Analysis of contingent valuation data with multiple bids and response options allowing respondents to express uncertainty

The NOAA Panel on Contingent Valuation advocated a “no answer” response option to dichotomous-choice payment questions, but did not give guidance as to how this additional response should be interpreted conceptually or analytically. We investigate the econometric modeling and response effects associated with multiple-bounded, polychotomous-choice payment question. We find that using multiple bids with responses to each bid can increase the efficiency of welfare estimates, but this approach is not free from bid design effects. Moreover, in our application, explicitly modeling uncertain responses can increase welfare estimates by over 100%.