Measuring Willingness-to-pay for Transportation Improvements

Consumers' Willingness-to-Pay (WTP) for transportation improvements can be estimated by analyzing travel choices in real or hypothetical markets. This paper examines the measurement and analysis problems that arise in forming WTP estimates and using them to guide public policy. Bounds are given for WTP deduced from random utility models. Issues in the use of stated preference data and the design of stated preference experiments are discussed. ACKNOWLEDGEMENTS: This research was supported by the E. Morris Cox Endowment at the University of California, and by National Science Foundation Grant SBR 9601149. Correspondence should be directed to the author at Department of Economics, University of California, Berkeley CA 94720-3880; e-mail [email protected].