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Heterogeneous anchoring in dichotomous choice valuation framework

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Author Info

  • Emmanuel FLACHAIRE

    (Paris School of Economics, University of Paris 1)

  • Guillaume HOLLARD

    (Paris School of Economics, University of Paris 1, CNRS)

  • Stéphane LUCHINI

    (Greqam-Idep-CNRS)

Abstract

This article addresses the important issue of anchoring in contingent valuation surveys that use the double-bounded elicitation format. Anchoring occurs when responses to the follow-up dichotomous choice valuation question are influenced by the bid presented in the initial dichotomous choice question. Specifîcally, we adapt a theory from psychology to characterize respondents as those who are likely to anchor and those who are not. Using a model developed by Herriges and Shogren (1996). Our method appears successful in discriminating between those who anchor and those who did not. An important resuit is that when controlling for anchoring - and allowing the degree of anchoring to differ between respondent groups - the efficiency of the double-bounded welfare estimate is greater than for the initial dichotomous choice question. This contrasts with earlier research that finds that the potential efficiency gain from the double-bounded questions is lost when anchoring is controlled for and that we are better off not asking follow-up questions

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Bibliographic Info

Paper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (REL - Recherches Economiques de Louvain) with number 2007042.

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Length: 18
Date of creation: 01 Dec 2007
Date of revision:
Handle: RePEc:ctl:louvre:2007042

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Keywords: Anchoring; contingent valuation; heterogeneity; framing effects;

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References

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  1. Herriges, Joseph A. & Shogren, Jason F., 1996. "Starting Point Bias in Dichotomous Choice Valuation with Follow-Up Questioning," Staff General Research Papers 1501, Iowa State University, Department of Economics.
  2. Smith, V. Kerry, 1985. "Some Issues In Discrete Response Contingent Valuation Studies," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 14(1), April.
  3. John List, 2004. "Neoclassical theory versus prospect theory: Evidence from the marketplace," Framed Field Experiments 00174, The Field Experiments Website.
  4. Grether, David M, 1980. "Bayes Rule as a Descriptive Model: The Representativeness Heuristic," The Quarterly Journal of Economics, MIT Press, vol. 95(3), pages 537-57, November.
  5. Viaud, Jean & Roland-Levy, Christine, 2000. "A positional and representational analysis of consumption. Households when facing debt and credit," Journal of Economic Psychology, Elsevier, vol. 21(4), pages 411-432, August.
  6. Hanemann, W. Michael, 1985. "Some Issues In Continuous - And Discrete - Response Contingent Valuation Studies," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 14(1), April.
  7. Green, Donald & Jacowitz, Karen E. & Kahneman, Daniel & McFadden, Daniel, 1998. "Referendum contingent valuation, anchoring, and willingness to pay for public goods," Resource and Energy Economics, Elsevier, vol. 20(2), pages 85-116, June.
  8. Hollard, G. & Luchini, S., 1999. "Theories du choix social et representations: analyse d'une enquete sur le tourisme cert en Camargue," G.R.E.Q.A.M. 99b06, Universite Aix-Marseille III.
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Citations

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Cited by:
  1. Michaël Schwarzinger & Fabrice Carrat & Stéphane Luchini, 2009. ""If you have the flu symptoms, your asymptomatic spouse may better answer the willingness-to-pay question". Evidence from a double-bounded dichotomous choice model with heterogeneous anchori," Post-Print inserm-00636179, HAL.
  2. Luchini, Stéphane & Watson, Verity, 2013. "Uncertainty and framing in a valuation task," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 204-214.
  3. Nicolas Jacquemet & Alexander James & Stéphane Luchini & Jason Shogren, 2011. "Social Psychology and Environmental Economics: A New Look at ex ante Corrections of Biased Preference Evaluation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 48(3), pages 413-433, March.
  4. repec:hal:journl:halshs-00584247 is not listed on IDEAS
  5. Schwarzinger, Michaël & Carrat, Fabrice & Luchini, Stéphane, 2009. ""If you have the flu symptoms, your asymptomatic spouse may better answer the willingness-to-pay question": Evidence from a double-bounded dichotomous choice model with heterogeneous anchori," Journal of Health Economics, Elsevier, vol. 28(4), pages 873-884, July.
  6. Dominique Ami & Frédéric Aprahamian & Olivier Chanel & Stephane Luchini, 2009. "A Test Of Cheap Talk In Different Hypothetical Contexts: The Case Of Air Pollution," Working Papers halshs-00382511, HAL.
  7. repec:hal:journl:halshs-00462193 is not listed on IDEAS

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