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Cognitive Dissonance as a Means of Reducing Hypothetical Bias

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Abstract

Hypothetical bias is a persistent problem in stated preference studies. We propose and test a method for reducing hypothetical bias based on the cognitive dissonance literature in social psychology. A central element of this literature is that people prefer not to take inconsistent stands and will change their attitudes and behavior to make them consistent. We find that participants in a stated preference willingness-to-pay study, when told that a nonhypothetical study of similar goods would follow, state significantly lower willingness to pay than participants not so informed. In other words, participants adjust their stated willingness to pay to avoid cognitive dissonance from taking inconsistent stands on their willingness to pay for the good being offered.

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Paper provided by Center for Agricultural and Rural Development (CARD) at Iowa State University in its series Center for Agricultural and Rural Development (CARD) Publications with number 09-wp486.

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Date of creation: Feb 2009
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Handle: RePEc:ias:cpaper:09-wp486

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Keywords: apples; cognitive consistency; hypothetical bias; instrument calibration; willingness to pay.;

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References

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  1. Yue, Chengyan & Alfnes, Frode & Jensen, Helen H., 2009. "Discounting Spotted Apples: Investigating Consumers’ Willingness to Accept Cosmetic Damage in an Organic Product," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, Southern Agricultural Economics Association, vol. 41(01), April.
  2. Champ, Patricia A. & Bishop, Richard C. & Brown, Thomas C. & McCollum, Daniel W., 1997. "Using Donation Mechanisms to Value Nonuse Benefits from Public Goods," Journal of Environmental Economics and Management, Elsevier, vol. 33(2), pages 151-162, June.
  3. Murphy, James J. & Stevens, Thomas H., 2004. "Contingent Valuation, Hypothetical Bias, and Experimental Economics," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, Northeastern Agricultural and Resource Economics Association, vol. 33(2), October.
  4. John List & Jason Shogren, 1998. "Calibration of the difference between actual and hypothetical valuations in a field experiment," Natural Field Experiments, The Field Experiments Website 00296, The Field Experiments Website.
  5. John A. List, 2001. "Do Explicit Warnings Eliminate the Hypothetical Bias in Elicitation Procedures? Evidence from Field Auctions for Sportscards," American Economic Review, American Economic Association, American Economic Association, vol. 91(5), pages 1498-1507, December.
  6. Jayson Lusk & T Schroeder, 2004. "Are choice experiments incentive compatible? A test with quality differentiated beef steaks," Artefactual Field Experiments, The Field Experiments Website 00096, The Field Experiments Website.
  7. Karen Blumenschein & GlennC. Blomquist & Magnus Johannesson & Nancy Horn & Patricia Freeman, 2008. "Eliciting Willingness to Pay Without Bias: Evidence from a Field Experiment," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 118(525), pages 114-137, 01.
  8. Knut Veisten & St�le Navrud, 2006. "Contingent valuation and actual payment for voluntarily provided passive-use values: Assessing the effect of an induced truth-telling mechanism and elicitation formats," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 38(7), pages 735-756.
  9. James Murphy & P. Allen & Thomas Stevens & Darryl Weatherhead, 2005. "A Meta-analysis of Hypothetical Bias in Stated Preference Valuation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 30(3), pages 313-325, 03.
  10. Fisher, Robert J, 1993. " Social Desirability Bias and the Validity of Indirect Questioning," Journal of Consumer Research, University of Chicago Press, University of Chicago Press, vol. 20(2), pages 303-15, September.
  11. Alfnes, Frode & Guttormsen, Atle G. & Steine, Gro & Kolstad, Kari, 2005. "Consumers' Willingness To Pay For The Color Of Salmon:A Choice Experiment With Real Economic Incentives," 2005 Annual meeting, July 24-27, Providence, RI, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) 19126, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  12. 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.
  13. John List & Craig Gallet, 2001. "What Experimental Protocol Influence Disparities Between Actual and Hypothetical Stated Values?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 20(3), pages 241-254, November.
  14. Lusk,Jayson L. & Shogren,Jason F., 2007. "Experimental Auctions," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521855167.
  15. Frode Alfnes, 2009. "Valuing product attributes in Vickrey auctions when market substitutes are available," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 36(2), pages 133-149, June.
  16. Christopher G. Leggett & Naomi S. Kleckner & Kevin J. Boyle & John W. Dufield & Robert Cameron Mitchell, 2003. "Social Desirability Bias in Contingent Valuation Surveys Administered Through In-Person Interviews," Land Economics, University of Wisconsin Press, vol. 79(4), pages 561-575.
  17. Gro Steine & Kari Kolstad, 2006. "Consumers' Willingness to Pay for the Color of Salmon: A Choice Experiment with Real Economic Incentives," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, Agricultural and Applied Economics Association, vol. 88(4), pages 1050-1061.
  18. Laura O. Taylor & Ronald G. Cummings, 1999. "Unbiased Value Estimates for Environmental Goods: A Cheap Talk Design for the Contingent Valuation Method," American Economic Review, American Economic Association, American Economic Association, vol. 89(3), pages 649-665, June.
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  20. Johansson-Stenman Olof & Svedsäter Henrik, 2008. "Measuring Hypothetical Bias in Choice Experiments: The Importance of Cognitive Consistency," The B.E. Journal of Economic Analysis & Policy, De Gruyter, De Gruyter, vol. 8(1), pages 1-10, September.
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Cited by:
  1. Sckokai, Paolo & Veneziani, Mario & Moro, Daniele & Castellari, Elena, 2014. "Consumer willingness to pay for food safety: the case of mycotoxins in milk," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), Italian Association of Agricultural and Applied Economics (AIEAA), issue 1, April.
  2. Moser, Riccarda & Raffaelli, Roberta & Notaro, Sandra, 2010. "The Role Of Production Methods In Fruit Purchasing Behaviour: Hypothetical Vs Actual Consumers’ Preferences And Stated Minimum Requirements," 115th Joint EAAE/AAEA Seminar, September 15-17, 2010, Freising-Weihenstephan, Germany, European Association of Agricultural Economists;Agricultural and Applied Economics Association 116426, European Association of Agricultural Economists;Agricultural and Applied Economics Association.
  3. Michaud, C. & Llerena, D. & Joly, I., 2012. "Willingness to pay for environmental attributes of non-food agricultural products: a real choice experiment," Working Papers, Grenoble Applied Economics Laboratory (GAEL) 201201, Grenoble Applied Economics Laboratory (GAEL).
  4. Kirsten, Johann F. & Vermeulen, Hester & Van Zyl, Karlien & Du Randt, Gerrie & Du Plessis, H. & Weissnar, Tessa, 2012. "The economic potential for an origin based marketing and certification system for a meat product in South Africa: Perceptions, preferences, and experiments," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil, International Association of Agricultural Economists 125764, International Association of Agricultural Economists.
  5. Krawczyk, Michał, 2012. "Testing for hypothetical bias in willingness to support a reforestation program," Journal of Forest Economics, Elsevier, Elsevier, vol. 18(4), pages 282-289.

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