Efficiency gains afforded by improved bid design versus follow-up valuation questions in discrete-choice CV studies

Interval data analysis of CV discrete choice responses delivers efficiency gains which must be weighed against the risk of introducing strategic respo nse bias. Efficiency gains are also achievable by improved bid design. We a ssess these gains on median WTP estimates first in an empirical application , then by means of a Monte Carlo experiment comparing three different bid d esigns. Improved, but sub-optimal, bid design delivers comparable gains to those achieved by one and two follow-up questions. The first follow-up capt ures more than 50% of the efficiency gain provided by a second follow-up.