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What determines respondents’ valuation uncertainty? Impact of subjective perceptions from the demand and supply sides

Published online by Cambridge University Press:  04 June 2024

Hongyan Su Open the ORCID record for Hongyan Su [Opens in a new window] ,
Jie He ,
Desheng Huang  and
Hua Wang
Hongyan Su
Affiliation:
School of Applied Economics, Renmin University of China, Beijing, China
Jie He*
Affiliation:
Département d'Économique, École de Gestion, Université de Sherbrooke, Sherbrooke, Canada
Desheng Huang
Affiliation:
Policy Research Center for Environment and Economy, Ministry of Environment and Ecology, Beijing, China
Hua Wang
Affiliation:
School of Environment and Natural Resources, Renmin University of China, Beijing, China
*
*Corresponding author: Jie He; Email: jie.he@usherbrooke.ca
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Abstract

Based on a contingent valuation method survey on air quality improvement in northern China, we construct several subjective perception determinants of respondents' valuation uncertainty from both the demand and perceived supply sides. Using the individual-level uncertainty measurements initially proposed by Wang and He (2011) and their alternative transformations, we analyze how these factors of demand and perceived supply sides affect people's valuation uncertainty. Our results demonstrate the significant contribution of these determinants in explaining respondents' uncertainty. On the demand side, people who ‘don't know much’ about benefits-related factors have the highest level of uncertainty, and those claiming to ‘know nothing’ most often report the lowest level of uncertainty. On the supply side, people who either do not trust or are not satisfied with the control policies tend to be more certain of their valuation. The subsequent analyses also suggest that these results be interpreted as negative certainty, which is attributed to a lack of interest.

Keywords

contingent valuation method (CVM)demand uncertaintiesdeterminants of valuation uncertaintyperceived supply uncertaintiessubjective perceptions

JEL classification

Q51: Valuation of Environmental Effects
Type
Research Article
Information
Environment and Development Economics , First View , pp. 1 - 26
Copyright
Copyright © The Author(s), 2024. Published by Cambridge University Press

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