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Joint estimation of discount rates and willingness to pay for public goods

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  • Bond, Craig A.
  • Cullen, Kelly Giraud
  • Larson, Douglas M.

Abstract

We analyze willingness to pay (WTP) for environmental programs whose time periods of benefit and repayment differ, using a net present value framework that identifies parameters of both WTP and personal discount rates. Respondents to a contingent valuation survey focusing on protection of critical habitat buffer zones for the endangered Steller Sea Lion in Alaska were asked their willingness to pay for 1-, 5-, and 15-year repayment periods. We jointly estimate the personal discount rates and WTP via maximum likelihood, and compare with a model assuming a fixed, market discount rate.

Suggested Citation

  • Bond, Craig A. & Cullen, Kelly Giraud & Larson, Douglas M., 2009. "Joint estimation of discount rates and willingness to pay for public goods," Ecological Economics, Elsevier, vol. 68(11), pages 2751-2759, September.
    • Handle: RePEc:eee:ecolec:v:68:y:2009:i:11:p:2751-2759
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