This paper challenges the W. M. Hanemann [Amer. J. Agr. Econom.66, 332–341 (1984)] and C. Sellar, J. P. Chavas, and J. R. Stoll [J. Environ. Econom. Management13, 382–390 (1986)] utilizations of logit models to estimate the value of non-market resources from “referendum” survey data. These data are more informative than conventional choice data. The “random utility” interpretation of logit models is therefore too restrictive. Bypassing the utility function entirely, it will be shown that parameters and standard errors for utility-theoretic inverse Hicksian demand functions can be extracted directly and much more simply. Estimated demand functions need not be limited to those corresponding to the linear-in-parameters utility difference specifications which can be handled by packaged logit programs.
Closed-ended contingent valuation surveys can be very useful in the evaluation of non-market resources. Respondents merely state whether they would accept or reject a hypothetical threshold amount, either as payment for giving up access to the resource, or as a fee for its use. We develop a maximum likelihood procedure which exploits the variation in the threshold values to allow direct and separate point estimates of regression-like slope coefficients and error standard deviations (without truncation bias). Our illustration uses data from a survey of recreational fishermen to examine factors which influence individuals' willingness-to-pay.