TY - JOUR
T1 - Dealing with zero response data from contingent valuation surveys
T2 - Application of least absolute deviations estimator
AU - Yoo, Seung Hoon
AU - Kwak, Seung Jun
AU - Kim, Tai Yoo
PY - 2000
Y1 - 2000
N2 - Data on willingness-to-pay (WTP) collected from contingent valuation surveys are usually censored at zero. In such cases, ordinary least squares estimation of the WTP equation produces inconsistent parameter estimates. The maximum likelihood estimation of the Tobit model, which is widely used in this case, is not robust to heteroscedasticity and non-normal error structure. A least absolute deviations estimator allows for the censored data structure and is robust to these problems. In addition, the technique is useful in the case of small amounts of data. It is applied to household survey data in which the contingent valuation question involved the benefit of greenhouse gases reduction policy in Korea.
AB - Data on willingness-to-pay (WTP) collected from contingent valuation surveys are usually censored at zero. In such cases, ordinary least squares estimation of the WTP equation produces inconsistent parameter estimates. The maximum likelihood estimation of the Tobit model, which is widely used in this case, is not robust to heteroscedasticity and non-normal error structure. A least absolute deviations estimator allows for the censored data structure and is robust to these problems. In addition, the technique is useful in the case of small amounts of data. It is applied to household survey data in which the contingent valuation question involved the benefit of greenhouse gases reduction policy in Korea.
UR - http://www.scopus.com/inward/record.url?scp=0034060461&partnerID=8YFLogxK
U2 - 10.1080/135048500351753
DO - 10.1080/135048500351753
M3 - Article
AN - SCOPUS:0034060461
SN - 1350-4851
VL - 7
SP - 181
EP - 184
JO - Applied Economics Letters
JF - Applied Economics Letters
IS - 3
ER -