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Induced-Value Tests of Contingent Valuation Elicitation Mechanisms

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Author Info
Christian Vossler ()
Michael McKee

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Abstract

Using an induced-value experimental design that varies whether values for a “good” are certain or uncertain and whether payment is real or hypothetical, this study investigates issues of demand revelation, hypothetical bias, and value uncertainty for four elicitation mechanisms used in contingent valuation surveys: dichotomous choice, dichotomous choice with follow-up certainty question, payment card, and multiple-bounded discrete choice. For all elicitation mechanisms, we find no evidence of hypothetical bias: voting decisions do not vary systematically when payment is hypothetical versus when it is real. Under all design conditions we find the fewest deviations between stated and induced values and the strongest evidence of demand revelation with dichotomous choice. Stated uncertainty in dichotomous choice follow-up and multiple-bounded discrete choice questions does correlate with uncertain induced values, but the signal is noisy. We discuss the implications of our findings for the design of contingent valuation surveys. Copyright Springer Science+Business Media, Inc. 2006

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File URL: http://hdl.handle.net/10.1007/s10640-006-9011-5
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Publisher Info
Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 35 (2006)
Issue (Month): 2 (October)
Pages: 137-168
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Handle: RePEc:kap:enreec:v:35:y:2006:i:2:p:137-168

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Web page: http://www.springerlink.com/link.asp?id=100263

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Related research
Keywords: contingent valuation; demand revelation; elicitation effects; experiments; hypothetical bias; value uncertainty; willingness to pay; C91; Q51;

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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. Christian A. Vossler & Robert G. Ethier & Gregory L. Poe & Michael P. Welsh, 2003. "Payment Certainty in Discrete Choice Contingent Valuation Responses: Results from a Field Validity Test," Southern Economic Journal, Southern Economic Association, vol. 69(4), pages 886-902, April.
  2. Taylor, Laura O. & McKee, Michael & Laury, Susan K. & Cummings, Ronald G., 2001. "Induced-value tests of the referendum voting mechanism," Economics Letters, Elsevier, vol. 71(1), pages 61-65, April. [Downloadable!] (restricted)
  3. Irwin, Julie R, et al, 1998. "Payoff Dominance vs. Cognitive Transparency in Decision Making," Economic Inquiry, Oxford University Press, vol. 36(2), pages 272-85, April.
  4. 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. [Downloadable!] (restricted)
  5. 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)
  6. Joseph Little & Robert Berrens, 2004. "Explaining Disparities between Actual and Hypothetical Stated Values: Further Investigation Using Meta-Analysis," Economics Bulletin, Economics Bulletin, vol. 3(6), pages 1-13. [Downloadable!]
  7. Gibbard, Allan, 1973. "Manipulation of Voting Schemes: A General Result," Econometrica, Econometric Society, vol. 41(4), pages 587-601, July. [Downloadable!] (restricted)
  8. Todd Cherry & Peter Frykblom & Jason Shogren & John List & Melonie Sullivan, 2004. "Laboratory Testbeds and Non-Market Valuation: The Case of Bidding Behavior in a Second-Price Auction with an Outside Option," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 29(3), pages 285-294, November. [Downloadable!] (restricted)
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  9. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December. [Downloadable!]
  10. 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. [Downloadable!]
  11. Li Chuan-Zhong & Mattsson Leif, 1995. "Discrete Choice under Preference Uncertainty: An Improved Structural Model for Contingent Valuation," Journal of Environmental Economics and Management, Elsevier, vol. 28(2), pages 256-269, March. [Downloadable!] (restricted)
  12. Burton, Anthony C. & Carson, Katherine S. & Chilton, Susan M. & Hutchinson, W. George, 2003. "An experimental investigation of explanations for inconsistencies in responses to second offers in double referenda," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 472-489, November. [Downloadable!] (restricted)
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  13. 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)
  14. Matthew Rabin, 2000. "Risk Aversion and Expected-Utility Theory: A Calibration Theorem," Econometrica, Econometric Society, vol. 68(5), pages 1281-1292, September.
  15. Berrens, Robert P. & Jenkins-Smith, Hank & Bohara, Alok K. & Silva, Carol L., 2002. "Further Investigation of Voluntary Contribution Contingent Valuation: Fair Share, Time of Contribution, and Respondent Uncertainty," Journal of Environmental Economics and Management, Elsevier, vol. 44(1), pages 144-168, July. [Downloadable!] (restricted)
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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. Glenn Blomquist & Karen Blumenschein & Magnus Johannesson, 2009. "Eliciting Willingness to Pay without Bias using Follow-up Certainty Statements: Comparisons between Probably/Definitely and a 10-point Certainty Scale," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 43(4), pages 473-502, August. [Downloadable!] (restricted)
  2. Cecilia Håkansson, 2008. "A new valuation question: analysis of and insights from interval open-ended data in contingent valuation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 39(2), pages 175-188, February. [Downloadable!] (restricted)
  3. Yohei Mitani & Nicholas Flores, 2007. "Does gender matter for demand revelation in threshold public goods experiments?," Economics Bulletin, Economics Bulletin, vol. 3(27), pages 1-7. [Downloadable!]
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