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The Causes of Order Effects in Contingent Valuation Surveys: An Experimental Investigation

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Author Info
Jeremy Clark () (University of Canterbury)
Lana Friesen

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Abstract

CV researchers have found that the hypothetical values respondents place on a nested sequence of environmental goods are sensitive to the order in which the goods are presented. Typically, the smallest bundle of goods is valued more highly if presented first than if following more comprehensive bundles. Such effects appear even when each bundle is valued from an "exclusive" list, or as an alternative to any other, so that income and substitution effects are controlled. Order of presentation has also affected the degree to which values are sensitive to scope. We conduct lab experiments where participants are asked to value sequences of nested goods for actual purchase from an exclusive list using the incentive compatible BDM mechanism. We test whether order effects occur in valuation for a) induced value goods, b) actual private goods, and c) identical private goods that are to be donated to charities. We find significant order effects when the goods are valued for own use, but not when they are valued for donation.

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File URL: http://www.econ.canterbury.ac.nz/RePEc/cbt/econwp/0606.pdf
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Publisher Info
Paper provided by University of Canterbury, Department of Economics in its series Working Papers in Economics with number 06/06.

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Length: 39 pages
Date of creation: 16 Jan 2006
Date of revision:
Handle: RePEc:cbt:econwp:06/06

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Keywords: Order effects exclusive list warm glow contingent valuation

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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.:
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  11. Heberlein, Thomas A. & Wilson, Matthew A. & Bishop, Richard C. & Schaeffer, Nora Cate, 2005. "Rethinking the scope test as a criterion for validity in contingent valuation," Journal of Environmental Economics and Management, Elsevier, vol. 50(1), pages 1-22, July. [Downloadable!] (restricted)
  12. Tversky, Amos & Kahneman, Daniel, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, MIT Press, vol. 106(4), pages 1039-61, November. [Downloadable!] (restricted)
  13. Carson Richard T. & Mitchell Robert Cameron, 1995. "Sequencing and Nesting in Contingent Valuation Surveys," Journal of Environmental Economics and Management, Elsevier, vol. 28(2), pages 155-173, March. [Downloadable!] (restricted)
  14. Bateman, Ian J, et al, 1997. "A Test of the Theory of Reference-Dependent Preferences," The Quarterly Journal of Economics, MIT Press, vol. 112(2), pages 479-505, May.
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  1. Andersson, Henrik & Svensson, Mikael, 2007. "Cognitive Ability and Scale Bias in the Contingent Valuation Method," Working Papers 2007:1, Swedish National Road & Transport Research Institute (VTI). [Downloadable!]
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