to stated preference valuation studies state a willingness to pay (WTP) higher than what lab or field experiments indicate is the actual amount they would pay. However, several ex ante survey design strategies and ex post calibration techniques can be used to minimize or eliminate hypothetical bias. This article reviews and presents evidence on the effectiveness of these ex ante and ex post approaches. The ex ante approaches lead to recommendations to modify survey designs to minimize the bias up front. If the analyst desires, ex post calibration of WTP using certainty scales can be used to reduce stated WTP to the point at which it will match actual cash contributions.
Download Full Article

August, 2008

Spatial Dependence in Hedonic Property Models: Do Different Corrections For Spatial Dependence Result in Economically Significant Differences in Estimated Implicit Prices?

By: Mueller, Julie M.; Loomis, John B.
While data used in hedonic property models are inherently spatial in nature, to date the majority of past regression analyses have used OLS models that overlook possible spatial dependence in the data when estimating implicit prices for environmental hazards. This paper explicitly addresses spatial dependence in a hedonic property model. We use robust testing procedures to determine the existence and type of spatial dependence in our OLS model. After identifying the nature of the spatial dependence, OLS estimates of the implicit price of wildfire risk are compared to implicit prices obtained using a spatial error model with three different spatial weighting matrices. Spatially corrected estimates of implicit prices are often found to be nearly the same as those obtained using OLS. Our results indicate that the inefficiency of OLS in the presence of spatially correlated errors may not always be economically significant, suggesting nonspatial hedonic property models may provide results useful for policy analysis, and spatial and nonspatial hedonic property models may provide results useful for policy analysis, and spatial and nonspatial hedonic property models might be pooled in meta-analysis.
Download Full Article

December, 2004

Using Random Parameters to Account for Heterogeneous Preferences in Contingent Valuation of Public Open Space

By: Nahuelhual, Laura; Loureiro, Maria L.; Loomis, John B.
To test for preference heterogeneity in dichotomous choice contingent valuation responses, a random parameter logit (RPL) specification is used in this analysis. The RPL model confirms heterogeneity in respondents' preferences for protection of public open space, as reflected in statistically significant standard deviations of the normally distributed random parameters. Results show that while the majority of respondents indicate a positive willingness to pay (WTP), a minority of those surveyed report a negative WTP. Some of this variation in tastes remains even after individual characteristics and attitudinal variables are included in the model.
Download Full Article

December, 2001

TESTING FOR DIFFERENTIAL EFFECTS OF FOREST FIRES ON HIKING AND MOUNTAIN BIKING DEMAND AND BENEFITS

By: Loomis, John B.; Gonzalez-Caban, Armando; Englin, Jeffrey E.
Surveys of visitors to National Forests in Colorado were conducted to determine whether different fire ages and presence of crown fires have different effects on hiking and mountain biking recreation visits and benefits. Actual and intended behavior data were combined using a count-data travel cost model. The intended behavior trip questions asked about changes in number of trips due to the presence of a high-intensity crown fire, prescribed fire, and a 20-year-old high-intensity fire at the area respondents were visiting. Using the estimated recreation demand function, years since a non-crown fire had statistically significant positive effect on the trip demand of hikers. In contrast, presence of crown fires had no statistically significant effect on the quantity of hiker trips, but had a significant and negative effect on mountain biking trips. Crown fires also had a large effect on the value per trip, with crown fires increasing the value per hiking trip but lowering the value per mountain biking trip.
Download Full Article

December, 1999

TRICHOTOMOUS CHOICE: A POSSIBLE SOLUTION TO DUAL RESPONSE OBJECTIVES IN DICHOTOMOUS CHOICE CONTINGENT VALUATION QUESTIONS

By: Loomis, John B.; Traynor, Kerri; Brown, Thomas C.
We investigate the possibility that some respondents to a dichotomous choice question vote YES, even though they would not pay the posted dollar amount in order to register support for the project or policy. A trichotomous choice question format is proposed to determine if allowing respondents the opportunity to vote in favor of a project at an amount less than their bid affects estimated willingness to pay. Using univariate and multivariate tests, we find the trichotomous choice question format reduces the number of YES responses and produces a statistically significant decrease in willingness to pay for an open-space program.
Download Full Article

December, 1997

ECONOMIC BENEFITS OF CRITICAL HABITAT FOR THE MEXICAN SPOTTED OWL: A SCOPE TEST USING A MULTIPLE-BOUNDED CONTINGENT VALUATION SURVEY

By: Loomis, John B.; Ekstrand, Earl
A split-sample design is used to test for a difference between mean willingness to pay (WTP) for protecting the Mexican spotted owl versus protecting 62 threatened/endangered species which includes the Mexican spotted owl. The multiple bounded contingent valuation method is used in a mail survey of U.S. residents. The mean WTP amounts are statistically different at the 0.1 confidence level indicating the multiple-bounded mail survey passes the scope test. The range of estimated benefits of preserving the 4.6 million acres of critical habitat for the Mexican spotted owl substantially outweighs the costs of the recovery effort.
Download Full Article

December, 1997

PANEL ESTIMATORS TO COMBINE REVEALED AND STATED PREFERENCE DICHOTOMOUS CHOICE DATA

By: Loomis, John B.
Combining stated and revealed preference data often involved multiple responses from the same individual. Panel estimators are appropriate to jointly model the decision to actually visit at current trip costs, the intention to visit at hypothetically higher trip costs, and the intention to visit at proposed quality levels. To incorporate data on all three choices, the random effects probit model is used to estimate the economic value of changes in instream flow as a covariate in the model and calculating value under alternative flow regimes.
Download Full Article