Do Experience and Cheap Talk influence Willingness to Pay in an Open-Ended Contingent Valuation Survey?
AbstractIn this paper we analyze the effect of information on respondents’ willingness to pay to avoid power outages in Sweden, by employing an open-ended contingent valuation survey.Two aspects of information are tested; (i) if increased experience from power outages manifested by one of the worst hurricanes ever in Sweden with long power outages as a result and (ii) if a cheap talk script affect the respondents’ WTP. The results indicate that experience increases the proportion of respondents with a zero WTP significantly, which is consistent with the view presented in media in the backwash of the hurricane stressing the right to access power without outages. On the other hand, the cheap talk script decreased the proportion of respondents with zero WTP. In both cases, however, there is no significant effect on the stated WTP conditional on reporting a positive WTP. Thus,information seems to affect the proportion of respondents with a zero WTP, and implications of this on future applications of open-ended contingent valuation surveys are discussed.
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Bibliographic InfoPaper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 190.
Length: 18 pages
Date of creation: 19 Jan 2006
Date of revision:
Publication status: Published as Carlsson, Fredrik and Peter Martinsson, 'Do Experience and Cheap Talk influence Willingness to Pay in an Open-Ended Contingent Valuation Survey? New title (when published): The effect of power outages and cheap talk on willingness to pay to reduce outages' in Energy Economics, 2011, pages 790-798.
Note: Published with new title "The effect of power outages and cheap talk on willingness to pay to reduce outages" in Energy Economics, 2011, Vol. 33, pp. 790-798.
Contact details of provider:
Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
More information through EDIRC
Contingent Valuation; Cheap talk; Information; Power outages;
Find related papers by JEL classification:
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-01-24 (All new papers)
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