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Estimating Hypothetical Bias in Economically Emergent Africa: A Generic Public Good Experiment

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  • Caplan, Arthur J.
  • Aadland, David
  • Macharia, Anthony

Abstract

This paper reports results from a contingent valuation based public good experiment conducted in the African nation of Botswana. In a sample of university students, we find evidence that stated willingness to contribute to a public good in a hypothetical setting is higher than actual contribution levels. However, results from regression analysis suggest that this is true only in the second round of the experiment, when participants making actual contributions have learned to significantly lower their contribution levels. As globalization expands markets, and economies such as Botswana’s continue to modernize, there is a growing need to understand how hypothetical bias will influence the valuation of public goods.

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File URL: http://purl.umn.edu/90836
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Bibliographic Info

Article provided by Northeastern Agricultural and Resource Economics Association in its journal Agricultural and Resource Economics Review.

Volume (Year): 39 (2010)
Issue (Month): 2 (April)
Pages:

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Handle: RePEc:ags:arerjl:90836

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Web page: http://www.narea.org/
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Related research

Keywords: hypothetical bias; public good; willingness to pay; Botswana; Environmental Economics and Policy;

References

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  1. Mariah Ehmke & Jayson Lusk & John List, 2008. "Is hypothetical bias a universal phenomenon? A multinational investigation," Artefactual Field Experiments 00041, The Field Experiments Website.
  2. John A. List, 2005. "The Behavioralist Meets the Market: Measuring Social Preferences and Reputation Effects in Actual Transactions," NBER Working Papers 11616, National Bureau of Economic Research, Inc.
  3. Rondeau, Daniel & D. Schulze, William & Poe, Gregory L., 1999. "Voluntary revelation of the demand for public goods using a provision point mechanism," Journal of Public Economics, Elsevier, vol. 72(3), pages 455-470, June.
  4. John A. List, 2003. "Does Market Experience Eliminate Market Anomalies?," The Quarterly Journal of Economics, MIT Press, vol. 118(1), pages 41-71, February.
  5. Bengt Kristrom, 1990. "A Non-Parametric Approach to the Estimation of Welfare Measures in Discrete Response Valuation Studies," Land Economics, University of Wisconsin Press, vol. 66(2), pages 135-139.
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Cited by:
  1. Marchegiani, Lucia & Reggiani, Tommaso & Rizzolli, Matteo, 2011. "How Unjust! An Experimental Investigation of Supervisors' Evaluation Errors and Agents' Incentives," IZA Discussion Papers 6254, Institute for the Study of Labor (IZA).
  2. Dominique Ami & Frédéric Aprahamian & Olivier Chanel & Stéphane Luchini, 2011. "A Test of Cheap Talk in Different Hypothetical Contexts: The Case of Air Pollution," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 50(1), pages 111-130, September.
  3. Messer, Kent D. & Murphy, James J., 2010. "FOREWORD: Special Issue on Experimental Methods in Environmental, Natural Resource, and Agricultural Economics," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 39(2), April.
  4. Lucia Marchegiani & Tommaso Reggiani & Matteo Rizzolli, 2013. "Severity vs. Leniency Bias in Performance Appraisal: Experimental evidence," BEMPS - Bozen Economics & Management Paper Series BEMPS01, School of Economics and Management at the Free University of Bozen.

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