Nonparametric Discrete Choice Methods for Measuring Economic Values

The purpose of this research is to use measures of willingness to pay derived from random utility models as the basis for evaluating the properties of parametric and nonparametric estimators with binary choice data. Monte Carlo simulations are conducted to evaluate two parametric methods and a nonparametric method. The simulation results indicate that simple parametric methods outperform the nonparametric method for a range of underlying preference structures