COMPARING 3 APPROACHES THAT GENERATE BIDS FOR THE REFERENDUM CONTINGENT VALUATION METHOD

Two Monte Carlo willingness-to-pay (UTP) models were constructed to co mpare three approaches that generate bids for the referendum CVM. In t he first model, WTP was normally distributed, and in the second, was l ognormally distributed. The bid approaches were those of K. L. Boyle, M. P. Welsh, and R. C. Bishop, (Land Econom. 64, 94-98, 1988), J. C. C ooper (J. Environ. Econom. Management 24, 25-40, 1993), and an ad hoc third approach. Some properties of these approaches were discussed. WT P estimates from the three approaches were compared to the true value. Results indicated that Boyle et al.'s approach was preferred, especia lly when variation in WTP was low. Estimates from the three approaches became more comparable as WTP variability and sample size increased. (C) 1995 Academic Press, Inc.