Model of Multiple-hurdle with Decision Process: A Possible Resolution of Protest Responses in Contingent Valuation Questions

The purpose of this paper is to construct a model, named as multiple-hurdle with decision process, which will be able to analyze data collected from a decision process with an obvious discrete choice and final continuous amount displaying. The model will extend to include not only real zero willingness to pay but also protest zero responses. The model is then applied to a set of data collected through double-bounded dichotomous
choice with open-ended follow-up contingent valuation method for the benefit evaluation of Kengting National Park in Taiwan. The results have shown that model of multiple-hurdle with decision process not only has better fit than OLS, standard Tobit, and double-hurdle model but also has precise interpretation for the characteristics of protest responses at different stage of decision process. The mean willingness to pay for the natural resource of the site, estimated from multiple-hurdle with decision process, is 346 NT dollars per year for each household. And its corresponding 95% confidence interval of mean willingness to pay for the benefit is thus also more reliable than those computed from OLS, standard Tobit, and double-hurdle mode.