Closed-ended Contingent Valuation Research Articles

Survey on Willingness to Pay for Life-Saving Treatment, Functional Recovery, and Cosmesis in a Neuroscience Outpatient Clinic Setting in Singapore

BackgroundNeurologic disorders impose a heavy burden on healthcare in Singapore. To date, no data on the willingness to pay (WTP) for neurologic treatments has been reported in the local population. ObjectivesWe aimed to quantify the value of various health domains to neuroscience patients and their caregivers by comparing their WTP for different types of treatments. MethodsA questionnaire using a mixed open-ended and closed-ended contingent valuation method was developed to elicit WTP and self-administered by 112 visitors to a neuroscience outpatient clinic. The WTP for treatments in 3 health domains (advanced restoration of function, life extension, and cosmesis) was evaluated and compared. Subgroup regression analysis was performed to investigate the impact of demographic and socioeconomic factors. ResultsTreatment that improved cosmesis had the highest median WTP of Singapore dollar (SGD) 35 000, followed by treatment that provided 1 year of life extension (SGD 20 000) and 1 year of advanced restored function (SGD 10 000; P < .001). Respondents with a university education were willing to pay as much as 2 to 3 times of those without across all health domains. ConclusionThis is the first study to provide data on how different health domains are valued by neuroscience patients and caregivers in our population. Respondents valued treatment that restored or improved their physical appearances the most. These findings could contribute to future policies on the improvement of neuroscience care.

A dichotomous choice survey for quantifying option and non-use values of bus services in Korea

The total economic value for a transportation service consists of use, option, and non-use value. The use benefit is based on a traveler’s willingness to pay for usual consumption of the service. The optional value, on the other hand, is related to the possible use of the service for trips not yet anticipated or currently accommodated by other travel modes. The non-use value, however, is derived from the intrinsic merit of the service, even though a trip-maker never actually or potentially depends on the mode. A closed-ended contingent valuation method is considered for the quantification of the option and non-use values. A survey of single- and double-bounded dichotomous choices is conducted with a case study of South Korean bus operations. A logistic regression model and a survival analysis for the single- and double-bounded approaches, respectively, are applied. The estimation result is examined according to the statistical property required and the behavioral validity expected. In particular, three issues from the output are discussed. First, the results help to show the preferable framework between single- and double-bounded surveys for addressing an individual’s option and non-use values. Second, the differences in the absolute values of option and non-use values are compared. Thirdly, the relationship between trip-makers’ willingness to pay and the level of service of their primary travel modes are investigated. In conclusion, the summary of research and the possibilities for future studies are given.

Difficulties in valuing street light improvement: trust, surprise and bound effects

Previous empirical research has demonstrated an internal inconsistency that may occur in response strategies between the first and second valuations made to closed-ended contingent valuation questions. One possible explanation for this bound effect is the surprise of being asked the second valuation question, which may be enhanced where there is a lack of trust. This paper considers the use of closed-ended contingent valuation to estimate non-market benefits for an improved street lighting scheme where there is a lack of trust in the agency responsible for provision. The results provide confirmation that surprise is an important determinant of bound effects; however, efforts to reduce such bias using a prior statement of the bid range were found to be ineffective in increasing trust and reducing surprise. Given the importance of this area of research, directions for future research are considered.

On the gap between payment card and closed-ended CVM-answers

The paper presents contingent valuation (CV) estimates of benefits provided by a proposed ‘Kalkalpen’ National Park in Austria. Although descriptive results of welfare measures are presented, the focus of the paper is on methodological questions concerning the analysis of CV answers. Evidence is given regarding the difference between payment card (PC) answers and closed-ended question formats. Based on different estimation models for CV questions substantial differences are found between closed-ended and payment card welfare measures. On average PC-willingness to pay (WTP) measures are below the closed-ended figures. Since the evaluation models are based on different premises in the calculation of WTP figures a more precise disclosure of the underlying evaluation methods is required if different question formats are compared to one another. Identical assumptions on the probability distributions have to be assumed whenever open- and closed-ended CV welfare measures are compared. Taking theoretical arguments into account the application of the closedended double-bounded Spike model that provides an average welfare measure is recommended.

Matching Grants and Public Goods: a Closed-Ended Contingent Valuation Experiment

Matching grants are commonly used to influence the bundle of public goods provided by governments. A contingent valuation experiment was designed to determine the value that individuals place on improved recreational facilities under a matching grant proposal. The experiment provided an opportunity to examine preferences given the public good exists in an active and well-defined market, and the valuation experiment was perceived as meaningful to public policy. The researchers estimated a mean willingness-to-pay for park improvements of $8.30, far less than the implied tax increase of $21 provided by local politicians opposed to the project but nearly double the actual tax increase for the average property owner.

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.

Efficient Estimation Methods for "Closed-Ended" Contingent Valuation Surveys

Closed-ended contingent valuation surveys can be very useful in the evaluation of nonmarket resources. Respondents merely state whether they would accept or reject a hypothetical threshold amount, either as payment for giving up access to the resource or as a fee for its use. The authors develop a maximum likelihood procedure which exploits the variation in the threshold values to allow direct and separate point estimates of regression-like slope coefficients and error standard deviations (without truncation bias). Their illustration uses data from a survey of recreational fisherman to examine factors which influence individuals' willingness-to-pay. Copyright 1987 by MIT Press.