Willingness to pay for environmental improvements in a large city - Evidence from the Spike model and from a non-parametric approach

In this paper, the Contingent Valuation Method (CVM) is applied in order to estimate the social benefits of a set of environmental and urban improvements planned for the waterfront of the City of Valencia (Spain) as a consequence of the expansion and restructuring of its trading port. As the data show a high rate of zero responses, we applied the Spike model, one of the most recent models in CVM literature, since traditional models (Logit and Probit) are not suitable, given the characteristics of our data. The non-parametric approach is also applied in order to test the validity of the Spike model. The results show certain similarities between the Spike model and the non-parametric approach.