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Referendum Design and Contingent Valuation

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Referendum Design and Contingent Valuation: The NOAA Panel's No-VoteRecommendationRichard T. Carson; W. Michael Hanemann; Raymond J. Kopp; Jon A. Krosnick; Robert CameronMitchell; Stanley Presser; Paul A. Ruud; V. Kerry Smith; Michael Conaway; Kerry MartinThe Review of Economics and Statistics, Vol. 80, No. 2. (May, 1998), pp. 335-338.Stable URL:http://links.jstor.org/sici?sici=0034-6535%28199805%2980%3A2%3C335%3ARDACVT%3E2.0.CO%3B2-ZThe Review of Economics and Statistics is currently published by The MIT Press.Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available athttp://www.jstor.org/about/terms.html. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtainedprior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content inthe JSTOR archive only for your personal, non-commercial use.Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained athttp://www.jstor.org/journals/mitpress.html.Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printedpage of such transmission.The JSTOR Archive is a trusted digital repository providing for long-term preservation and access to leading academicjournals and scholarly literature from around the world. The Archive is supported by libraries, scholarly societies, publishers,and foundations. It is an initiative of JSTOR, a not-for-profit organization with a mission to help the scholarly community takeadvantage of advances in technology. For more information regarding JSTOR, please contact [email protected]://www.jstor.orgMon Jan 21 20:06:55 2008- - - NOTES REFERENDUM DESIGN AND CONTINGENT VALUATION: THE NOAA PANEL'S NO-VOTE RECOMMENDATION Richard T. Carson, W. Michael Hanemann, Raymond J. Kopp, Jon A. Krosnick, Robert Cameron Mitchell, Stanley Presser, Paul A. Ruud, and V. Keny Smith with Michael Conaway and Kerry Martin": Abstract-This paper considers the effects for offering a "would-not-vote" option in contingent valuation (CV) questions framed using the referendum format. This approach arises from a suggestion made by the National Oceanic and Atmospheric Administration's (NOAA) panel on contingent valuation. The NOAA panel was asked to evaluate the use of this method for estimating the economic value of nonmarketed environmen- tal resources in the context of natural resource damage assessments. This test used the CV questionnaire developed for the study of the Exxon Valdez oil spill conducted by the State of Alaska with in-person interviews. The findings suggest that when those selecting the "would-not-vote" response are treated as having voted "against" the program (a conservative coding), offering this option does not alter (1) the distribution of "for" and "against" responses (2) the estimates of willingness to pay derived from these choices, or (3) the construct validity of the results. I. Introduction Contingent valuation (CV) surveys have been used increasingly to present respondents with economic tradeoffs for proposed programs involving nonmarket environmental resources. In 1993 the National Oceanic and Atnlospheric Administration (NOAA) appointed a panel of leading social scientists, cochaired by Kenneth Arrow and Robert Solow, to assess whether CV was capable of providing reliable estimates of lost passive use values (see Arrow et al. (1993)). The panel recommended that CV surveys should elicit valuation information by asking respondents how they would vote if faced with a particular program and the prospect of paying for it through specified means, such as higher taxes. Noting that CV referendum questions follow the common survey practice of offering only "for" or "against" answer options (though interviewers are instructed to accept "don't know" or "not sure" responses if they are volunteered), the panel recommended that CV studies should also explicitly offer respondents a "would not vote" (WNV) option.[ This note evaluates the effects of such a WNV option. Our test is based on an in-person CV survey instrument that was previously used Received for publication September 26, 1995. Revision accepted for publication February 25, 1997. * University of California San Diego, University of California Berkeley, Resources for the Future, Ohio State University, Clark University, University of Maryland, University of California Berkeley, and Duke University, respectively. Conaway is and Martin was a member of Natural Resource Damage Assessment, Inc. Thanks to Richard Bishop, T~udy Cameron, Nicholas Flores, Alan Randall, and two anonymous referees for comments on this research. All opinions expressed in this paper are those of the authors and should not be attributed to the National Oceanic and Atmospheric Administration, the Alfred P. Sloan Foundation, or any persons or organizations acknowledged above. The work described in this paper was funded by the Damage Assessment Center of the National Oceanic and Atmospheric Administra- tion as part of a natural resource damage assessment under contract 50-DGNC-1-00007. Additional support to prepare this paper was provided by the Alfred P. Sloan Foundation (Kopp) and the UNC Sea Grant Program (Smith).' The uanel's rewort recommended offering a "no vote" oution. exwlain- -ing it as providing a choice alternative comparable to deciding not to vote inan actual referendum. However, the report also acknowledges that further research was warranted on this issue: ". . . having urged that the availability of a no-vote option is an important component of the ability of the CV technique to mimic an actual referendum, we recommend further research into alternative ways of presenting and interpreting the no-vote option" Arrow et al. (1993, p. 4610). to value the effects of the Exxon Valdez oil spill. Two identical versions were administered to subsamples, one with and one without the WNV option. Our findings suggest that those selecting the WNV response when it is available would be most likely to select a vote "against" when the WNV option is not available. If WNV answers are treated conservatively as representing votes "against," then the addition of the WNV


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