Willingness to pay

{
  "id": "MLC-T-ENV-030468",
  "term": "Willingness to pay",
  "field": "Environment",
  "definition": "1. A measure of the value an individual would place on reducing risk of death or illness. It is the maximum dollar amount the individual would be willing to give up in a given hypothetical risk-reducing situation.\n\n2. Value of a good defined by what a person would be willing to pay for an item that is not offered in the marketplace.\n\n3. Method of estimating the value of activities, services, or other goods, where value is defined as the maximum amount a consumer would be willing to pay for the opportunity rather than do without. The total willingness to pay, minus the user's costs of participating in the opportunity, defines the consumer surplus and benefits.\n\n4. Amount a person would be willing to pay, sacrifice, or exchange for a benefit.\n\n5. The largest amount of money that an individual would pay to receive the benefits (or avoid the damages) resulting from a policy change, without being made worse off. In the case of an environmental policy, WTP is the maximum amount of money an individual would pay to obtain an improvement (or avoid a decrement) in an environmental effect of concern.",
  "abbreviation": "WTP",
  "subject": "Social and economic factors",
  "references": [
    "USDA 2004; Thesaurus of Terms Used in Microbial Risk Assessment",
    "EPA Subject Matter Expert - Thurston",
    "DOI Bureau of Reclamation Managing Water in the West Glossary",
    "DHS Risk Steering Committee Risk Lexicon 2010 Edition",
    "Economic Analyses Glossary; Preparing Economic Analyses Glossary"
  ],
  "url": "https://mlchart.com/terminology/environment/willingness-to-pay/"
}