We compare two approaches for estimating the distribution of consumers’ willingness to pay (WTP) in discrete choice models. The usual procedure is to estimate the distribution of the utility coefficients and then derive the distribution of WTP, which is the ratio of coefficients. The alternative is to estimate the distribution of WTP directly. We apply both approaches to data on site choice in ...

Copyright 2010 Northeastern Agricultural and Resource Economics Association It is especially important that researchers be cautious about presenting willingness to pay (WTP) point estimates to policy makers when the estimates are sensitive to subjective decisions that the researchers make during the estimation process. It is well known that WTP point estimates are sensitive to the choice regard...

Contingent valuation (CV) and conjoint analysis were used to estimate landowner’s willingness to pay (WTP) for ecosystem management on non-industrial private forest land. The results suggest that even when conjoint and CV questions are the same, except for rating and pricing format, respectively, WTP estimates are quite different. Since most conjoint models essentially count ‘maybe’ responses t...

This paper presents the COG-FPOM, a model based on the Fuzzy Pay-Off Method (FPOM). The FPOM is a scenario-based real option valuation method that uses fuzzy numbers as possibility distributions. The paper shows an unexpected result generated by the original FPOM, in which the real option would have a negative value. It further analyses its reasons and suggests a way to overcome it, by using th...

Traditional capital budgeting models cannot appropriately capture the value of IT-systems. Real Option Pricing Theory provides a useful economic perspective on the valuation of IT-systems, although no comprehensive review of the state of the art of real option pricing models for IT-investments has been published to date. This paper provides an overview of the applicability of real option theory...