Comparison of the Methods of Designing Bid Offer Amounts in Dichotomous Choice Contingent Valuation Method

Despite controversy, the contingent valuation method (CVM) is widely used for non-market valuation. Among elicitation methods of CVM, the dichotomous choice (DC) has received significant attention. The purpose of this paper is to compare the methods of designing bid amounts. The Boyle, Welsh and Bishop’s method (1988), Cooper (1993) and the Abdelmoneim and Jeffrey (1995) methods are introduced and compared. First, these methods are widely explained then using pretest data that was open-ended, bid amounts were determined by using these methods. To use each of these three methods, sample size must be predetermined. Here, sample sizes of 200 and 500 were applied. Also, it’s necessary to assume a distribution for WTP data when using Boyle et. al. and Cooper’s methods. In this paper Normal and Lognormal distributions used; but Abdelmoneim and Jeffrey’s method is free of distribution for WTP data. Results show that Boyle et.al.’s method and Cooper’s method have better results than Abdelmoneim and Jeffrey’s method. It is supposed that researchers and users of CVM use these two methods to determine bid offer amounts.