Ultimate Writer

In this assignment, you will be writing about the BENEFITS of your project. You do NOT need to talk about ALL the benefits (that’s more of a dissertation than a group project!) – just pick specific benefits that work well with the techniques you are asked to use.

You will need:

1. A brief (one or two sentence) description of your project.

2. (25%) CONTINGENT VALUATION WTP SURVEY DESIGN

You may find the lecture notes on survey design, as well as the following short paper, very useful for this section. Additional resources are listed in the bibliography at the end of this assignment .

Zainudin, N. & Begum, H. (2016). Survey Designing for Contingent Valuation Studies. Proceeding of the 2nd International Conference on Economics & Banking 2016 (2nd ICEB), 381 – 387. Retrieved from https://www.researchgate.net/publication/303750748_SURVEY_DESIGNING_FOR_CONTINGENT_VALUATION_STUDIES

UVic does NOT allow students to conduct surveys without approval from the human research ethics board, so please do NOT actually ask anyone the questions on your survey, unless they are current ECON 416 students.

a. Find a benefit from your project that can be measured via willingness to pay estimates derived from surveys (e.g. clean air).

b. Choose one of the elicitation formats we covered in class (e.g. bidding game, payment card, open ended question, dichotomous choice, etc.) and briefly explain why your chosen format is the most suitable for your question. (e.g. ‘We chose a payment scale because’…)

c. Create an appropriate scenario for your survey. As mentioned in Lecture 14, you must describe the relevant change, the constructed market and the method of payment. The article you were asked to read for Assignment 6[footnoteRef:1] has an excellent example where this was done properly: [1: Wang, H. & Mullahy, J. (2006). Willingness to pay for reducing fatal risk by improving air quality: A contingent valuation study in Chongqing, China, Science of the Total Environment, 367, pp. 50 – 57. Retrieved from http://www.sciencedirect.com/science/article/pii/S0048969706001938   ]

“Assume that the Chongqing Government is thinking of implementing a new city program to reduce air pollution. It is expected to cut one quarter of premature deaths due to air pollution, i.e. the mortality due to air pollution will be reduced from 20/ 100,000 to 15/ 100,000 per year. The number of non-fatal air pollution related health problems would not be affected by the program. In order to implement this program, the government has to collect a special fee to cover its cost.” (Wang & Mullahy, 2006)

d. Construct the question (e.g. “How much are you willing to pay for this scenario?” or “Would you pay $100 for this?”) and any additional material required by your chosen format (e.g. bidding games, follow-up questions, etc. For examples see Boxes 6.1 to 6.6 of the health care textbook, found on pages 102 – 105.)

If you chose an open-ended question, a format that requires no such additional material, for this section you must explain how and why you will aggregate responses (e.g. Median? Mean?) and how you would deal with protest votes.

e. Choose a method for asking your question (mail survey? Face to face interview? Telephone interview?) and briefly explain why you chose it.

3. (20%) TRAVEL COST METHOD

a. Find a benefit from your project that can be measured via travel cost estimates (e.g. reduction in travel time for a transport project, or cost of traveling to a vaccination site for a health care project).

b. Use micro-costing or macro-costing to add up the non-time costs of travel (e.g. gasoline, bus tickets). Be sure to cite appropriate sources for your values and write down any assumptions.

c. Follow standard practice, and value travel time as a % of the appropriate average wage. Cite appropriate sources for your average wage value, and for the specific % you used.

d. Add the values from parts b. and c. to come up with a total travel cost. For this assignment, you do NOT need to worry about discounting.

4. (5%) FINDING A PAPER FOR BENEFIT TRANSFER

a. Find a paper that you can use as a source of a value for benefit transfer. (e.g. You could use Table 4 in (Wang & Mullahy, 2006) as a source of a value for the WTP for saving a life via cleaner air.) Performing a Google Scholar search on your terms of interest is usually the best place to start. Cite this paper using APA format and write down both the value, and a description of what the value is. (e.g. ‘Median WTP to save a statistical life via cleaner air: $34,458 [2005 US dollars]).

b. Briefly explain how this is a benefit that applies to your project. (e.g. ‘Our project will result in cleaner air, which is expected to save lives.’)

5. (20%) BENEFIT TRANSER

a. Use the equation transfer OR income adjustment benefit transfer methods to transfer the benefit from 4. to your project. (See Assignment 7.) Cite sources for your values in APA format, and list any assumptions you make.

b. Adjust your values for inflation and currency as appropriate (e.g. turning 2005 US dollars into 2017 Canadian dollars). E-mail me at [email protected] if you need help with this, and I will be happy to assist.

c. [BONUS] Use equation transfer AND income adjustment for up to a 5% bonus on your assignment (the maximum mark is 100%).

Contingent Valuation Survey Design Resources

Zainudin, N. & Begum, H. (2016). Survey Designing for Contingent Valuation Studies. Proceeding of the 2nd International Conference on Economics & Banking 2016 (2nd ICEB), 381 – 387. Retrieved from https://www.researchgate.net/publication/303750748_SURVEY_DESIGNING_FOR_CONTINGENT_VALUATION_STUDIES

· A very short and clear guide on Contingent Valuation survey design. Its main limitation is that it focuses only on iterative bidding for its example.

Whitehead, J. C. (2005). A Practitioner’s primer on the contingent valuation method. In Contingent valuation and economic theory, 66 – 91. Retrieved from http://home.wlu.edu/~caseyj/envecon2013_files/Whitehead%20CH03.pdf

· If you found the previous article TOO short, this book chapter provides a chatty (no math), detailed explanation of how to use contingent valuation and how to design appropriate questionnaires.

Carson, R. T. (2000). Contingent Valuation: A User’s Guide. Environmental Science & Technology, 34(8), 1413 – 1418. Retrieved from https://econweb.ucsd.edu/~rcarson/papers/CVusersguide.pdf

· A short and chatty (no math) discussion of the uses of contingent valuation, and some common errors and difficulties that practitioners may run into.

Loomis, J. B., Gonzalez-Caban, A. & Gregory, R. (1996). A Contingent Valuation Study of the Value of Reducing Fire Hazards to Old-Growth Forests in the Pacific Northwest [USDA Pacific Southwest Research Station Research Paper PSW-RP-229-Web]. Retrieved from https://www.fs.fed.us/psw/publications/documents/psw_rp229/psw_rp229.pdf

· A very honest and useful discussion of how a contingent valuation survey was actually designed and implemented for a specific purpose. Worth skimming, at least.

Spash, C. L. (2008). Contingent valuation design and data treatment: if you can’t shoot the messenger, change the message. Environment and Planning C: Government and Policy, 26, 34 – 53. Retrieved from https://www.clivespash.org/wp-content/uploads/2015/04/Spash_on_CVM_2008_EPC_Final.pdf

· This paper will be too detailed for most of you, but anyone interested in doing survey design in a professional capacity in the near future will read it. The paper questions some uncomfortable assumptions about how people behave that are implicit in most contingent valuation surveys (and in the analysis of data obtained from them).

Contingent Valuation. (n.d.). Retrieved from http://web.mit.edu/urbanupgrading/urbanenvironment/tools/contingent-valuation.html

· A short and sweet one-page discussion of Contingent Valuation, followed by a worked example in the form of a well-designed contingent valuation survey.