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Instrument-Induced Bias in Donation Mechanisms: Evidence from the Field

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  • Norwood Bailey

    ()
    (Oklahoma State University)

  • Lusk Jayson L

    ()
    (Oklahoma State University)

Abstract

Eliciting actual donations toward a public good has been proposed as a means of estimating a lower bound to individualsÂ’ compensating surplus, and can be accomplished using mail/phone surveys or field experiments. This study shows that when warm-glow is present, the elicitation instrument decreases the transaction costs of donating. This presents an obstacle to using the donation mechanism. As a remedy, we propose the use of a multi-donation mechanism where subjects can direct their donation to alternative public goods. Results from a field experiment confirm this instrument-induced bias can be large, suggesting field experiment practitioners should seriously consider how their experimental procedures may alter economic behavior.

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Bibliographic Info

Article provided by De Gruyter in its journal The B.E. Journal of Economic Analysis & Policy.

Volume (Year): 5 (2005)
Issue (Month): 2 (December)
Pages: 1-26

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Handle: RePEc:bpj:bejeap:v:contributions.5:y:2006:i:2:n:3

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  1. Carson, Richard T & Flores, Nicholas A, 2000. "Contingent Valuation: Controversies and Evidence," University of California at San Diego, Economics Working Paper Series qt75k752s7, Department of Economics, UC San Diego.
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  3. Glenn Harrison & John List, 2004. "Field experiments," Artefactual Field Experiments 00058, The Field Experiments Website.
  4. James Andreoni & A. Abigail Payne, 2003. "Do Government Grants to Private Charities Crowd Out Giving or Fund-raising?," American Economic Review, American Economic Association, vol. 93(3), pages 792-812, June.
  5. John List & Craig Gallet, 2001. "What Experimental Protocol Influence Disparities Between Actual and Hypothetical Stated Values?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 20(3), pages 241-254, November.
  6. Hayes, Dermot J. & Jensen, Helen H., 2003. "Lessons from the Danish Ban on Feed-Grade Antibiotics," Staff General Research Papers 11284, Iowa State University, Department of Economics.
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  8. John A. List & Robert P. Berrens & Alok K. Bohara & Joe Kerkvliet, 2004. "Examining the Role of Social Isolation on Stated Preferences," American Economic Review, American Economic Association, vol. 94(3), pages 741-752, June.
  9. Champ, Patricia A. & Bishop, Richard C. & Brown, Thomas C. & McCollum, Daniel W., 1997. "Using Donation Mechanisms to Value Nonuse Benefits from Public Goods," Journal of Environmental Economics and Management, Elsevier, vol. 33(2), pages 151-162, June.
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Cited by:
  1. John A. List, 2007. "Field Experiments: A Bridge Between Lab and Naturally-Occurring Data," NBER Working Papers 12992, National Bureau of Economic Research, Inc.

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