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Contingent valuation and actual payment for voluntarily provided passive-use values: Assessing the effect of an induced truth-telling mechanism and elicitation formats

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Author Info
Knut Veisten
Ståle Navrud
Abstract

A fundamental question about the contingent valuation (CV) method is to what degree it predicts actual payments (AP). This has particularly been an intriguing matter related to voluntary provision of public goods representing primarily passive-use values. This paper reports the results from such a CV--AP comparison. Applying a voluntary payment mechanism there exists a theoretical expectation of upward bias in CV estimates and downward bias in AP. This study applied an induced truth-telling mechanism in one treatment group to assess the hypothetical bias effect in CV. The CV estimates in this treatment group were significantly lower than in the group that did not face this mechanism. But this effect was limited to those responding/acting to dichotomous choice, not affecting those responding to open-ended questions about willingness to pay.

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Article provided by Taylor and Francis Journals in its journal Applied Economics.

Volume (Year): 38 (2006)
Issue (Month): 7 (April)
Pages: 735-756
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Handle: RePEc:taf:applec:v:38:y:2006:i:7:p:735-756

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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. Rose, Steven K. & Clark, Jeremy & Poe, Gregory L. & Rondeau, Daniel & Schulze, William D., 2002. "The private provision of public goods: tests of a provision point mechanism for funding green power programs," Resource and Energy Economics, Elsevier, vol. 24(1-2), pages 131-155, February. [Downloadable!] (restricted)
  2. 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)
  3. Cameron, Trudy Ann & Poe, Gregory L. & Ethier, Robert G. & Schulze, William D., 2002. "Alternative Non-market Value-Elicitation Methods: Are the Underlying Preferences the Same?," Journal of Environmental Economics and Management, Elsevier, vol. 44(3), pages 391-425, November. [Downloadable!] (restricted)
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  5. 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)
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  11. 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)
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  14. 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)
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  1. Frode Alfnes & Chengyan Yue & Helen H. Jensen, 2009. "Cognitive Dissonance as a Means of Reducing Hypothetical Bias," Center for Agricultural and Rural Development (CARD) Publications 09-wp486, Center for Agricultural and Rural Development (CARD) at Iowa State University. [Downloadable!]
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