Consumer Economics 2: Theory and Application for Valuing Non-Market Goods
Prof. Xiaohua YU Ph.D., University of Göttingen
Email: firstname.lastname@example.org; Tel: 0551-3919574
Office: MZG 2027
Introductory econometrics and Stata Software
The techniques of valuating non-market goods are widely used for agribusiness and environmental economics. This course is designed for graduate-level students at the University of Goettingen and some other related universities, and helps understand the fundamental economic theory of non-market goods and master basic econometric techniques for applications.
This course includes three parts:
Part I introduces the basic theory;
Part II introduces the econometric techniques; and
Part III is practice with the real data.
- Measurements of Welfare Changes
Part I: Basic Theory
- Individual Preferences and Demand
- Welfare Measures for Changes in Prices
- Welfare Measures for Changes in Factor Prices
- Welfare Measures for Quantity Changes
- Aggregation and Social Welfare
- Environmental Quality as a Factor Input
- Individual Demand for Environmental Quality
- The Structure of Preference: Complements or Substitutes
- Discrete Choice Models and Measures of Values
- Welfare Economics of Stated Preference Questions
- Validity of Stated Preference Welfare Measure
- Psychological Fundament of Stated Preferences
- Individual Preferences and Expected Utility
- Aggregation and the Welfare Criterion
- Revealed Preference Methods under Uncertainty
Part II: Methods and Econometric Techniques
- Maximum Simulated Likelihood
- Probit and Logit
- Tobit, Cragg Model, and Heckman Model
- Continuous Methods: Open-Ended and Payment Cards
- Discrete methods: Single-Bounded and Double Bounded
- Experiment Design
- Econometric Estimation
- Auction Design
- WTP Estimation
- Basic Theory
- Model Specification and Estimation
- Measurement of Welfare Changes
Part III: Practice
Teaching Method: Lectures + Lab Sessions
Grades: Participation and Exam
Readings and References
- Antle J. M. 2001. “Economic Analysis of Food Safety”. B. L. Gardner & G. C. Rausser (ed.) Handbook of Agricultural Economics, Vol.1B (Chapter 19): 1083-1136.
- Dannenberg A. 2009“The Dispersion and Development of Consumer Preferences for Genetically Modified Food - A meta-analysis”, Ecological Economics, Vol.68: 2182-2192.
- Deaton A. and J. Muellbauer. 1980. Economics and Consumer Behavior. Cambridge: Cambridge University Press.
- Carson R.T. and W. M. Hanemann. 2005. “Contingent Valuation”. Handbook of Environmental Economics, Chapter 17, Vol.2: 821-936.
- Fischhoff A. 2005. “Cognitive Processes in Stated Preference Methods”. Handbook of Environmental Economics, Chapter 18, Vol.2.
- Freedman A.M. 2003 The Measurement of Environment and Resource Values: Theory and Methods (2. Edition), Resource for the Future, 2003.
- Gao Z., T. C. Schroeder and X. Yu, 2010 “Consumer Willingness to Pay for Cue Attributes: the Value beyond Its Owen”, Journal of International Food and Agribusiness Marketing, Vol. 22(1): 108-124.
- Gao Z., L. House and X. Yu (2010): “Using Choice Experiment to Estimate Consumer Valuation: the Role of Experiment Design and Attribute Information Loads”. Agricultural Economics, Vol. 41(6):555-565. http://ageconsearch.umn.edu/handle/49406
- Hanemann M. 1984. “Welfare Evaluations in Contingent Valuation Experiments with Discrete Responses” American Journal of Agricultural Economics, Vol. 66(3): 332-341.
- Hanemann M., J. Loomis, and B. Kanninen, 1991. “Statistical Efficiency of Double- Bounded Dichotomous Choice Contingent Valuation.” American Journal of Agricultural Economics, Vol. 73(4):1255-1263.
- Liu Y., Y. Zeng and X. Yu, 2009: Consumer Willingness to Pay for Food Safety in Beijing: A Case Study of Food Additives. Paper at the 27. Conference of International Association of Agricultural Economists (IAAE), 16-22 Aug., Beijing
- Lusk, J.L. and T.C. Schroeder 2004. “Are Choice Experiments Incentive Compatible? A Test with Quality Differentiated Beef Steaks.” American Journal of Agricultural Economics, Vol. 86(2): 467-82.
- Maddala, G.S. (1983) Limited Dependent and Qualitative Variables in Econometrics, Cambridge University Press.
- Nelson J.P., Kennedy P.E., 2008, “The Use (and Abuse) of Meta-Analysis in Environmental and Natural Resource Economics: An Assessment”, http://ssrn.com/abstract=1117490, 08/2008.
- Ready R. C., J. C. Buzby and D. Hu 1996. “Differences between Continuous and Discrete Contingent Value Estimates.” Land Economics, Vol. 72(3): 397-411.
- Ready R.C. and D. Hu 1995 “Statistical Approaches to the Fat Tail Problem for Dichotomous Choice Contingent Valuation.” Land Economics, Vol. 71(4): 491-499.
- Ready R. C., S. Navrud and W. R. Dubourg 2001. “How Do Respondents with Uncertain Willingness to Pay Answer Contingent Valuation Questions?” Land Economics, Vol. 77(3): 315-326.
- Shorgen J. A..2005. “Experimental Methods and Valuation”. Handbook of Environmental Economics, Chapter 19, Vol.2.
- Vossler C. A., M. Doyou, and D. Rondeau (2012) “Truth in Consequentionality: Theory and Field Evidence on Discrete Choice Experiments.” American Economic Journal: Microeconomics: 2012:4(4): 145-171.
- Yu X. and David Abler (2010): “Incorporating Zero and Missing Responses into CVM with Open-Ended Bidding: Willingness to Pay for Blue Skies in Beijing.” Environment and Development Economics, Vol.15: 535-556
- Yu X., Z. Gao and Y. Zeng (2014). “Willingness to Pay for the ‘Green Food’ in China.” Food Policy