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Is hypothetical bias a universal phenomenon? A multinational investigation

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  • Mariah Ehmke
  • Jayson Lusk
  • John List

Abstract

A concern with the contingent valuation method (CVM) is the finding that hypothetical and real statements of value often differ. We test whether hypothetical bias, broadly defined, is independent of location by comparing real and hypothetical votes on a dichotomous choice referendum in China, France, Indiana, Kansas, and Niger. We find significant differences in hypothetical bias across locations and reject the hypothesis that hypothetical bias is independent of location. As opposed to the typical finding reported in the literature, subjects in Niger significantly understated their willingness-to-pay in the hypothetical referendum.

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Bibliographic Info

Paper provided by The Field Experiments Website in its series Artefactual Field Experiments with number 00041.

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Date of creation: 2008
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Handle: RePEc:feb:artefa:00041

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Web page: http://www.fieldexperiments.com

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References

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  1. Richard Ready & Ståle Navrud & Brett Day & Richard Dubourg & Fernando Machado & Susana Mourato & Frank Spanninks & Maria Rodriquez, 2004. "Benefit Transfer in Europe: How Reliable Are Transfers between Countries?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 29(1), pages 67-82, September.
  2. John A. List, 2003. "Neoclassical Theory Versus Prospect Theory: Evidence from the Marketplace," NBER Working Papers 9736, National Bureau of Economic Research, Inc.
  3. Ian Bateman & Roy Brouwer & Stavros Georgiou & Nick Hanley & Fernando Machado & Susana Mourato & Caroline Saunders, 2005. "A ‘Natural Experiment’ Approach to Contingent Valuation of Private and Public UV Health Risk Reduction Strategies in Low and High Risk Countries," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 31(1), pages 47-72, 05.
  4. Vernon L. Smith, 2003. "Constructivist and Ecological Rationality in Economics," American Economic Review, American Economic Association, American Economic Association, vol. 93(3), pages 465-508, June.
  5. Johannesson, Magnus, et al, 1999. "Calibrating Hypothetical Willingness to Pay Responses," Journal of Risk and Uncertainty, Springer, Springer, vol. 18(1), pages 21-32, April.
  6. John List & Craig Gallet, 2001. "What Experimental Protocol Influence Disparities Between Actual and Hypothetical Stated Values?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 20(3), pages 241-254, November.
  7. Patricia Champ & Richard Bishop, 2001. "Donation Payment Mechanisms and Contingent Valuation: An Empirical Study of Hypothetical Bias," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 19(4), pages 383-402, August.
  8. Carson, Richard T & Groves, Theodore, 2010. "Incentive and Information Properties of Preference Questions," University of California at San Diego, Economics Working Paper Series, Department of Economics, UC San Diego qt88d8644g, Department of Economics, UC San Diego.
  9. Brouwer, Roy & Bateman, Ian J., 2005. "Benefits transfer of willingness to pay estimates and functions for health-risk reductions: a cross-country study," Journal of Health Economics, Elsevier, Elsevier, vol. 24(3), pages 591-611, May.
  10. Ready, Richard & Navrud, Stale, 2006. "International benefit transfer: Methods and validity tests," Ecological Economics, Elsevier, Elsevier, vol. 60(2), pages 429-434, December.
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Citations

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Cited by:
  1. 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.
  2. Fredrik Carlsson & Mitesh Kataria & Alan Krupnick & Elina Lampi & Asa Löfgren & Ping Qin & Thomas Sterner & Susie Chung, 2010. "The Truth, the Whole Truth, and Nothing but the Truth A Multiple Country Test of an Oath Script," Jena Economic Research Papers 2010-076, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  3. Nicolas Jacquemet & Robert-Vincent Joule & Stephane Luchini & Jason Shogren, 2010. "Do people always pay less than they say? Testbed laboratory experiments with IV and HG values," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00443668, HAL.
  4. Jacquemet, Nicolas & Joule, Robert-Vincent & Luchini, Stéphane & Shogren, Jason F., 2013. "Preference elicitation under oath," Journal of Environmental Economics and Management, Elsevier, vol. 65(1), pages 110-132.
  5. Caplan, Arthur J. & Aadland, David & Macharia, Anthony, 2010. "Estimating Hypothetical Bias in Economically Emergent Africa: A Generic Public Good Experiment," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, Northeastern Agricultural and Resource Economics Association, vol. 39(2), April.
  6. repec:hal:wpaper:halshs-00277282 is not listed on IDEAS
  7. Lindhjem, Henrik & Navrud, Ståle, 2010. "Can cheap panel-based internet surveys substitute costly in-person interviews in CV surveys?," MPRA Paper 24069, University Library of Munich, Germany.
  8. repec:hal:journl:halshs-00396721 is not listed on IDEAS
  9. repec:ner:dauphi:urn:hdl:123456789/9717 is not listed on IDEAS
  10. Nicolas Jacquemet & Robert-Vincent Joule & Stephane Luchini & Jason Shogren, 2013. "Preference Elicitation under Oath," PSE - Labex "OSE-Ouvrir la Science Economique", HAL halshs-00731244, HAL.
  11. Lindhjem, Henrik & Navrud, Ståle, 2011. "Are Internet surveys an alternative to face-to-face interviews in contingent valuation?," Ecological Economics, Elsevier, Elsevier, vol. 70(9), pages 1628-1637, July.
  12. repec:hal:cesptp:halshs-00731244 is not listed on IDEAS

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