Willingness to Pay

Willingness to pay (WTP) is the maximum amount of money an individual is willing to pay to ensure that a proposed service or good is available. Determining WTP through the contingent valuation method (CVM) is increasingly being used to generate information on the benefits of, and demand for, healthcare programs. The method is called contingent valuation because the respondent is asked to consider the contingency of a market existing for the thing being valued. The WTP could be for the availability of a resource to the individual (own use); for others, for example, poor people (altruism); needed by others or the individual in the future (option or nonuse); or a combination of any of these measures. CVM is accepted as a theoretically correct method to ...

  • Loading...
locked icon

Sign in to access this content

Get a 30 day FREE TRIAL

  • Watch videos from a variety of sources bringing classroom topics to life
  • Read modern, diverse business cases
  • Explore hundreds of books and reference titles