Aadland and Caplan (2004) point out an inconsistency in the model in Whitehead (2002). Specifically, the model suffers from (1) an incorrect interpretation of the shift coefficient, and (2) omitted variables when covariates are included. This leads to incorrect formulas for measurement of the willingness-to-pay values in equations and (Whitehead 2002, 289). I agree with their comments and take this opportunity to present a revised model inspired by Aadland and Caplan.
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