Estimating Willingness to Pay from Survey Data: An Alternative Pre-Test-Market Evaluation Procedure

Closed-ended contingent valuation surveys are used to assess demands in hypothetical markets and recently have been applied widely to the valuation of (non-market) environmental resources. This interviewing strategy holds considerable promise for more general market research applications. The authors describe a new maximum likelihood estimation technique for use with these special data. Unlike previously used methods, the estimated models are as easy to interpret as ordinary least squares regression results and the results can be approximated accurately by packaged probit estimation routines.