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Welfare Evaluations in Contingent Valuation Experiments with Discrete Responses
Author(s) -
Hanemann W. Michael
Publication year - 1984
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1240800
Subject(s) - contingent valuation , logit , economics , utility maximization , econometrics , valuation (finance) , welfare , maximization , mixed logit , logistic regression , discrete choice , economic surplus , willingness to pay , microeconomics , mathematical economics , mathematics , statistics , market economy , finance
Since the work of Bishop and Heberlein, a number of contingent valuation experiments have appeared involving discrete responses which are analyzed by logit or similar techniques. This paper addresses the issues of how the logit models should be formulated to be consistent with the hypothesis of utility maximization and how measures of compensating and equivalent surplus should be derived from the fitted models. Two distinct types of welfare measures are introduced and then estimated from Bishop and Heberlein's data.