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Experimental Results on Expressed Certainty and Hypothetical Bias in Contingent Valuation

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  • Karen Blumenschein
  • Magnus Johannesson
  • Glenn C. Blomquist
  • Bengt Liljas
  • Richard M. O'Conor

Abstract

Use of the contingent valuation method is controversial among economists because it is based on hypothetical rather than real choices. Previous experiments have suggested that the commonly used dichotomous choice contingent valuation method leads to hypothetical bias, i.e., overestimates the real willingness to pay. We carried out an experiment to compare the dichotomous choice contingent valuation method with real purchase decisions for a consumer good. We confirm previous findings that hypothetical yes responses overestimate real purchase decisions, but we cannot reject the null hypothesis that definitely sure yes responses correspond to real purchase decisions.

Suggested Citation

  • Karen Blumenschein & Magnus Johannesson & Glenn C. Blomquist & Bengt Liljas & Richard M. O'Conor, 1998. "Experimental Results on Expressed Certainty and Hypothetical Bias in Contingent Valuation," Southern Economic Journal, John Wiley & Sons, vol. 65(1), pages 169-177, July.
    • Handle: RePEc:wly:soecon:v:65:y:1998:i:1:p:169-177
    DOI: 10.1002/j.2325-8012.1998.tb00136.x
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    1. Lusk, Jayson L. & Daniel, M. Scott & Mark, Darrell R. & Lusk, Christine L., 2001. "Alternative Calibration And Auction Institutions For Predicting Consumer Willingess To Pay For Nongenetically Modified Corn Chips," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(1), pages 1-18, July.
    2. Johansson-Stenman , Olof & Svedsäter, Henrik, 2003. "Self Image And Choice Experiments: Hypothetical And Actual Willingness To Pay," Working Papers in Economics 94, University of Gothenburg, Department of Economics.
    3. Seung Pil Lee, 2022. "The Sports-Based Holistic Development Model: The General Public’s Transformation by Having a Meaningful Story Through Sport," SAGE Open, , vol. 12(4), pages 21582440221, October.
    4. Glenn C. Blomquist, 2004. "Self-Protection and Averting Behavior, Values of Statistical Lives, and Benefit Cost Analysis of Environmental Policy," Review of Economics of the Household, Springer, vol. 2(1), pages 89-110, March.
    5. Jerrod Penn & Wuyang Hu, 2023. "Adjusting and Calibrating Elicited Values Based on Follow-up Certainty Questions: A Meta-analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 84(4), pages 919-946, April.
    6. Poe, Gregory L. & Giraud, Kelly L. & Loomis, John B., 2001. "Simple Computational Methods for Measuring the Difference of Empirical Distributions: Application to Internal and External Scope Tests in Contingent Valuation," Staff Papers 121130, Cornell University, Department of Applied Economics and Management.
    7. Jiang, Qi & Penn, Jerrod & Hu, Wuyang, 2022. "Real payment priming to reduce potential hypothetical bias," Journal of choice modelling, Elsevier, vol. 45(C).
    8. Obinna Onwujekwe, 2001. "Searching for a better willingness to pay elicitation method in rural Nigeria: the binary question with follow‐up method versus the bidding game technique," Health Economics, John Wiley & Sons, Ltd., vol. 10(2), pages 147-158, March.
    9. Norwood, F. Bailey, 2005. "Can Calibration Reconcile Stated and Observed Preferences?," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 37(1), pages 1-10, April.
    10. Newell, Laurienne Whinstanley & Swallow, Stephen K., 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).
    11. Satimanon, Thasanee & Weatherspoon, Dave D., 2010. "Hedonic Analysis of Sustainable Food Products," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 13(4), pages 1-17.
    12. Goss, Jody & Holcomb, Rodney B. & Ward, Clement E., 2002. "Factors Influencing Consumer Decisions Related To "Natural" Beef In The Southern Plains," Journal of Food Distribution Research, Food Distribution Research Society, vol. 33(1), pages 1-12, March.
    13. Krčál, Ondřej & Peer, Stefanie & Staněk, Rostislav & Karlínová, Bára, 2019. "Real consequences matter: Why hypothetical biases in the valuation of time persist even in controlled lab experiments," Economics of Transportation, Elsevier, vol. 20(C).
    14. Winn, Chris & Norwood, F. Bailey & Chung, Chanjin & Ward, Clement E., 2004. "Surveying the Feasibility of a Voluntary Beef Checkoff," 2004 Annual meeting, August 1-4, Denver, CO 20385, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    15. Magdalena Brzozowicz & Michał Krawczyk, 2022. "Anchors on prices of consumer goods only hold when decisions are hypothetical," PLOS ONE, Public Library of Science, vol. 17(1), pages 1-23, January.

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