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Cognitive Ability and Scale Bias in the Contingent Valuation Method

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Author Info
Andersson, Henrik () (VTI)
Svensson, Mikael () (Örebro University)

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Abstract

This study investigates whether or not the scale bias found in contingent valuation (CVM) studies on mortality risk reductions is a result of cognitive constraints 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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Publisher Info
Paper provided by Swedish National Road & Transport Research Institute (VTI) in its series Working Papers with number 2006:2.

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Length: 31 pages
Date of creation: 15 May 2006
Date of revision:
Publication status: Published in Environmental and Resource Economics, 2008, pages 481-495.
Handle: RePEc:hhs:vtiwps:2006_002

Note: This paper has been revised and has been replaced by Working Paper 2007:1.
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Postal: VTI, Transport Economics, P.O. Box 6056, SE-171 06 Solna, Sweden
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Related research
Keywords: Cognitive Ability; Contingent Valuation; Mortality Risk; Near-proportionality; Scale Bias;

Other versions of this item:

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

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References listed on IDEAS
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Henrik Andersson & Mikael Svensson, 2008. "Cognitive ability and scale bias in the contingent valuation method," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 39(4), pages 481-495, April. [Downloadable!] (restricted)
    Other versions:
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