Willingness to Pay: Referendum Contingent Valuation and Uncertain Project Benefits

Jun 1999
This study uses contingent valuation (CV) methods to estimate the benefit of an environmental water quality project of the Tietê River and its tributaries that flow through the São Paulo, Brazil, Metropolitan Area (SPMA). This paper demonstrates the range alternative central tendency measures for WTP produced under alternative parametric and nonparametric approaches using data gathered from a recent referendum CV survey that was conducted in Brazil to analyze a large, multi-phase water quality improvement project. It explains why one of the most commonly used measures, the unrestricted mean of the conditional inverse distribution function of WTP, may be less desirable and more computationally intensive than simpler alternatives like the nonparametric mean of the marginal inverse distribution function.