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Reducing Status Quo Bias in Choice Experiments – An Application of a Protest Reduction Entreaty

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Author Info

  • Ole Bonnichsen

    ()
    (Institute of Food and Resource Economics, University of Copenhagen)

  • Jacob Ladenburg

    ()
    (Danish Institute of Governmental Research)

Abstract

In stated preference literature, the tendency to choose the alternative representing the status quo situation seems to exceed real life status quo effects. Accordingly, status quo bias can be a problem. In Choice Experiments, status quo bias is found to be strongly correlated with protest attitudes toward the cost attribute. If economic values are to be elicited, this problem is difficult to remedy. In a split sample framework we test a novel ex-ante entreaty aimed specifically at the cost attribute and find that it effectively reduces status quo bias and improves the internal validity of the hypothetical preferences.

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File URL: http://okonomi.foi.dk/workingpapers/WPpdf/WP2010/WP_2010_07_reducing_status_quo_bias.pdf
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Bibliographic Info

Paper provided by University of Copenhagen, Department of Food and Resource Economics in its series IFRO Working Paper with number 2010/7.

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Length: 22 pages
Date of creation: Jun 2010
Date of revision:
Handle: RePEc:foi:wpaper:2010_07

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Web page: http://www.ifro.ku.dk/
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Related research

Keywords: Choice Experiment; Status Quo Bias; Entreaty; Stated Preference;

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References

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  1. Fredrik Carlsson & Peter Martinsson, 2008. "How Much is Too Much?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 40(2), pages 165-176, June.
  2. Andreoni, James & Vesterlund, Lise, 2001. "Which is the Fair Sex? Gender Differences in Altruism," Staff General Research Papers 1951, Iowa State University, Department of Economics.
  3. Ladenburg, Jacob & Olsen, Søren Bøye, 2008. "Gender-specific starting point bias in choice experiments: Evidence from an empirical study," Journal of Environmental Economics and Management, Elsevier, vol. 56(3), pages 275-285, November.
  4. Carlsson, Fredrik & García, Jorge H. & Löfgren, Åsa, 2008. "Conformity and the demand for environmental goods," Working Papers in Economics 286, University of Gothenburg, Department of Economics.
  5. Jayson L. Lusk & Ted C. Schroeder, 2004. "Are Choice Experiments Incentive Compatible? A Test with Quality Differentiated Beef Steaks," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(2), pages 467-482.
  6. Jürgen Meyerhoff & Ulf Liebe, 2009. "Status Quo Effect in Choice Experiments: Empirical Evidence on Attitudes and Choice Task Complexity," Land Economics, University of Wisconsin Press, vol. 85(3), pages 515-528.
  7. Adamowicz, Wiktor L. & Boxall, Peter C. & Williams, Michael & Louviere, Jordan, 1995. "Stated Preference Approaches for Measuring Passive Use Values: Choice Experiments versus Contingent Valuation," Staff Paper Series 24126, University of Alberta, Department of Resource Economics and Environmental Sociology.
  8. Jacob Ladenburg & Jens Olav Dahlgaard & Ole Bonnichsen, 2010. "Testing the Effect of a Short Cheap Talk Script in Choice Experiments," IFRO Working Paper 2010/11, University of Copenhagen, Department of Food and Resource Economics.
  9. Steven D. Levitt & John A. List, 2007. "What Do Laboratory Experiments Measuring Social Preferences Reveal About the Real World?," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 153-174, Spring.
  10. Carlsson, Fredrik & Martinsson, Peter, 2001. "Do Hypothetical and Actual Marginal Willingness to Pay Differ in Choice Experiments?: Application to the Valuation of the Environment," Journal of Environmental Economics and Management, Elsevier, vol. 41(2), pages 179-192, March.
  11. Peter Boxall & W. L. (Vic) Adamowicz & Amanda Moon, 2009. "Complexity in choice experiments: choice of the status quo alternative and implications for welfare measurement ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(4), pages 503-519, October.
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Cited by:
  1. Marija Bockarjova & Piet Rietveld & Erik T. Verhoef, 2012. "Composite Valuation of Immaterial Damage in Flooding: Value of Statistical Life, Value of Statistical Evacuation and Value of Statistical Injury," Tinbergen Institute Discussion Papers 12-047/3, Tinbergen Institute.

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