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A Field Experiment Involving Cash and Hypothetical Charitable Donations

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Author Info
Douglas Macmillan ()
Trevor Smart
Andrew Thorburn
Abstract

An important focus for concern about Contingent Valuation (CV) is that hypothetical payments for non-market goods are biased upwards in comparison to cash payments. Lack of realism, through its influence on incentives to mis-report payments, may explain the divergence. This paper reports on a study which attempts to overcome this problem by emulating a real fund-raising solicitation by the Isle of Eigg Trust for both real and hypothetical donations. In contrast to previous results, the mean cash donation was higher (£3.71) than the man CV donation (£3.41). A third survey, which used a neutral CV design, implemented by a research organization, obtained a mean donation which was much higher (£6.21) than the cash equivalent. Copyright Kluwer Academic Publishers 1999

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File URL: http://hdl.handle.net/10.1023/A:1008304405734
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Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 14 (1999)
Issue (Month): 3 (October)
Pages: 399-412
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Handle: RePEc:kap:enreec:v:14:y:1999:i:3:p:399-412

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Related research
Keywords: bias; cash and hypothetical donations; contingent valuation; realism;

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Carson, Richard T. & Hanemann, W. Michael, 2006. "Contingent Valuation," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 17, pages 821-936 Elsevier. [Downloadable!] (restricted)
  2. John Loomis & Thomas Brown & Beatrice Lucero & George Peterson, 1996. "Improving Validity Experiments of Contingent Valuation Methods: Results of Efforts to Reduce the Disparity of Hypothetical and Actual Willingness to Pay," Land Economics, University of Wisconsin Press, vol. 72(4), pages 450-461. [Downloadable!] (restricted)
  3. Kalle Seip & Jon Strand, 1992. "Willingness to pay for environmental goods in Norway: A contingent valuation study with real payment," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 2(1), pages 91-106, January. [Downloadable!] (restricted)
  4. Thomas C. Brown & Patricia A. Champ & Richard C. Bishop & Daniel W. McCollum, 1996. "Which Response Format Reveals the Truth about Donations to a Public Good?," Land Economics, University of Wisconsin Press, vol. 72(2), pages 152-166. [Downloadable!] (restricted)
  5. Diamond, Peter A & Hausman, Jerry A, 1994. "Contingent Valuation: Is Some Number Better than No Number?," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 45-64, Fall. [Downloadable!] (restricted)
  6. Fischhoff, Baruch & Furby, Lita, 1988. " Measuring Values: A Conceptual Framework for Interpreting Transactions with Special Reference to Contingent Valuation of Visibility," Journal of Risk and Uncertainty, Springer, vol. 1(2), pages 147-84, June.
  7. Kealy, Mary Jo & Montgomery, Mark & Dovidio, John F., 1990. "Reliability and predictive validity of contingent values: Does the nature of the good matter?," Journal of Environmental Economics and Management, Elsevier, vol. 19(3), pages 244-263, November. [Downloadable!] (restricted)
  8. Hanemann, W Michael, 1994. "Valuing the Environment through Contingent Valuation," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 19-43, Fall. [Downloadable!] (restricted)
  9. Vivien Foster & Ian J. Bateman & David Harley, 1997. "Real And Hypothetical Willingness To Pay For Environmental Preservation: A Non-Experimental Comparison," Journal of Agricultural Economics, Blackwell Publishing, vol. 48(1-3), pages 123-137. [Downloadable!] (restricted)
  10. Hoehn, John P. & Randall, Alan, 1987. "A satisfactory benefit cost indicator from contingent valuation," Journal of Environmental Economics and Management, Elsevier, vol. 14(3), pages 226-247, September. [Downloadable!] (restricted)
  11. 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. [Downloadable!] (restricted)
  12. Sinden, J.A., 1988. "Empirical Tests Of Hypothetical Bias In Consumers' Surplus Surveys," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 32(02-03). [Downloadable!]
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Debra Israel, 2007. "Charitable Donations: Evidence of Demand for Environmental Protection?," International Advances in Economic Research, Springer, vol. 13(2), pages 171-182, May. [Downloadable!] (restricted)
  2. Edward J. Lopez & W. Robert Nelson, 2005. "The Endowment Effect in a Public Good Experiment," Experimental 0512001, EconWPA. [Downloadable!]
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