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Donation Payment Mechanisms and Contingent Valuation: An Empirical Study of Hypothetical Bias

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Author Info
Patricia Champ ()
Richard Bishop
Abstract

Donation payment mechanisms are well suited forsome contingent valuation studies. In aneffort to better understand the discrepancythat has been consistently found between actualand hypothetical donations, we investigate anapproach to estimating actual willingness todonate using contingent donations with afollow-up question in which respondents ratethe level of certainty about their response tothe contingent donation question. The approachallows us to estimate the magnitude of thehypothetical bias and identify the respondentsresponsible for the bias. Identification ofthe respondents responsible for thehypothetical bias is the first step towarddeveloping an understanding of the causes andpossible remedies. In this study we find thatmost of the respondents (80%) to thecontingent donation question provide a responseconsistent with how we predict they wouldrespond in an actual donation situation. Copyright Kluwer Academic Publishers 2001

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File URL: http://hdl.handle.net/10.1023/A:1011604818385
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Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 19 (2001)
Issue (Month): 4 (August)
Pages: 383-402
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Handle: RePEc:kap:enreec:v:19:y:2001:i:4:p:383-402

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Related research
Keywords: actual donations; calibration; contingent donations; contingent valuation; hypothetical bias; uncertainty;

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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. Welsh, Michael P. & Poe, Gregory L., 1998. "Elicitation Effects in Contingent Valuation: Comparisons to a Multiple Bounded Discrete Choice Approach," Journal of Environmental Economics and Management, Elsevier, vol. 36(2), pages 170-185, September. [Downloadable!] (restricted)
  2. Richard T. Carson & W. Michael Hanemann & Raymond J. Kopp & Jon A. Krosnick & Robert Cameron Mitchell & Stanley Presser, 1998. "Referendum Design And Contingent Valuation: The Noaa Panel'S No-Vote Recommendation," The Review of Economics and Statistics, MIT Press, vol. 80(2), pages 335-338, May. [Downloadable!] (restricted)
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  3. Richard Carson & Theodore Groves, 2007. "Incentive and informational properties of preference questions," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 37(1), pages 181-210, May. [Downloadable!] (restricted)
  4. Cummings, Ronald G, et al, 1997. "Are Hypothetical Referenda Incentive Compatible?," Journal of Political Economy, University of Chicago Press, vol. 105(3), pages 609-21, June.
  5. 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)
  6. Poe, Gregory L. & Clark, Jeremy & Schulze, William, 1997. "Can Hypothetical, Questions Predict Actual, Participation In Public Programs? A Field Validity Test Using A Provision Point Mechanism," Working Papers 7264, Cornell University, Department of Applied Economics and Management. [Downloadable!]
  7. Loomis John & Lockwood Michael & DeLacy Terry, 1993. "Some Empirical Evidence on Embedding Effects in Contingent Valuation of Forest Protection," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages 45-55, July. [Downloadable!] (restricted)
  8. Chilton, Susan M. & Hutchinson, W. George, 1999. "Some Further Implications of Incorporating the Warm Glow of Giving into Welfare Measures: A Comment on the Use of Donation Mechanisms by Champet al," Journal of Environmental Economics and Management, Elsevier, vol. 37(2), pages 202-209, March. [Downloadable!] (restricted)
  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. [Downloadable!] (restricted)
  10. Spencer, Michael A. & Swallow, Stephen K. & Miller, Christopher J., 1998. "Valuing Water Quality Monitoring: A Contingent Valuation Experiment Involving Hypothetical And Real Payments," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 27(1), April. [Downloadable!]
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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. Lars Hultkrantz & Gunnar Lindberg & Camilla Andersson, 2006. "The value of improved road safety," Journal of Risk and Uncertainty, Springer, vol. 32(2), pages 151-170, March. [Downloadable!] (restricted)
  2. Matthew Kotchen & Michael Moore, 2007. "Conservation: From Voluntary Restraint to a Voluntary Price Premium," NBER Working Papers 13678, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Das, Chhandita & Anderson, Christopher & Swallow, Stephen, 2006. "Incentive Compatible Mechanism Design for Discrete Choice Surveys," 2006 Annual meeting, July 23-26, Long Beach, CA 21327, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  4. Murphy, James J. & Stevens, Thomas H., 2004. "Contingent Valuation, Hypothetical Bias, and Experimental Economics," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 33(2), October. [Downloadable!]
  5. Sund, Björn, 2009. "Certainty calibration in contingent valuation - exploring the within-difference between dichotomous choice and open-ended answers as a certainty measure," Working Papers 2009:1, Örebro University, Swedish Business School. [Downloadable!]
  6. Poe, Gregory L. & Giraud, Kelly L. & Loomis, John B., 2002. "Simple Computational Methods for Measuring the Difference of Empirical Distributions: Application to Internal and External Scope Tests in Contingent Valuation," 2002 Annual meeting, July 28-31, Long Beach, CA 19664, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  7. Anabeth L Indab, 2007. "Willingness to Pay for Whale Shark Conservation in Sorsogon, Philippines," EEPSEA Special and Technical Paper tp200711t2, Economy and Environment Program for Southeast Asia (EEPSEA), revised Nov 2007. [Downloadable!]
  8. Gregory Poe & Jeremy Clark & Daniel Rondeau & William Schulze, 2002. "Provision Point Mechanisms and Field Validity Tests of Contingent Valuation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 23(1), pages 105-131, September. [Downloadable!] (restricted)
  9. Gubanova, Tatiana & Adamowicz, W.L. & McMillan, Melville, 2009. "‘Pocket and Pot’: Hypothetical Bias in a No-Free-Riding Public Contribution Game," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49318, Agricultural and Applied Economics Association. [Downloadable!]
  10. Newell, Laurienne Whinstanley & Swallow, Stephen, 2002. "Are Stated Preferences Invariant To The Prospect Of Real-Money Choice?," 2002 Annual meeting, July 28-31, Long Beach, CA 19623, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  11. 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)
  12. Hiselius, Lena Winslott, 2005. "Preferences regarding road transports of hazardous materials using choice experiments - any sign of biases?," Working Papers 2005:30, Lund University, Department of Economics. [Downloadable!]
  13. Winslott Hiselius, Lena, 2003. "The Value of Road and Railway Safety - an Overview," Working Papers 2003:13, Lund University, Department of Economics. [Downloadable!]
  14. Alberto Longo & Anil Markandya & Marta Petrucci, 2006. "The Internalization of Externalities in The Production of Electricity: Willingness to Pay for the Attributes of a Policy for Renewable Energy," Working Papers 2006.132, Fondazione Eni Enrico Mattei. [Downloadable!]
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  15. John C. Whitehead & Peter A. Groothuis & Rob Southwick, 2007. "Linking Recreation Demand and Willingness to Pay with the Inclusive Value: Valuation of Saginaw Bay Coastal Marsh," Working Papers 07-09, Department of Economics, Appalachian State University. [Downloadable!]
  16. Johnston, Robert J. & Joglekar, Deepak P., 2005. "Validating Hypothetical Surveys Using Binding Public Referenda: Implications for Stated Preference Valuation," 2005 Annual meeting, July 24-27, Providence, RI 19519, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  17. Akter, Sonia & Bennett, Jeff, 2009. "A cognitive psychological approach of analyzing preference uncertainty in contingent valuation," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 47938, Australian Agricultural and Resource Economics Society. [Downloadable!]
  18. Ana Bedate & Luis Herrero & José Sanz, 2009. "Economic valuation of a contemporary art museum: correction of hypothetical bias using a certainty question," Journal of Cultural Economics, Springer, vol. 33(3), pages 185-199, August. [Downloadable!] (restricted)
  19. Carlsson, Fredrik & Köhlin, Gunnar & Mekonnen, Alemu, 2004. "Contingent valuation of community plantations in Ethiopia: a look into value elicitation formats and intra-household preference variations," Working Papers in Economics 151, Göteborg University, Department of Economics. [Downloadable!]
  20. Champ, Patricia A. & Moore, Rebecca & Bishop, Richard C., 2004. "Hypothetical Bias: The Mitigating Effects Of Certainty Questions And Cheap Talk," 2004 Annual meeting, August 1-4, Denver, CO 19951, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
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