Combining Intended Demand and Yes/No Responses in the Estimation of Contingent Valuation Models

The contingent valuation method (CVM) has limitations arising from the lack of a direct link between estimated willingness to pay and consumer behavior regarding the use of the good being evaluated. To estimate the total value of a resource under a capacity constraint, information on intended use is introduced as an integral part of the CVM. This combined approach allows use and non-use values to be distinguished for a sample of users and non-users. The econometric specification is applied to estimate the benefits of reducing water pollution on beaches located near an important metropolitan area of South America.