Calculating willingness-to-pay with discrete cost and random coefficients in discrete choice experiments.

ABSTRACT:

Objectives

This study provides step-by-step guidance to calculate willingness-to-pay (WTP) in discrete choice experiments that involve discrete cost. It highlights the limitations of assuming a linear disutility for cost in WTP calculation.

Methods

Five mixed-logit models were considered. Log-normal distributions were applied to cost parameters for four models under the assumption that utility (disutility) for cost should be negative (positive) or at least non-positive (non-negative) for all individuals. Piecewise linear utility in cost, using an iterative process, was proposed to calculate the WTP for the discrete cost models. Individual level simulations - considering individual random preference - were conducted to obtain the median WTP across all individuals and compared

SUBMITTER: Ong C 

PROVIDER: S-EPMC12273327 | biostudies-literature | 2025 Jul

REPOSITORIES: biostudies-literature