PT  - JOURNAL ARTICLE
AU  - Czajkowski, Jeffrey R.
TI  - Modeling Shifts in Willingness to Pay from a Bayesian Updating Perspective
AID  - 10.3368/le.85.2.308
DP  - 2009 May 01
TA  - Land Economics
PG  - 308--328
VI  - 85
IP  - 2
4099  - http://le.uwpress.org/content/85/2/308.short
4100  - http://le.uwpress.org/content/85/2/308.full
SO  - Land Econ2009 May 01; 85
AB  - This paper derives a structural shift empirical specification for a double-bound dichotomous choice contingent valuation methodology premised upon willingness-to-pay (WTP) shifts ensuing from a representative model of respondent Bayesian updating behavior. We demonstrate by way of data simulations that a traditional structural shift specification may often fail at estimating true WTP in this context. Further simulations demonstrate that a simple extension of the traditional structural shift model derived explicitly from our Bayesian framework can correct for much of the WTP bias, with an empirical application confirming the simulation outcomes. Finally, we investigate the relationship between strategic behavior and WTP shifts. (JEL Q26, Q50, Q51)