Flexible Functional Form Estimation of Willingness to Pay Using Dichotomous Choice Data

摘要

This paper introduces fully flexible (semi-nonparametric) methods for calculating willing- ness to pay (WTP) bounded between zero and the respondent's income for dichotomous choice contingent valuation. A method to estimate median WTP using fully flexible func- tional forms is also presented. Finally, the numerical illustration demonstrates the importance of considering Jensen's Inequality in calculating WTP with nonlinear models.