1 The Discrepancy between Utility Difference and Expenditure Difference Interpretation for the Double-bounded Discrete Choice Contingent Valuation Responses

This study provides a systematic analysis to determine the theoretical plausibility and empirical feasibility, applicability, and convenience for double-bounded dichotomous choice contingent valuation responses under Hanemann’s utility difference and Cameron’s expenditure difference interpretation with various specifications. The results indicate that the estimation and computation of mean willingness to pay and confidence intervals under expenditure difference specification are feasible for all specifications but there are only limited numbers of cases that are feasible and applicable under utility difference specification. Overall, the mean willingness to pay and the confidence interval derived from expenditure difference interpretation are more complete than its counterpart derived from utility difference interpretation under any specifications identified in this study. The confidence intervals from all accountable specifications that can be used to represent average household’s annual willingness to pay welfare measurement for preserving the resources at the current status is in the range of 900-911 NT dollars