Analyzing Dichotomous Choice Contingent Valuation Data With Zero Observations: A Mixture Model

Seung-Hoo Yoo, Hee-Jong Yang and Eui Soon Shin
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Seung-Hoo Yoo: Hoseo University
Hee-Jong Yang: Korea Institute of S&T Evaluation and Planning
Eui Soon Shin: Yonsei University

Korean Economic Review, 2001, vol. 17, 311-327

Abstract: Modeling public behavior to the policy with the data from dichotomous choice contingent valuation (DCCV) surveys is often complicated by zero willingness to pay (WTP) responses in the sample. To deal with the zero responses to obtain appropriate welfare measure such as mean and median WTP, we consider a mixture model of WTP distributions to allow a point mass at zero. We also consider the conventional model and a spike model for comparison. Our application reported here portrays the usefulness of the mixture model to analyze DCCV data with zero observations.

Keywords: Dichotomous choice contingent valuation; willingness to pay; mixture model; spike model; zero response (search for similar items in EconPapers)
JEL-codes: C25 Q25 (search for similar items in EconPapers)
Date: 2001
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