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Our thesis aims to evaluate people's willingness to pay for improving the air quality in order to increase the longevity of individuals. In this sector of the literature review, we will discuss policies in the nursing profession, case studies and various approaches to work based acute skills learning programmes. For our purposes we executed a literature search using Econlit database and terms such as ‘air quality’ ‘contingent valuation’ ‘longevity’ and ‘willingness to pay‘. Our review highlights on several different approaches finding people's willingness to pay for variance non-value or valuable commodities.
It is widely acknowledged that this measurement can play an important role not only in the decision of public investments but also in the policy decision which would have impact on environment (Richard, 1998). In the recent years, CVM became to a target of criticism within the economics community (Diamond and Hausman, 1994).
As we already indicated that Contingent valuation relies on an interview in order to find individuals' WTP/WTA for a specified improvement (degradation) in environmental quality normally.
So it yields more significant for us to choose a proper method of questioning since there are various methods to conduct this survey. According to Carson's study In-person interviews provide the highest-quality WTP data, which also need highest labour input. In the well-known Alaska research (Carson, 1994), it showed that the estimation of cost completing a face-to-face interview was $300 to $400, which is much more expensive than conducting a telephone survey. Despite its more monetary saving for telephone surveys, the shortcoming is quite observable. Interviews questioned on a telephone line may lead to unclear explanation of the questionnaire because it doesn't allow you to use some other ways to describe your questionnaire, such as using photographs and visual aids and sometime individuals lose patience when you try to give a lengthy description of the question.
Mail surveys are even less expensive than telephone surveys, but completion of the questionnaire by the individual is likely to be correlated with his/her WTP for the commodity being valued, implying a self-selected type of sample. However, in Cameron, Shaw and Ragland's (1996) research, it showed us that this sample-selection bias can be corrected by applying Census information at the zip code level for individuals who the questionnaires were mailed to. Mail surveys also have problems with asking the followed questions that depend on the previous question, which in this survey is the open-ended question about individuals' WTP.
- Structure of questionnaire
- WTP estimation techniques
- Data analysis
- Some other factors which is also important in CVM