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Incorporating zero and missing responses into CVM with open-ended bidding: willingness to pay for blue skies in Beijing


Based on decision theory, this paper suggests a four-hurdle model to deal with zero and missing responses in the contingent valuation method with open-ended bidding, which is used to analyze the willingness to pay for blue skies in Beijing where air pollution is known to be very serious. The mean and the median of the predicted willingness to pay for blue skies per household are, respectively, 120.15 and 128.60 yuan, less than 0.2% of the per capita annual disposal income in Beijing. This is very low compared to results from studies of other countries. The empirical results also indicate that the four-hurdle model is superior to the Tobit model and raw data estimation.

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We are deeply grateful to Richard Ready for his valuable advice, and also to Yinchu Zeng for generously sharing his data. We are responsible for any errors or omissions.

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Environment and Development Economics
  • ISSN: 1355-770X
  • EISSN: 1469-4395
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