Cognitive Ability and Scale Bias in the Contingent Valuation Method - An Analysis of Willingness to Pay to Reduce Mortality Risks
AbstractThis study investigates whether or not the scale bias found in contingent valuation (CVM) studies on mortality risk reductions is a result of cognitive restraints among respondents. Scale bias refers to insensitivity and non near-proportionality of the respondents' willingness to pay (WTP) to the size of the risk reduction. Two hundred Swedish students participated in an experiment where their cognitive ability was tested before they took part in a CVM-study where they were asked about their WTP to reduce bus-mortality risk. The results imply that WTP answers from respondents with a higher cognitive ability are less flawed by scale bias.
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Bibliographic InfoPaper provided by Örebro University, School of Business in its series Working Papers with number 2006:7.
Length: 28 pages
Date of creation: 26 Oct 2006
Date of revision: 12 Feb 2007
Publication status: Published in Environmental and Resource Economics, 2006, pages 481-495.
Contact details of provider:
Postal: Örebro University School of Business, SE - 701 82 ÖREBRO, Sweden
Phone: 019-30 30 00
Fax: 019-33 25 46
Web page: http://www.oru.se/Institutioner/Handelshogskolan-vid-Orebro-universitet/
More information through EDIRC
Cognitive Ability; Contingent Valuation; Mortality Risk; Near-Proportionality; Scale Bias;
Find related papers by JEL classification:
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
- I10 - Health, Education, and Welfare - - Health - - - General
- Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-11-04 (All new papers)
- NEP-CBE-2006-11-04 (Cognitive & Behavioural Economics)
- NEP-HEA-2006-11-04 (Health Economics)
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