John C. Whitehead

Heading for Higher Ground: Factors Affecting Real and Hypothetical Hurricane Evacuation Behavior

The purpose of this paper is to assess the determinants of hurricane evacuation behavior of North Carolina coastal households during Hurricane Bonnie and a future hypothetical hurricane. We use the data from a telephone survey of North Carolina coastal residents. Hypothetical questions are used to assess whether respondents will evacuate and where in the case of a future hurricane with varying intensities. We examine the social, economic, and risk factors that affect the decisions to evacuate and whether to go to a shelter or motel/hotel relative to other destinations. The most important predictor of evacuation is storm intensity. Households are more likely to evacuate when given evacuation orders, when they perceive a flood risk, and when they live in mobile homes. Households who own pets are less likely to evacuate. Non-white households, pet owners and those with more education are less likely to go to either a motel/hotel or shelter, preferring instead to stay with friends or family.

The Value of Public Goods Generated by a Major League Sports Team: The CVM Approach

This article reports an application of the contingent valuation method to measure the value of public goods generated by a professional sports team, the Pittsburgh Penguins of the National Hockey League. The data and analysis indicate that a major league sports team can produce widely consumed public goods such as civic pride and community spirit and that the value of those public goods may be substantial. However, in the case of the Penguins, the value of the public goods is far less than the cost of building a new arena. Although the analysis of public goods generated by other teams in other cities might lead to different results, the results of this article call into question the widespread practice of government funding of sports stadiums and arenas because it appears that the costs borne by taxpayers exceed the benefits received.

Resource quality information and validity of willingness to pay in contingent valuation

Elicitation of valid statements of contingent value requires survey participants who are familiar with the environmental resource change. A primary purpose of the contingent market must be to assure familiarity by providing information. Information about resource quality is important when incompletely informed respondents, say nonusers, perceive resource quality which diverges from true quality. Differences in perceived quality and true quality can be influenced as respondents learn from information in the contingent market. By presenting survey participants with information about four wetlands of varying qualities we test for information effects in a dichotomous choice contingent market for wetlands allocation. We find that information about quality is a determinant of willingness to pay for wetland preservation. Information about resource quality presented in contingent markets will result in more valid valuations of changes in allocations of environmental resources.

Value of Public Goods from Sports Stadiums: The Cvm Approach

Many state and local governments have subsidized the construction of arenas and stadium for the use of professional sports teams. They often justify the subsidies by claiming the projects generate valuable public goods and positive externalities, though such benefits are difficult to measure. This article reports an application of the contingent valuation method (CVM) to measure the value of public goods generated by two proposed projects in Lexington, Kentucky: a new basketball arena for the University of Kentucky and a minor league baseball stadium. Neither project would generate sufficiently valuable public goods to justify public financing. Although the results cannot be generalized to other cases, they do shed light on some of the main issues involved, and they demonstrate the feasibility of applying CVM to the evaluation of the subsidized stadiums.

Measuring Recreation Benefits of Quality Improvements with Revealed and Stated Behavior Data

We propose a combined revealed and stated behavior estimation method to measure recreation benefits of a fixed quality improvement that directly addresses the issues of variation in environmental quality beyond the observed range and new participation induced by higher quality. We survey a sample of the general population, including non-participants, to obtain stated preference data for trips based on a policy-relevant estuarine quality improvement. Panel recreation demand models that take into account new participants induced by the higher quality are estimated and used to derive total consumer surplus.

Testing for Non-Response And Sample Selection Bias in Contingent Valuation: Analysis of a Combination Phone/Mail Survey

We use a combination phone/mail survey to test for possible sample biases in contingent valuation. We find no sample selection bias but do find non-response bias. We show how failure to correct for non-response bias distorts aggregate benefit estimates.

Incentive Incompatibility and Starting-Point Bias in Iterative Valuation Questions

We test for incentive incompatibility and starting-point bias to describe the effects of iterative valuation questions on willingness to pay. We compare double-, triple-, and multiple-bounded models with data from two surveys with similar designs of the valuation questions. We find that incentive incompatibility is present in both sets of data and starting-point bias is present in one. The efficiency of the willingness-to-pay estimate is improved in only one set of data. The potential loss from using iterative questions without controlling for both incentive incompatibility and starting-point bias is biased willingness-to-pay estimates. (JEL Q26)

Measuring Contingent Values for Wetlands: Effects of Information about Related Environmental Goods

A model of contingent market behavior is developed which emphasizes the role of household information about wetlands and related environmental goods.

Valuing Beach Access and Width with Revealed and Stated Preference Data

In this article we present results from a study of recreation demand for southern North Carolina beaches. We combine revealed preference and stated preference data in order to estimate the changes in recreation demand that might occur with beach nourishment and parking improvements necessary to satisfy the requirements for U.S. Army Corps of Engineers cost-share. We illustrate the numerous ways that hypothetical bias in stated preference data can lead to increases in the estimates of the economic benefits of recreation and recreation quality improvement. Hypothetical bias affects estimates of the number of trips and slope coefficients. Hypothetical bias does not affect elasticity or consumer surplus per-trip estimates. When the product of trips and consumer surplus per trip is taken as an estimate of consumer surplus per season, hypothetical bias leads to upwardly biased seasonal consumer surplus estimates. These results suggest that stated preference recreation demand data, in isolation from revealed preference data, may be suitable for estimation of consumer surplus per trip but not consumer surplus per season.

Are Hypothetical Referenda Incentive Compatible? A comment

In a recent article in this Journal, Cummings al. (1997) offer experimental evidence rejecting the hypothesis that a hypothetical referendum is an incentive‐compatible mechanism for obtaining the social value of, or willingness to pay for, changes in the allocation of environmental goods and services. While cautions in offering a blanket rejection of hypothetical referenda as a means of measuring economic values on the basis of their findings, the authors do suggest that at least in experimental settings respondents appear to behave differently when real money is changing hands. Wheather hypothetical situations adequately mimic real‐market situations has been debated in the contigent valuation literature since its inception (see Cummings, Brookshire, and Schulze 1986). Cummings et al.s finding of incentive incompatibility appears to offer strong evidence for the critics of hypothetical referenda.