We offer a new approach to investigate hypothetical bias in contingent valuation using a latent choice multinomial logit model. To develop this model, we extend Dempster, Laird, and Rubin's 1977 work on the expectations maximization algorithm to the estimation of a multinomial logit model with...

The most persistently troubling empirical result in the contingent valuation method literature is the tendency for hypothetical willingness to pay to overestimate real willingness to pay. We suggest a new approach to test and correct for hypothetical bias using a latent choice multinomial logit...