1. a survey of willingness-to-pay

You have conducted a contingent valuation study to assess people's willingness to pay for the expected benefits of a new program to reduce traffic injuries in their community.

The results of your survey are recorded below, showing how many people would ("yes") and would not ("no") be willing to pay the stated prices ("bids") for having the program in place.

Bid ($)	Yes answers	No answers
0	100	0
10	96	4
50	82	18
100	85	15
200	60	40
400	42	58
800	20	80
1600	0	100

A.Estimate the median WTP for this program's benefits.

B.Estimate the mean WTP for this program's benefits.

C.Suppose that the results of your study were as shown above, except that 10 out of 100 respondents say they would be willing to pay $1,600. How would this affect your estimates of the median WTP and mean WTP?

D. Suppose that the members of this community were asked to vote on a whether or not this program should be implemented. The referendum states that, if the program is approved, it will be funded by billing each adult in the community some fixed amount of money. If the amount that each adult would be billed were equal to the mean WTP you calculated in part B of this problem, would you expect the referendum to be approved by the voters? (State any assumptions that you make.)