To compare two methods of measuring willingness to pay (WTP): closed-ended questions with and without follow-up.
A measurement experiment based on dichotomous choice contingent valuation survey data is reported. Marginal WTP estimates for alleviation of rheumatoid arthritis symptoms resulting from treatment with a novel anti-rheumatic agent, cA2 (TNF-alpha blockade), were calculated. Monte Carlo simulations were undertaken to evaluate the methods with respect to their statistical power.
The estimated marginal WTP values using closed-ended questions with and without follow-up were DKK 637 (US $91) and DKK 1,268 (US $181), respectively. A Wilcoxon's signed-rank test showed that the difference of DKK 631 was significant. Moreover, including a follow-up question increases the precision of the result. Monte Carlo simulations showed that trade-offs between power (i.e., the probability of a correct rejection of a false null hypothesis), efficiency, and size may exist in the two models.
There was a significant difference between the WTP estimates when using closed-ended questions with and without follow-up. When choosing between the models, however, power, efficiency, and size could be used as selection criteria.