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Certainty calibration in contingent valuation - exploring the within-difference between dichotomous choice and open-ended answers as a certainty measure

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  • Sund, Björn

    (Department of Business, Economics, Statistics and Informatics)

Abstract

Hypothetical bias is a serious problem of stated preference techniques. The certainty approach calibrates answers by assessing different weights to remedy respondents’ valuation. However, very little research has been done to find a link between economic theory and empirical treatment of uncertainty through certainty calibration. We use a combination of dichotomous choice (DC) followed by an open-ended (OE) question to examine the relation between the degree of confidence and the distance between the DC bid and the OE answer. The results show that the OE bid difference is significantly correlated to the certainty level in one of our two contingent valuation (CV) surveys, with the probability of stating the highest confidence value increasing between 5-19 percent per SEK 1000 (~$170/€106) that the answer to the OE question and the bid differ. The second CV survey shows a significant relation for the no-responders.

Suggested Citation

  • Sund, Björn, 2009. "Certainty calibration in contingent valuation - exploring the within-difference between dichotomous choice and open-ended answers as a certainty measure," Working Papers 2009:1, Örebro University, School of Business.
    • Handle: RePEc:hhs:oruesi:2009_001
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    Cited by:

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    2. Lars Hultkrantz & Selen Savsin, 2018. "Is ‘referencing’ a remedy to hypothetical bias in value of time elicitation? Evidence from economic experiments," Transportation, Springer, vol. 45(6), pages 1827-1847, November.
    3. Nikita Lyssenko & Roberto Mart󹑺-Espiñeira, 2012. "Respondent uncertainty in contingent valuation: the case of whale conservation in Newfoundland and Labrador," Applied Economics, Taylor & Francis Journals, vol. 44(15), pages 1911-1930, May.
    4. Hultkrantz, Lars & Shengcong, Xue, 2009. "Mitigating Hypothetical Bias in Value of Time Studies: Lab-Experiment Results," Working Papers 2009:14, Örebro University, School of Business, revised 01 Nov 2010.

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    More about this item

    Keywords

    Contingent valuation; Hypothetical bias; Calibration; Certainty approach; Value of a statistical life; Traffic safety; Cardiac arrest;
    All these keywords.

    JEL classification:

    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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