singleb -- Contingent Valuation using Single-Bounded Dichotomous Choice
singleb varlist [if] [in] [weight] [, level(#) noconstant]
This command uses maximum likelihood (under the assumption of normality) to estimate the single-bounded dichotomous choice model for contingent valuation (Cameron and James, 1987). This command provides an alternative to the estimation via probit. The main advantage of this procedure is that we directly obtain point estimates (and standard errors) of the marginal effect that a change in the explanatory variable has on WTP.
The first variable in varlist should be the bid variable. The second variable should be the dummy for the response to the dichotomous choice question. The remaining variables will be interpreted as covariates or control variables.
For the constant only model the constant represents the mean WTP. For the model with explanatory variables the mean WTP can be obtained by multiplying the mean vector of explanatory variables by the vector of estimated coefficients.
. singleb bid response
. singleb bid response x1 x2
Use file singleb.dta to do the examples
Alejandro Lopez-Feldman Centro de Investigacion y Docencia Economicas, CIDE Email: firstname.lastname@example.org
Cameron, T. and M. James. 1987. Estimation Methods for "Closed-Ended" Contingent Valuation Surveys. Review of Economics and Statistics 69: 269-276.
I thank Brett Day for sharing the Stata code that helped me to get