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

• Published in: Environment and development economics 2024-10, Vol.29 (5), p.379-404
• Main Authors: Su, Hongyan, He, Jie, Huang, Desheng, Wang, Hua
• Format: Article
• Language: English
• Subjects: Air quality; Air quality measurements; Attitudes; Bids; Carbon offsets; Contingent valuation; Demand analysis; Family income; Quality control; Quality improvement; Respondents; Self report; Uncertainty; Uncertainty analysis; Valuation; Water quality; Willingness to pay
• ISSN: 1355-770X; 1469-4395
• DOI: 10.1017/S1355770X24000159

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.