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Warm glow, free-riding and vehicle neutrality in a health-related contingent valuation study

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Author Info
Franz Hackl (Department of Economics, Johannes Kepler University of Linz, Austria)
Gerald J. Pruckner (Department of Public Economics, University of Innsbruck, Innsbruck, Austria)

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Abstract

Criticism of contingent valuation (CV) stresses warm glow and free-riding as possible causes for biased willingness to pay figures. We present an empirical framework to study the existence of warm glow and free-riding in hypothetical WTP answers based on a CV survey for the measurement of health-related Red Cross services. Both in conventional double-bounded and spike models we do not find indication of warm glow phenomena and free-riding behaviour. The results are very robust and insensitive to the applied payment vehicles. Theoretical objections against CV do not find sufficient empirical support. Copyright © 2004 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/hec.933
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Publisher Info
Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 14 (2005)
Issue (Month): 3 ()
Pages: 293-306
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Handle: RePEc:wly:hlthec:v:14:y:2005:i:3:p:293-306

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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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. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-58, December. [Downloadable!] (restricted)
  2. Nunes, Paulo A. L. D. & Schokkaert, Erik, 2003. "Identifying the warm glow effect in contingent valuation," Journal of Environmental Economics and Management, Elsevier, vol. 45(2), pages 231-245, March. [Downloadable!] (restricted)
  3. Kahneman, Daniel & Ritov, Ilana, 1994. "Determinants of Stated Willingness to Pay for Public Goods: A Study in the Headline Method," Journal of Risk and Uncertainty, Springer, vol. 9(1), pages 5-38, July.
  4. Culyer, A J, 1971. "Medical Care and the Economics of Giving," Economica, London School of Economics and Political Science, vol. 38(151), pages 295-303, August. [Downloadable!] (restricted)
  5. Chilton, S. M. & Hutchinson, W. G., 2000. "A note on the warm glow of giving and scope sensitivity in contingent valuation studies," Journal of Economic Psychology, Elsevier, vol. 21(4), pages 343-349, August. [Downloadable!] (restricted)
  6. Hackl, Franz & Pruckner, Gerald J, 1999. "On the Gap between Payment Card and Closed-Ended CVM-Answers," Applied Economics, Taylor and Francis Journals, vol. 31(6), pages 733-42, June. [Downloadable!] (restricted)
  7. Shiell, Alan & Gold, Lisa, 2002. "Contingent valuation in health care and the persistence of embedding effects without the warm glow," Journal of Economic Psychology, Elsevier, vol. 23(2), pages 251-262, April. [Downloadable!] (restricted)
  8. Alan Diener & Bernie O'Brien & Amiram Gafni, 1998. "Health care contingent valuation studies: a review and classification of the literature," Health Economics, John Wiley & Sons, Ltd., vol. 7(4), pages 313-326.
  9. Kahneman, Daniel & Knetsch, Jack L., 1992. "Valuing public goods: The purchase of moral satisfaction," Journal of Environmental Economics and Management, Elsevier, vol. 22(1), pages 57-70, January. [Downloadable!] (restricted)
  10. Richard D. Smith, 2003. "Construction of the contingent valuation market in health care:a critical assessment," Health Economics, John Wiley & Sons, Ltd., vol. 12(8), pages 609-628. [Downloadable!]
  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. Jan Abel Olsen & Richard D. Smith, 2001. "Theory versus practice: a review of 'willingness-to-pay' in health and health care," Health Economics, John Wiley & Sons, Ltd., vol. 10(1), pages 39-52.
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  1. Minhaj Mahmud, 2006. "Contingent Valuation of Mortality Risk Reduction in Developing Countries: A Mission Impossible?," Keele Economics Research Papers KERP 2006/01, Centre for Economic Research, Keele University. [Downloadable!]
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