Nonparametric estimation of mean willingness to pay from discrete response valuation data

Abstract

This article develops a nonparametric method to consistently estimate mean willingness to pay (WTP) in various discrete response valuation methods. The advantage of this method is that it can consistently estimate unconditional mean WTP with astonishing ease under some assumptions of the bid distribution. In addition, we develop a method for estimating the best linear predictor for conditional mean WTP using a linear projection. This method is applicable to single-bounded and double-bounded contingent valuation, and some forms of choice experiment. © The Author (2010). Published by Oxford University Press on behalf of the Agricultural and Applied Economics Association. All rights reserved.