Environmental and Resource Economics 14: 131150, 1999. 1999 Kluwer Academic Publishers. Printed in the Netherlands.

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Protest Responses in Contingent Valuation

BRADLEY S. JORGENSEN1,, GEOFFREY J. SYME1, BRIAN J. BISHOP2 and BLAIR E. NANCARROW1
1 Australian Research Centre for Water in Society, CSIRO Land and Water, Wembley 6014 Australia; 2 School of Psychology, Curtin University of Technology, Bentley, 6102 ( present address:

Department of Rural Sociology, University of Wisconsin, 1450 Linden Drive, Madison, WI 53706, USA; e-mail: bjorgensen@facstaff.wisc.edu) Accepted 22 October 1998 Abstract. A signicant number of respondents to contingent valuation surveys tend to either state a zero bid, or refuse to state a bid at all, for reasons associated with the process of valuation. These protest responses are routinely removed from contingent valuation samples because it is assumed that they are not indicative of respondents true values. The censoring of protest responses has led to the emergence of a denitional controversy. One view is that the denition of protest responses and the rules for censoring them are dependent on whether the practitioner conceives of the contingent valuation survey as a market or as a referendum. However, what is not acknowledged is the possibility that protest responses and their meaning may vary according to the type of good being valued, the elicitation format, and the interaction between these elements and external factors. This potential renders the development of unambiguous rules for censoring protest responses difcult. Moreover, when willingness to pay is viewed as a behavioural intention, it becomes important to determine what the responses actually mean. This approach does not assume an interpretative position a priori against which the responses should be judged, but seeks to inform an existing understanding which is inadequate. Key words: contingent valuation, protest responses, willingness to pay, stormwater pollution JEL classication: H4, Q3, D7

1. Introduction In all contingent valuation (CV) analyses, a proportion of respondents respond that they would refuse to pay any amount for a public good because of some mitigating circumstance (e.g., not being in a position to afford it), or some dissension regarding a procedural aspect of the contingent valuation itself (e.g., the perceived unfairness of having to pay extra). These latter types of responses are viewed as threats to the validity of benet-cost analysis (BCA) to the extent that a person is deemed to value the good in question, but not be willing to pay for it. For those who refuse to pay for some mitigating reason, the response is not treated as a protest response because it is accepted in economics that money is not a perfect indicator of utility as some people have more of it than others (Green and Tunstall 1991). However, when a respondent states a zero dollar amount in reaction to some

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unintended aspect of the measurement process, the response is considered either suspect or inappropriate. From an economic viewpoint, such responses cannot be included in BCA because they do not represent true economic values. The problem of protest responses in CV also concerns the measurement of willingness to pay (WTP) even when BCA is not the goal of the valuation process. The open-ended (OE) WTP distribution is usually censored at zero although the latent distribution is assumed to be normal and bipolar (Cameron 1988). These oor effects are thought to be attributable, in part, to the fact that monetary units are not expressed in negative terms. To this end, the congregation of bids around zero is considered to be an artifact of the measuring instrument. In this sense, the removal of a large proportion of zero responses achieves a better symmetry with the theoretical prescription as well as with statistical techniques that are sensitive to extreme departures from normality. The censored distribution of OE WTP is alleviated by the use of the indirect dichotomous choice (DC) technique. The DC technique, however, is still sensitive to the potential for noneconomic values that can impinge upon the measurement of the latent variable and threaten the assumption of true values in BCA. Nevertheless, since respondents are not required to state a monetary value, there is no requirement for the distribution to resemble the theoretical prescription of latent WTP. Rather, the latent distribution is estimated indirectly from parameters derived from logistic or probit regression (Cameron and James 1987; Hanemann 1984, 1989).

2. The Censoring of Protest Responses Lindsey (1994) is the rst author to have systematically addressed the issue of the meaning of protest votes. His work is the basis on which this empirical work has been conceived. Lindsey noted that the identication of protest responses differs depending on whether a market rational or a referendum model is used. According to Lindsey, the market model posits the existence of a true value that is independent of the measurement process. In this sense, protest responses are those that are indicative of the undue inuence of contextual elements of the CV (e.g., the payment vehicle, information constraints, judgments of procedural fairness). The referendum model, however, is less concerned whether a zero response represents a true valuation and is more focused on whether it reects intended behaviour. For this reason, the referendum model is less stringent in terms of the classication of protests because many of the protest reasons are considered to be legitimate inuences upon actual behaviour (Lindsey 1994). (This argument, however, does not consider that the distinction between true values and actual behaviour is irrelevant in terms of BCA. From a standard economic perspective, true values are manifest in actual behaviour to the extent that choices reect preferences.) Syme and Jorgensen (1994) reported that the application of protest response criteria appeared to be ad-hoc in practice. A cursory review of CV research revealed some disparity in studies where the identication rules were made explicit. For

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example, in a footnote, Sutherland and Walsh (1985) classied only zero responses associated with a rejection of the payment vehicle as protest responses. Again in a footnote, Whittington et al. (1992) reported their exclusion of zero responses for reasons other than ability to pay or worth of the public good. In a study aimed at assessing sampling and selection bias due to the removal of protest responses, Edwards and Anderson (1987) reported the censoring of zero bids for reasons other than the lack of current or future use benets. These included respondents who indicated that either (a) the state government should pay, (b) those causing the pollution should pay, (c) they could not afford to pay anything at that time, or (d) failed to cite a reason at all. Furthermore, Milon (1989) excluded zero bids if respondents indicated either that they did not understand the question, rejected the concept of paying for the good, or did not give a reason for their response. Finally, Hoevenagel and Van Der Linden stated only the following: Protest bids were typically zero bids with elucidations, such as those who are responsible for the environmental pollution should pay. In these cases, the stated zero amount was not considered to be a true reection of the respondents value for a clean environment. (Hoevenagel and van der Linden 1993: 232) These examples highlight a number of important considerations. First, in practice there does not appear to be any agreement over what constitutes a protest response let alone a comprehensive rationale. Second, CV practitioners do not appear to apply protest response criteria within the boundaries delineated by the market and referendum models. For example, both Milon (1989) and Edwards and Anderson (1987) employed the market model but, nevertheless, censored zeros associated with an inability to pay. Similarly, Whittington et al. (1992) used the referendum model, but also adopted criteria that rules out most of the reasons deemed acceptable by Lindsey (1992) while accepting others deemed suspect by that author. Thus, the practice of censoring protest responses appears to vary across surveys using different conceptual models and in cases where the same CV model has been employed. In this sense, two CV analyses conducted independently on the same good with comparable population samples may lead to different mean and median WTP estimates depending upon how the practitioner has organised the data. According to Lindsey (1992) this would be less of a problem if CV analyses made explicit the rationale used to identify protest responses so that surveys could be evaluated on theoretical grounds. Indeed, it is a common characteristic of the published literature for comments regarding protest criteria to be either absent or vague. Nevertheless, it is not clear that conventions to censor protest responses should be developed (Jorgensen and Syme 1995). Halstead, Luloff and Stevens (1992) stated that the censoring of protest bids may bias aggregate willingness to pay estimates in a manner that is not easily predicted. They dened protest bids in broad terms to include both zero bids associated with the goods that respondents actually value, and positive bids that represent outliers in the distribution of responses. The authors argued that the removal of

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such bids can only be sustained if the characteristics of protest bidders do not differ signicantly from those of other respondents whose bids are accepted as legititmate. Halstead et al. (1992) considered the presence of protest bids as a bias to the extent that they are deviations from true values. The rationale behind the notion of true value is that it is synonomous with behaviour because such values are revealed in market transactions. Thus, true value will correspond perfectly with behaviour when biases are removed. They argued that an alternative to censoring protest responses was to include the protest bids as legitimate zero valuations. This practice can be supported when the CV survey is aimed at measuring the values of policy options rather than a specic good. When policy proposals are being valued, the stated values can legitimately reect factors associated with such things as the provision of the good and the method of payment. However, Halstead et al. argued that if a CV survey is primarily concerned with obtaining a value for the good in question and/or the survey instrument reects an attempt to realistically frame a contingent market rather than to evaluate a potential option, this argument may not hold (Halstead et al. 1992: 162). Lindsey (1994) illustrated the implications of the different rationales using data from a CV mail survey used to determine the value of a stormwater program aimed at nutrient reduction in Chesapeake Bay (Lindsey 1992). In his study, an openended valuation was sought, but respondents were asked to think of the task in terms of a referendum: What is the most you would be willing to pay each year in stormwater utility charges before you would vote no in the referendum? (Lindsey 1992: 123) Following this question, respondents were given the opportunity to register their protest responses by nominating the most important reason from a given set which included the opportunity to state a novel reason. Table I, taken from Lindsey (1994), shows the distribution of the protest responses and their likely identication under the two models. Of the total sample (N = 824), 33% reported zero bids and, of these 98% stated a protest response. From these results, Lindsey (1994) suggested that reasons 2, 3, and 6 are indicative of information constraints, such that their associated zero responses are not accurate representations of true WTP, independent of the conceptual rationale involved. Nevertheless, since people do express voting preferences, despite being uninformed about an issue, the rationale for censoring such zero responses is weaker in the referendum model than in the market model. Similarly, responses 4, 5, and 7 provide no information about the respondents value for the public program, but are legitimate inuences on actual voting behaviour. Given these various protest reasons, Lindsey (1994) noted that there is a large potential for inuencing the size of the WTP mean and median. However, when the mean for the referendum model was calculated with and without protest responses ($42.00 and $43.60, respectively), the resulting aggregate estimates were not signicantly different. For the market model, on the other hand, mean WTP calculated

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Table I. Protest reasons reported in Lindsey (1994). Protest reasons % of total protests 3 6 1 28 19 5 25 13 Protest response classication Market model Referendum model No Yes Yes Perhaps Perhaps Yes Perhaps Perhaps No Perhaps Perhaps No No Perhaps No No

1. 2. 3. 4. 5. 6. 7. 8.

That is what it is worth to me Didnt want to place a dollar value Object to way question presented Too much waste in government Am opposed to all new taxes Not enough information Industry should pay Othera

a Lindsey (1992) noted that many respondents in this category cited income constraints as reasons for stating zero willingness to pay.

when responses 2, 3, 6 and 7 were censored was signicantly different to the mean calculated from the data that censored responses 2 through 7 ($47.60 and $61.20, respectively). This latter statistic was also signicantly larger than the estimates based on the referendum rationale. Lindsey concluded that CV practitioners who use a referendum model need to second-guess the data to a lesser extent.

2.1. S HOULD

PROTEST RESPONSES BE CENSORED ?

A number of issues are associated with the practice of censoring protest responses. First, Jorgensen and Syme (1995) pointed out that, even if a generally accepted argument can be developed to dene the most defensible model for omitting responses, it is likely that protest bids and their meaning will vary according to the good being valued, the elicitation technique, the CV model, and the interaction between these elements and other external factors. If the distribution of protest responses is not independent of the willingness to pay question format, for example, mean and median values will not be comparable for two independent analyses that utilize the same conceptual model. Moreover, if the distribution of protest responses varies by external factors such as household income, censorship will likely result in CV samples that are not representative of the populations from which they were drawn. While Desvousges et al. (1993) also recognised that no unambiguous protest standard exists, they argued for a conservative criteria based on their conception of good CV practice. They reported that 8% of the zero responses to their water fowl survey and 12% of those in their oil spill CV were censored as protest responses, but gave no indication of the nature of the responses. Irrespective of the criteria adopted, many respondents may be excluded from economic benet estimations on an ad-hoc basis.

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Second, Lindsey (1992) and CV practitioners generally, appear to assume that respondents have only one salient protest reason. However, respondents may believe that a good is worth nothing for a number of other related reasons. If respondents are given the opportunity to offer a variety of salient reasons for stating zero bids, the task of identifying protest responses might require a number of quite different rationales. To this extent, so-called legitimate responses such as that is what its worth to me or all I can afford might be viewed as illegitimate if respondents cite them along with reasons that would substantiate censorship. This previous point is related to a third issue raised by Jorgensen and Syme (1995). In both the market and referendum models, Lindsey (1992) gave consideration to omitting respondents who stated that they would offer nothing because not enough information was given in the survey. However, many purchasing decisions are made under uncertainty, and many people who have offered to pay may also feel as though they do not like the question or do not have enough information. Therefore, if respondents are to be screened out on the basis of lack of information, appreciation of the question or any other criteria, that process should be independent of the payment offered. Jorgensen and Syme (1995) also argued that Lindseys (1992) comparative analysis of protest responses associated with different CV models is based on the distribution of responses gained from the use of an OE WTP question which included a payment card in a referendum format. That is, Lindsey applies rules for the market model on data elicited with a referendum WTP question. Thus, his comparison is somewhat inconsequential because a market model would likely elicit a different distribution of protest responses. Moreover, the distribution of protests is also likely to vary across DC and OE elicitation techniques. For example, an individual may protest the lack of information when asked to consider an OE question, but protest the lack of procedural fairness in the DC method if asked to pay a large sum. Thus, applying protest criteria formulated from a market model to data elicited in a referendum format appears to assume unwarranted equality in the potential distribution of protest responses. In a reply to this criticism, Lindsey remarked that his WTP question is a hybrid between the market and referendum models, and that the use of responses to illustrate how certain bids and outliers might be treated given different assumptions is not inappropriate (Lindsey 1995: 402). However, the requirement of the hybrid question to actually construct a WTP value with the assistance of an unanchored payment card is clearly representative of the OE elicitation technique. As with comparisons between CV market and referendum models, it remains an open question whether the distribution of protest responses differs between elicitation techniques within these models. The DC format is apparently easier to answer in that it is reasonable to assume that it would evoke fewer protest responses associated with lack of information (Sellar, Stoll and Chavas 1988). On the other hand, because some volition is taken away from the respondent following the imposition of a given price, respondents may perceive the DC method as being relatively

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unfair. This is perhaps more likely the case for those low-income respondents asked to pay for the proposal at a comparatively high price. It is important, therefore, to decide what it is that CV questions really measure. In the economists view, it is the dollar value of a nonmarket good such that responses are consistent with economic axioms (e.g., transitivity, completeness, etc.). From a psychometric viewpoint, the exclusion of responses necessary to meet such assumptions create serious concerns about the lack of theoretical validity of the CV method. One must feel suspicious of a methodology if, before or after questioning, rules are made for omitting responses. As behavioural intentions, WTP responses are problematic when exclusion criteria are formulated. For example, people may nominate amounts beyond their income constraints, or zero amounts because they consider it unfair to have to pay extra. Such responses should not be omitted because they are in some way deemed inappropriate. Rather, the practitioners interpretation of the response is inadequate when WTP is viewed as a behavioural intention. This is independent of the method used to elicit the behavioural intention or the conceptual rationale behind it (Jorgensen and Syme 1995).

3. Research Questions Two main hypotheses pertaining to the interpretation of protest responses and their distribution given different CV elicitation formats emerge from the previous discussion: (1) The distribution of protest beliefs are independent of the WTP question format within a market model, and (2) Variability among protest beliefs can be explained by respondents evaluations of the fairness of the act of paying. The rst question can be answered by determining differences in the frequencies of particular types of protest responses across the elicitation formats. As noted earlier, the DC method may evoke a greater proportion of procedural fairness judgments associated with the fact that respondents are faced with the acceptance or rejection of a given price. Presumably, such negative reactions would be more evident for those respondents who were asked to pay relatively large amounts of money. It is also plausible that, given a high price, respondents may either experience spending constraints or redene the nature of the issue at hand and downplay its personal relevance. For the OE method, information constraints may be more frequently observed than in the DC group particularly if respondents in the latter condition mistakenly perceive the price as pertaining to project costs rather than to the range of possible benets. This analysis can be extended to address the second hypothesis by tting a latent variable model to the observed data to determine the meaning of particular protest responses. For example, in Lindseys (1994) analysis, legitimate responses (e.g., I cant afford to pay at the moment) and problematic responses (e.g., I pay enough to the government already) may be representative of the same latent dimension. Moreover, this dimension may also underpin responses that are widely accepted in

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the CV literature as illegitimate (e.g., There is not enough information for me to answer). That is, responses indicating income and information constraints may be representative of an underlying fairness dimension. This sort of analysis highlights the discrepancy that may occur between researchers appraisals of the content of an item and the latent source of its variability. Lindsey (1994, 1995) does not discuss these issues although he is willing to interpret some protest reasons (e.g., items, 2, 3, and 6, in his analysis) as representative of a single underlying issue. 4. Method Face-to-face interviews were conducted with 1193 householders in the Australian state capital cities of Brisbane (n = 300), Melbourne (n = 300), Perth (n = 300) and Sydney (n = 293). The sample was stratied on three levels of income (high, medium and low) according to information provided in the Australian Bureau of Statistics (ABS) 1991 census for Local Government Areas. The sample was also stratied on proximity to a major water body (either near or far). Households were deemed near water if their occupants resided within ve to ten minutes drive from any large body of water. The CV survey included a range of questions that measured respondents attitudes toward, and knowledge about, stormwater pollution in their city of residence (see Nancarrow, Jorgensen, and Syme (1995) for the complete interview schedule). The willingness to pay section of the survey included a scenario that was read to the respondents by the interviewers as well as being presented in written form on a prepared card (see below). This information was presented together with photographs showing ways that stormwater quality can be improved. The instructions were: There are a number of ways that the government authorities can control urban stormwater runoff. For example, drains can be modied, litter traps can be installed, and ponds and other facilities can be built to trap pollutants before they enter the wetlands, waterways and ocean. (Show set of photographs No. 4, showing ways that quality can be improved). However, the provision of these facilities will be costly. The next few questions concern the possibility of your willingness to pay for programs to control urban stormwater runoff. Some people have said that they are concerned with the waste of money in Government programs, but for now, I would like you to suppose that any money that your household might be willing to pay, in addition to what it already pays, would be spent honestly and only for the purpose of reducing the effects of urban stormwater runoff on the water quality in the wetlands, waterways and ocean around [Brisbane, Sydney, Melbourne, Perth]. It is important to know how much reducing the effects of stormwater on the water quality of the wetlands, waterways and ocean is worth to you.

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When you answer these questions, I would like you to think about: Your current household income Your current household expenses Other possible uses for your household income.

Also bear in mind that your household already pays for existing levels of water quality in the ocean and the rivers around [Brisbane, Sydney, Melbourne, Perth]. As a taxpayer, some of your current local, state and federal taxes pay for current water quality programs such as sewage treatment. As a consumer, the prices of products you buy in the shops also includes the cost of water pollution controls. This scenario, in conjunction with the information about stormwater presented earlier in the interview, served to dene the nature of the public good, the conditions responsible for the degradation, possible remedial actions, and household budget constraints. Respondents were randomly assigned to one of two willingness to pay elicitation techniques: dichotomous choice and open-ended payment card. It was planned to assign equal numbers of respondents to each elicitation technique, however, an extraneous event occuring in the application of the survey meant that an extra 61 participants were asked the DC question. Therefore, after accounting for two nonresponses, the group sizes were N = 658 and N = 533 for the DC and OE methods, respectively. The DC question was framed so as to reect an annual government charge for stormwater pollution abatement, as follows: Keeping these factors in mind, would your household agree to pay $ more each year in local and state charges for control programs to reduce the effects of urban stormwater runoff on the water quality of the wetlands, waterways and ocean? (YES/NO/DONT KNOW). Prices for the DC method were ascertained from responses to pilot testing and from reviews of the literature (e.g., Lindsey 1992). In contrast to previous studies, these prices were assigned to respondents within income strata: $5, $10, $25, $40, $50 (low income); $20, $35, $100, $160, $200 (medium income); $30, $70, $175, $280, $350 (high income). This strategy was taken to reduce the potential for negative attributions toward the water agencies that could occur if low income respondents were confronted with prices perceived as exceedingly high. In this respect, the water agencies were concerned with the possibility of compromising community perceptions of trust in their organisations, particularly when no formal plans existed to introduce additional household payments for stormwater management. The OE question followed the same general format used in the DC approach: Some people nd these cards useful, so I would like you to look at the card which shows you how much, on average, households pay for goods and services each year. Keep in mind other possible uses for your household income.

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What is the most your household would agree to pay each year in higher local and state charges for control programs to reduce the effects of urban stormwater runoff on the water quality of the wetlands, waterways and ocean? ($ PER YEAR/REFUSED TO PAY/DONT KNOW). Respondents were given the opportunity to consult a payment (or household expenditure) card relevant to their particular household income to assist in determining a response to the WTP question. The amounts on the payment cards were developed on the basis of those already applied in the water quality studies of Mitchell and Carson (1989). The benchmarks (i.e., goods with a dollar amount attached to them) were taken from information presented in the ABS Household Expenditure Survey (Castles 1990) and included estimates of the average amount of money spent on a range of nonenvironmental private and quasi-private goods by householders during the period 1988 to 1989. The use of benchmarks on payment cards was intended to remind respondents that they are already paying for many goods such that their budgets are limited. It is important, however, that only goods not directly related to the amenity being valued be used as benchmarks so they do not unduly inuence the elicited value for the reference good (Mitchell and Carson 1989). Respondents who either refused to pay, or were unsure about whether they would pay in the DC and OE methods, were asked to state reasons for their response: Why did you say . . . (you wouldnt pay) or (dont know) or ($0)? Unlike previous CV studies (e.g., Lindsey 1992) where respondents were allowed to choose only one reason from a small set of alternatives, the current survey elicited open-ended responses. As a consequence, people were free to mention more than one salient concern. Following standard design procedures for WTP questions (Fischoff and Furby 1988; Mitchell and Carson 1989), the payment vehicle of higher local and state charges was decided upon in discussions with the various water agencies. It is common practice among CV practitioners to use relatively neutral payment vehicles in order to avoid the undue inuence arising from unpopular methods of revenue collection and to facilitate generalisability of the results (Mitchell and Carson 1989). Moreover, annual payments were specied rather than a one-off contribution because the latter option tends to resemble a donation framework rather than a market. Finally, the target of the WTP questions was to reduce the effects of urban stormwater runoff on the water quality of the wetlands, waterways and oceans. It has been argued that, ideally, a more delineated level of change in the target might serve to facilitate accuracy (Mitchell and Carson 1989). Lindsey (1992), for example, sought to value both 1- and 4-percent reductions in nitrogen and phosphorous to Chesapeake Bay through the introduction of retention ponds. This was not possible in the current context as the water agencies could not agree upon

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Table II. Frequency of responses.

Protest reasonsa % of total Combined (n = 610) 50.50 34.60 26.70 13.30 12.00 10.70 4.60 3.80 3.00 2.00 1.80 0.03 2 DC (n = 332) 57.50 38.60 29.50 13.90 4.50 15.40 5.40 3.90 3.30 3.00 1.20 0.30 OE (n = 278) 42.10 27.70 23.40 12.20 19.10 5.00 3.60 3.60 2.50 0.70 2.50 0.40 14.43 7.99 2.91 0.35 32.32 16.94 1.15 0.04 0.33 4.12 1.47 0.02

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

I pay enough already (PAYENUF) I cant afford to pay at the moment (CANTPAY) Should use existing money (EXIST) Those who pollute should pay (POLLUTER) There is not enough information (NOINFO) Unfair to ask me to pay anything (UNFAIR) Its my right to expect clean water (MYRIGHT) Dont want to place a value on water (NOPLACE) Those who use the water should pay (USERPAY) Its not my problem (PROBLEM) Not a good way to deal with problem (NOGOOD) Thats all its worth to me (ALLWORTH)

p < 0.05; p < 0.001 a Variable label in parentheses

a single management approach given that specic stormwater issues tended to be localised (Aitken 1995).

5. Results Of the total sample, 610 people either (a) stated a dont know response (n = 107 in the OE group, n = 57 in the DC group), (b) offered a zero dollar amount to the openended question (n = 171), or (c) refused to pay the price given in the dichotomous choice question (n = 275). These respondents constituted 52.5% and 50.4% in the OE and DC elicitation method subsamples, respectively. Of the respondents not willing to pay, 52.9% (n = 147) in the OE condition and 39.6% (n = 131) in the DC condition stated only one reason. In both conditions, the greater proportion of these single responses were for the reasons I pay enough already and I cant afford to pay at this moment. These two responses constituted 54.4% of single responses in the OE condition and 61.8% in the DC condition. The reasons associated with zero responses and refusals are given in Table II in order of frequency. The most often cited responses were I pay enough already (n = 308) and I cant afford to pay at the moment (n = 211) while the most infrequent response was Thats all its worth to me (n = 2). Because of the low frequency associated with this latter variable, it was not included in any of the subsequent analyses. (Consistent with the analysis reported in Lindsey (1994), a literal interpretation of this variable suggests that only a trivial proportion of zero bids were statements of economic value.)

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Table II also shows the results of a series of chi-square tests of independence for each protest response by the WTP format. The DC format was associated with a greater proportion of responses protesting the notion of paying an additional sum for stormwater pollution abatement (PAYENUF, CANTPAY, UNFAIR) as well as a rejection of any responsibility for the stormwater problem (PROBLEM). The OE method, on the other hand, was associated with information constraints (NOINFO). A two factor model was tted to the protest responses. The rst factor was represented by responses concerning individuals attitude toward paying an additional amount for stormwater pollution abatement (CANTPAY, UNFAIR, PAYENUF, PROBLEM, NOINFO). Some respondents may believe that they have not been given enough information to adequately assign a dollar value to the public good. Alternatively, other individuals may consider the task achievable, but hold reservations regarding their ability to pay more for the change in the public good. These respondents may well believe that it is unfair to have to pay more for stormwater pollution or that they pay enough already for stormwater pollution abatement. Thus, the rst bipolar ranged from perceptions that the valuation task was not possible to notions regarding the fairness of having to pay more. Importantly, respondents for whom the fairness aspect of this attitude dimension is salient need not reject the idea of paying for stormwater pollution abatement, but rather the implicit contention that they are responsible for paying an additional amount to achieve the higher level of service. The second dimension was thought to reect evaluations of the application of contingent valuation to the problem of stormwater pollution (MYRIGHT, USERPAY, POLLUTER, EXIST, NOPLACE, NOGOOD). Respondents may have no problem with assigning dollar values to stormwater pollution abatement, but consider the idea as inappropriate either for dealing with pollution issues, or as far as their household is concerned. This evaluation could be attributed to a rejection of the payment attribution (i.e., someone else is responsible for paying) or a general belief that household payments are inappropriate in dealing with pollution. In contrast to the rst factor, this second attitude dimension characterises a rejection of the implicit contention that housholds are responsible for paying for stormwater pollution abatement. This reasoning was also thought to be relevant to protest responses concerned with ability to pay. For this reason, CANTPAY was included in both sets of variables summarising each of the factors. In summary, protest responses were thought to be related to two fairness dimensions. The two factors are clearly distinct in their different orientations. The rst factor is related to beliefs that reject paying more for stormwater pollution abatement. This bipolar ranges from a rejection based on a lack of information to beliefs that the respondent pays enough already and/or that additional amounts would be unfair. The second attitude dimension was more rights-based in its focus on who should pay or whether anyone should pay at all. This bipolar factor is not consistent with the idea that the respondents household is responsible for paying for

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stormwater pollution abatement. Finally, both factors were regarded as plausible underpinnings to sentiments regarding ones inability to pay. A similar distinction between attitudes toward decision processes has been empirically demonstrated in research on attitudes toward participation in the democratic process (Aish and Joreskog 1990). Aish and Joreskog reported that certain beliefs about participation in voting could be summarised by two attitude dimensions. The rst dimension political efcacy referred to the extent to which individuals believe that they can participate in the democratic process. Respondents who hold such an attitude do not reject the idea of voting, but perceive it as being beyond their abilities. The second dimension, termed responsiveness in the literature, refers to the extent to which individuals believe that their participation will be effective. This dimension says nothing about individual ability, but rather highlights the degree to which the act is worthwhile. From this starting point, the procedure of Joreskog (1993) was followed to attain a solution that could not be rejected at the 5% level of signicance. The latent protest dimensions were then regressed on the type of WTP elicitation format, income, and a dichotomous variable representing the distance (near or far) of respondents residence from a major water body. The protest responses were coded 2 if the respondent nominated the item as a reason for refusing to pay, and 1 if the item was not mentioned. Distance from a major water body (DISTANCE) was coded 1 if the respondent lived near to a river, a lake or the ocean, and 2 if he or she did not. Similarly, the OE and DC methods were coded 1 and 2, respectively, to form a dichotomous variable (CVMETHOD). Finally, gross household income (INCOME) was measured on a 10-point scale ranging from a low category of $0 to $5,000 and a high category of $80,000 and above. The parameter estimates resulting from the following analyses were derived from a matrix of polychoric correlations (specically, biserial and tetrachoric correlations) based on a sample size of 593 cases following the listwise deletion of missing data. Joreskog and Sorbom (1993) asserted that when variables are either non-normal, ordinal or discrete, a matrix of polychoric correlations should be analysed with the weighted least squares tting function using the correct weight matrix. In the current analysis, all the variable distributions were discrete (with the exception of Income) and some of these were non-normal. Ordinal and discrete variables are assumed to have a standard normal distribution, in which case thresholds can be estimated from the inverse of the normal distribution function. As such variables do not have a metric scale, and estimates of their linear relationships are based on the corresponding underlying variables. Thus, the polychoric correlations are theoretical correlations of the underlying variables, estimated from the pairwise contingency tables of the observed variables, and not correlations computed from actual scores. The correct weight matrix in this case is the inverse of the estimated asymptotic covariance matrix of the tetrachoric and biserial correlations.

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Table III. Conrmatory factor analysis solution and t indices. Indicatorsa Protest factor 1 Loading t-value 0.82 0.76 0.56 0.45 0.67 8.92 9.60 10.96 6.06 9.48 Protest factor 2 Loading t-value Uniqueness Estimate t-value 0.33 0.42 0.69 0.80 0.57 0.83 0.71 0.28 0.38 0.33 0.31 2.59 3.92 8.79 9.11 5.38 11.41 6.79 2.64 3.51 3.27 2.94

UNFAIR NOINFO PAYENUF PROBLEM CANTPAY EXIST NOPLACE MYRIGHT POLLUTER USERPAY NOGOOD

0.15 0.42 0.54 0.85 0.79 0.82 0.83

2.84 7.81 6.90 17.52 12.70 17.06 14.25

2 (53) = 66.08 (p < 0.11) GFI = 1.00 RMSEA = 0.02 AIC = 170.08 RMSR = 0.11 a Refer to Table II for the listing of these reasons.

Table III, in conjunction with Figure 1, shows two bipolar protest factors and their relationships with the observed variables. The rst factor concerned a reaction to the perceived fairness and feasibility of the valuation task as it relates to the individual. It had high loadings on the variables UNFAIR and CANTPAY marking the positive end of the bipolar, and a high loading for NOINFO marking the negative end. In this sense, high scores on the factor were associated with the feelings Its unfair to ask me to pay anything and I cant afford to pay at the moment whereas low factor scores were associated with the salience of information constraints. This factor rejects the idea of paying more for stormwater pollution either because of its lack of fairness or because not enough information was provided upon which to form a decision. The second factor was concerned with ethical considerations regarding the achievement of pollution reductions by way of individual household payments. In this sense, the low end of the factor was concerned with the rights of those who did not consider themselves responsible for the degraded water quality, whereas high scores on the factor tended to be associated with a lack of condence in the valuation approach in general. For example, there was a high loading on NOGOOD at the positive end of the dimension, and high loadings on MYRIGHT, POLLUTER and USERPAY at the negative end. Thus, high factor scores were associated with protests against the valuation method, whereas low scores were associated with appeals to personal rights and external attributions of the payment responsibility.

PROTEST RESPONSES IN CV
0.82 -0.76 0.56 0.45

145
UNFAIR NOINFO PAYENUF PROBLEM CANTPAY EXIST NOPLACE MYRIGHT POLLUTER USERPAY NOGOOD

CV METHOD
0.53 0.18

Protest 1

DISTANCE

-0.24 -0.11 -0.06

0.67 0.15 -0.42 -0.54

Protest 2
-0.85 -0.79 -0.82 0.83

INCOME

0.36

Figure 1. Conrmatory factor analysis path diagram.

Notably, there was no support for Lindseys (1994) assertion that reasons There is not enough information and Didnt want to place a value on water (items 2 and 6 in his analysis) are representative of the same underlying dimension. The t statistics for the model were acceptable according to established criteria (Browne and Cudeck 1993; Joreskog and Sorbom 1993; Tanaka 1993). All the parameters linking the observed protest responses with the latent variables were signicant at the 0.05 level. The overall chi-square was non-signicant and the Goodness-of-Fit Index (GFI) was equal to 1. The Akaike Information Criterion (AIC) equalled 170.08 which was below the comparable statistic for the saturated model (210.00). Moreover, the low Root Mean Square Error of Approximation (RMSEA) of 0.02, suggested that the degree of approximation in the population was satisfactory. Finally, the discrepancy between elements in the observed and predicted covariance matrices were only small on average with the Root Mean Square Residual (RMSR) equalling 0.11. The results also showed that the attitude dimensions had different relationships to the independent variables in the model. The linear combination of type of elicitation method, distance, and household income explained 41% of the variance for the rst factor and 15% for the second. The type of method was strongly associated with scores on the rst protest dimension, but only weakly associated with scores on the second dimension (see Table IV and Figure 1). Specically, the DC method tended to be associated with negative reactions regarding the fairness of the respondent having to pay an additional amount for stormwater pollution abatement due, in part, to income restrictions. Moreover, the DC method was more likely to make salient ones attitude toward paying for stormwater improvements given the impact of polluters and users on the rights of individuals to clean water. In contrast, the OE method tended to raise concerns over the lack of information available to

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Table IV. Regression coefcients for the independent variables. Independent variable CVMETHODa DISTANCEb INCOME Protest factor 1 Estimate t-value 0.53 0.18 0.24 6.80 3.30 4.29 Protest factor 2 Estimate t-value 0.11 0.06 0.36 2.08 1.06 6.06

a Open-ended = 1, Dichotomous Choice = 2. b Near to water = 1, Far from water = 2.

answer the WTP question, and the applicability of the method to environmental problems. Geographical location in terms of proximity to major water bodies also had different relationships with the protest dimensions. Those living further away from water tended to see income constraints and the unfairness of having to pay more money as being salient, whereas those living near to water were more inclined to appeal to information constraints. However, distance from water had little relationship with the second factor describing respondents ethical concerns about paying for stormwater pollution abatement. Finally, higher annual household incomes were signicantly related to information constraints and a lack of faith in the method for the rst and second factors, respectively. Respondents from households with lower annual incomes tended to hold a negative attitude toward paying more than they currently were, and to believe that others were responsible for paying for stormwater pollution abatement. 6. Discussion Although it is not possible to directly test Lindseys (1995) assertion that the distribution of protest reasons is likely to be similar across referendum and market models, the results do not support the notion that this distribution is unrelated to the particular measurement technique employed to elicit WTP values within a market model. Respondents in the DC group were more likely to state protests in regard to paying whereas those in the OE group were more inclined to focus on apparent information constraints. Moreover, the difference in the distribution of protest responses was not trivial. Rather, responses differed by elicitation method on four of the six most frequently cited reasons. On this basis, it is reasonable to treat with suspicion the untested assumption of equivalent distributions between different CV conceptual models. The evidence also contradicts Lindseys (1995) interpretation of the manifest protest reasons made independently of their latent linkages to a common underlying structure. This latent structure did not substantiate the notion that reasons for stating zero amounts can be treated independent of one another. Protest reasons that did not appear on the surface to be related to ethical objections were neverthe-

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less linked to the same latent structures as protest reasons that were manifestly ethical. In this regard, researchers who formulate criteria for censoring protest responses should be wary of omitting one type of response and not another when both are representative of the same psychological construct. Even with this admonition, it is perhaps unreasonable to expect the latent structure of protest responses to remain equivalent across valuations of different public goods undertaken in different substantive domains. The rst factor had positive validity with reasons regarding the unfairness of paying an additional annual sum for pollution abatement and negative validity with a perceived lack of information. Variation on this factor was explained by all three independent variables. Respondents (a) asked the DC WTP question, (b) having lower income, and (c) residing further away from a water body, were more inclined to protest their ability to pay. Respondents who were asked the OE WTP question, had relatively higher household incomes, and lived closer to water bodies, were more inclined to consider the information constraints of the valuation exercise as a basis for not paying more for cleaner stormwater. The second factor was related to the right to have unpolluted water ways and a lack of condence in the CV process. Respondents having high scores on this factor tended to have little condence in the notion that household payments were an appropriate way to deal with the stormwater pollution problem. Low scores, on the other hand, represented reactions that protect ones own rights to clean waterways and admonish others for their contribution to the pollution problem. This factor was signicantly predicted from household income and the type of elicitation method. Respondents who answered the OE question and who reported higher incomes were inclined to lack condence in the valuation exercise as a means to address stormwater pollution of the waterways. In contrast, those individuals in the DC and lower income groups were more inclined to raise issues concerning their rights given the problems created by others. The relationships of the factors to household income support the view that WTP, as a measure of value, is weighted in favour of those respondents who have more money (Sagoff 1988). Low income householders were concerned with the fairness aspects of CV. Respondents from higher income households, in contrast, were more inclined to (a) want to know more about what they were being asked to pay additional money for, and (b) questioned whether WTP was an appropriate way of dealing with water quality issues. More specically, the results indicate that zero dollar amounts given for reasons to do with affordability were indicative of feelings of unfairness about paying additional sums for stormwater pollution abatement. Clearly, if responses pertaining to affordability are accepted in CV surveys, then so must statements regarding the perceived unfairness of having to pay an additional amount. Similarly, the belief that the government should use existing public resources to fund stormwater improvement was representative of the same source of variability as was a reluctance to place a value on the policy outcome. Thus, responses that Lindsey (1995)

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would censor in one or both of the models are, in this sample, measures of the same latent variable that underpin responses that he would allow. The analysis of protest responses is likely to vary as a function of the way they are measured. Lindsey (1992) presented a small list of options and asked respondents to choose the one most important reason for answering the way they did. In contrast, the present study employed an open-ended format allowing respondents to nominate any number of their salient reasons for stating a zero response. To the extent that respondents have more than one reason to justify their responses, censoring protest responses on the basis of a taxonomy of independent categories seems difcult to sustain given the current results. These conclusions require further investigation using variations on the procedures employed here. Future research might aim to measure protest responses on Likert scales or semantic differentials so as to better represent intensity of feeling. Moreover, responses to protest response items should be garnered from all respondents rather than only those stating zero bids. It is plausible that respondents who state positive bids may also hold beliefs that might be considered so-called protests of some kind. Furthermore, the present analysis assumed invariance of the factor structure across CV elicitation methods. It was not possible to test for measurement invariance between elicitation method groups because of sample size limitations. Nevertheless, this omission does not detract from the conclusion that general rules for censoring protest responses in contingent valuation surveys are unwarranted. In conclusion, protest responses are not simply a methodological issue. They are not, for example, wholly attributable to an inappropriate payment vehicle. Rather, protest beliefs may arise from the act of paying itself. It is difcult to conceive of a strategy that would effectively persuade respondents to put aside their impressions of the role of government in public good provision, issues about equity between social groups (i.e., who should pay), considerations regarding their own efcacy to affect public good decision-making outcomes, or their evaluations of funding public good changes through additional household contributions. Acknowledgments The authors acknowledge funding support from the Urban Water Research Association of Australia (UWRAA) and the Commonwealth Scientic and Industrial Research Organisation (CSIRO) Multidivisional Program, Urban Water Systems Research Program. References
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