CHAPTER II 



MEASUREMENT OF NET WILLINGNESS TO PAY: 

 THEORY AND METHODS 



The two most widely used methods for estimating net willingness 

 to pay for outdoor recreation are contingent valuation (CVM) and 

 the travel cost model (TCM) . These are also the two general 

 methods recommended by the U.S. Water Resources Council (1983) 

 for valuing recreation in federal cost benefit analysis. 



While the Montana Deer Hunting Survey gathered the information 

 necessary to make both CVM and TCM estimates of net willingness 

 to pay only the CVM analysis was undertaken in this study. 

 Brooks (1988) used travel cost methodology to estimate net 

 willingness to pay for Montana deer hunting and the CVM 

 application of this study complements Brooks' work. 



The Contingent Valuation Method 



In the CVM approach individuals are directly surveyed on their 

 willingness to pay for the services of a given resource 

 contingent on the existence of a hypothetical market situation. 

 This flexible technique has been applied to a wide range of 

 environmental and resource issues including air and water quality 

 changes, scenic beauty, and wildlife (Cummings, Brookshire and 

 Schultze, 1986) . The only limitation of the method is the 

 ability of the researcher to frame understandable questions and 

 the ability and willingness of the respondents to accurately 

 value the good or service. Bishop and Heberlein (1985) have 

 described six key methodological choices in a CVM application: 1) 

 target population, 2) product definition, 3) payment vehicle, 4) 

 question format, 5) method of analysis and 6) supplemental data. 

 The target population for this study is the direct users of deer 

 hunting resources (Montana deer hunting license holders) while 

 the product definition is a deer hunting trip. 



It is generally agreed upon that the payment vehicle must be 

 specified for the respondent. Mitchell and Carson (1981) suggest 

 two criteria for an appropriate vehicle: realism and neutrality. 

 For this study increases in deer hunting trip costs were used as 

 the payment vehicle. This vehicle presented respondents with a 

 realistic and emotionally neutral (as opposed to increases in 

 taxes) payment method. 



The question format used in the CVM in large part also determines 

 the method of analysis to be used. The question format can be one 

 of three basic types. First, the open-ended CVM is the simplest 

 approach: respondents are asked their maximum willingness to pay 

 for the use of a given resource. This approach can be 

 administered at a low cost and is relatively easy to interpret. 



