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

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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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Bibliographic Info

Paper provided by University of Canterbury, Department of Economics and Finance 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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Related research

Keywords: Order effects; exclusive list; warm glow; contingent valuation;

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References

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Citations

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Cited by:
  1. Andrea Isoni & Graham Loomes & Robert Sugden, 2009. "The willingness to pay-willingness to accept gap, the "endowment effect," subject misconceptions, and experiemntal procedures for eliciting valuations: A reassessment," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 09-14, School of Economics, University of East Anglia, Norwich, UK..
  2. Jacobsen, Jette Bredahl & Lundhede, Thomas Hedemark & Martinsen, Louise & Hasler, Berit & Thorsen, Bo Jellesmark, 2011. "Embedding effects in choice experiment valuations of environmental preservation projects," Ecological Economics, Elsevier, vol. 70(6), pages 1170-1177, April.
  3. Day, Brett & Pinto Prades, Jose-Luis, 2010. "Ordering anomalies in choice experiments," Journal of Environmental Economics and Management, Elsevier, vol. 59(3), pages 271-285, May.
  4. Lienhoop, Nele & Ansmann, Till, 2011. "Valuing water level changes in reservoirs using two stated preference approaches: An exploration of validity," Ecological Economics, Elsevier, vol. 70(7), pages 1250-1258, May.
  5. Grösche, Peter & Schröder, Carsten, 2010. "Elicting public support for greening the electricity mix using random parameter techniques," Economics Working Papers 2010,02, Christian-Albrechts-University of Kiel, Department of Economics.
  6. Jeremiah Hurley & Emmanouil Mentzakis, 2011. "Existence and Magnitude of Health-related Externalities: Evidence from a Choice Experiment," Department of Economics Working Papers 2011-01, McMaster University.
  7. Andersson, Henrik & Svensson, Mikael, 2006. "Cognitive Ability and Scale Bias in the Contingent Valuation Method," Working Papers 2006:2, Swedish National Road & Transport Research Institute (VTI).
  8. Mark A. Andor & Manuel Frondel & Colin Vance, 2014. "Diskussionspapier: Zahlungsbereitschaft für grünen Strom – Die Kluft zwischen Wunsch und Wirklichkeit," RWI Materialien, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, pages 27, 05.
  9. Cai, Beilei & Cameron, Trudy Ann & Gerdes, Geoffrey R., 2011. "Distal order effects in stated preference surveys," Ecological Economics, Elsevier, vol. 70(6), pages 1101-1108, April.
  10. Kim, GwanSeon & Petrolia, Daniel R. & Interis, Matthew G., 2012. "A Method for Improving Welfare Estimates from Multiple-Referendum Surveys," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 37(2), August.
  11. Mark Andor & Manuel Frondel & Colin Vance, 2014. "Mitigating Hypothetical Bias – Evidence on the Effects of Correctives from a Large Field Study," Ruhr Economic Papers 0480, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  12. Day, Brett & Bateman, Ian J. & Carson, Richard T. & Dupont, Diane & Louviere, Jordan J. & Morimoto, Sanae & Scarpa, Riccardo & Wang, Paul, 2012. "Ordering effects and choice set awareness in repeat-response stated preference studies," Journal of Environmental Economics and Management, Elsevier, vol. 63(1), pages 73-91.

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