Multivariate mixed models for open-ended contingent valuation data - Willingness to pay for conservation of monk seals

Although dichotomous choice (DC) contingent valuation (CV) has been recomme nded by the US NOAA 'blue-ribbon' panel for large-scale contingent valuatio n studies, useful information can still be obtained from smaller, open-ende d (OE) studies, often undertaken as a precursor to a DC survey. The CV stud y considered here was carried out in Greece and looked at willingness-to-pa y (WTP) for protecting the Mediterranean monk seal (Monachus-monachus) in t he Aegean area. This is the most endangered seal in the world, and the appl ication of the CV methodology was the first such application in Greece. The OE data consist of two responses: first, a binary response detailing wheth er or not respondents were in principle prepared to pay for the protection of this seal; secondly, those respondents who answered 'yes' to the first q uestion were then asked to state their maximum WTP for such protection. A m ultivariate binomial - log-normal mixture model is used to develop a bid fu nction including explanatory variables such as income, sex, age and educati on. Such a modelling approach provides an alternative to more commonplace t obit estimation. However, the model is extended to include further informat ion which was collected on: (a) an increased WTP amount given in response to information that the initi al WTP amount may not be enough to prevent the extinction of the seal; (b) respondents were asked to divide their final WTP amount between use, op tion and existence values, the latter requiring a multivariate model with f our binary and four continuous responses per individual in the same model. The discussion focuses on the methodological issues raised with some commen t on the substantive interpretation of results.