Valuation of Military Training Benefit – A Contingent Valuation Method Approach

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Authors
  1. Sokri, A.
Corporate Authors
Defence R&D Canada - Centre for Operational Research and Analysis, Ottawa ON (CAN)
Abstract
Military training constitutes a significant portion of military spending. However, the valuation of such non-market goods remains an under-researched area. This paper addresses this gap by proposing an economic approach to quantify the operational output of military training. To place monetary values on this activity, a dichotomous choice parametric model is developed to derive an average willingness-to-pay (WTP) from the perspective of the potential user. This stated-preference estimation technique is a survey-based method with a closed-ended-question. The WTP is statistically inferred from the choices made instead of being directly stated by respondents. The paper mathematically derives the model along with detailed sensitivity analysis to assess the impact of marginal changes to key parameters of the model. The model developed in this paper is expected to help managers compare and prioritize different training projects as well as allocate scarce training resources among competing demands.

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Report Number
DRDC-CORA-TM-2012-166 — Technical Memorandum
Date of publication
01 Jul 2012
Number of Pages
36
DSTKIM No
CA036713
CANDIS No
536372
Format(s):
Electronic Document(PDF)

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