TINKERING WITH VALUATION ESTIMATES: IS THERE A FUTURE FOR WILLINGNESS TO ACCEPT MEASURES?

Mt. Cardigan and the Mt Washington Observatory (at the top of Mt. Washington). This survey
asked respondents to rate photographs of Mt. Jefferson, a mountain in the Class 1 Presidential
Dry River airshed, at various visibility conditions. Each photograph was correlated with a
measurement of optical extinction measured by a nephelometer at the site where the photograph
was taken. Results of this survey show that individuals were able to consistently perceive
different levels of visibility. That is, respondents were clearly able to differentiate between
improvements and degradations to visibility (Hill, 2000).

The Model

The visibility study which provided the data for this paper was subject to considerable
analyses to examine relationships, test hypotheses, and examine functional forms (Harper, 2000;
Stevens et al. 2000; Porras, 1999). Based on these previous uses of the data, a parsimonious
form of the model to be tested was developed:

Pr(bid acceptance) = Pr(WTP>Bid) or Pr(WTA<Offer)

where WTA/WTP = F(INCOME, FVISIT, BID, VISLOSS)

It is common to assume a linear function:

WTA/WTP = α + β₁ INCOME + β₂ FVISIT + β₃ BID + β₄ VISIBILITY+ ε
where variable descriptions are provided in Table 1. This basic formulation was the same for
both the WTP and the WTA models. It was expected that the BID and VISIBILITY² variables
would have opposite signs across the two models. For example, the BID variable was expected
to have a positive effect on the WTA model and a negative effect on the WTP model. Both log
and semi-log forms were examined in the current analysis.

²It is worth noting that the changes in visibility from status quo depicted were quite large,
so that care should be taken in interpretation of this variable.

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