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Truth in Consequentiality: Theory and Field Evidence on Discrete Choice Experiments

  • Christian A. Vossler
  • Maurice Doyon
  • Daniel Rondeau

This paper explores methodological issues surrounding the use of discrete choice experiments to elicit values for public goods. We develop an explicit game theoretic model of individual decisions, providing conditions under which surveys with a single binary choice question, or sequence of binary choice questions, are incentive-compatible. We complement the theory with a framed field experiment, with treatments that span the spectrum from incentive-compatible, financially binding decisions to decisions with no direct financial consequences. The results suggest truthful preference revelation is possible, provided that participants view their decisions as having more than a weak chance of influencing policy. (JEL C83, C93, H41, Q23)

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/mic.4.4.145
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Article provided by American Economic Association in its journal American Economic Journal: Microeconomics.

Volume (Year): 4 (2012)
Issue (Month): 4 (November)
Pages: 145-71

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Handle: RePEc:aea:aejmic:v:4:y:2012:i:4:p:145-71
Note: DOI: 10.1257/mic.4.4.145
Contact details of provider: Web page: https://www.aeaweb.org/aej-micro
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  1. Carlsson, Fredrik & Johansson-Stenman, Olof, 2010. "Scale factors and hypothetical referenda: A clarifying note," Journal of Environmental Economics and Management, Elsevier, vol. 59(3), pages 286-292, May.
  2. Messer, Kent D. & Poe, Gregory L. & Rondeau, Daniel & Schulze, William D. & Vossler, Christian A., 2010. "Social preferences and voting: An exploration using a novel preference revealing mechanism," Journal of Public Economics, Elsevier, vol. 94(3-4), pages 308-317, April.
  3. Blass, Asher & Lach, Saul & Manski, Charles, 2008. "Using Elicited Choice Probabilities to Estimate Random Utility Models: Preferences for Electricity Reliability," CEPR Discussion Papers 7030, C.E.P.R. Discussion Papers.
  4. Wiktor Adamowicz & Peter Boxall & Michael Williams & Jordan Louviere, 1998. "Stated Preference Approaches for Measuring Passive Use Values: Choice Experiments and Contingent Valuation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 64-75.
  5. Richard T. Carson & Nicholas E. Flores & Kerry M. Martin & Jennifer L. Wright, 1996. "Contingent Valuation and Revealed Preference Methodologies: Comparing the Estimates for Quasi-Public Goods," Land Economics, University of Wisconsin Press, vol. 72(1), pages 80-99.
  6. Jayson L. Lusk & Ted C. Schroeder, 2004. "Are Choice Experiments Incentive Compatible? A Test with Quality Differentiated Beef Steaks," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(2), pages 467-482.
  7. Cameron, Trudy Ann & Poe, Gregory L. & Ethier, Robert G. & Schulze, William D., 2002. "Alternative Non-market Value-Elicitation Methods: Are the Underlying Preferences the Same?," Journal of Environmental Economics and Management, Elsevier, vol. 44(3), pages 391-425, November.
  8. Beggs, S. & Cardell, S. & Hausman, J., 1981. "Assessing the potential demand for electric cars," Journal of Econometrics, Elsevier, vol. 17(1), pages 1-19, September.
  9. Nick Hanley & Robert Wright & Vic Adamowicz, 1998. "Using Choice Experiments to Value the Environment," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 11(3), pages 413-428, April.
  10. John List & Michael Taylor & Paramita Sinha, 2006. "Using choice experiments to value non-market goods and services: Evidence from field experiments," Natural Field Experiments 00278, The Field Experiments Website.
  11. M. Ruth & K. Donaghy & P. Kirshen, 2006. "Introduction," Chapters, in: Regional Climate Change and Variability, chapter 1 Edward Elgar.
  12. Richard Arena & Agnès Festré, 2006. "Introduction," Chapters, in: Knowledge, Beliefs and Economics, chapter 1 Edward Elgar.
  13. Herriges, Joseph & Kling, Catherine & Liu, Chih-Chen & Tobias, Justin, 2010. "What are the consequences of consequentiality?," Journal of Environmental Economics and Management, Elsevier, vol. 59(1), pages 67-81, January.
  14. Laura Taylor & Mark Morrison & Kevin Boyle, 2010. "Exchange Rules and the Incentive Compatibility of Choice Experiments," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 47(2), pages 197-220, October.
  15. 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, vol. 20(3), pages 241-254, November.
  16. Vossler, Christian A. & Evans, Mary F., 2009. "Bridging the gap between the field and the lab: Environmental goods, policy maker input, and consequentiality," Journal of Environmental Economics and Management, Elsevier, vol. 58(3), pages 338-345, November.
  17. Carson, Richard T & Flores, Nicholas A, 2000. "Contingent Valuation: Controversies and Evidence," University of California at San Diego, Economics Working Paper Series qt75k752s7, Department of Economics, UC San Diego.
  18. Takanori Ida & Rei Goto, 2009. "Simultaneous Measurement Of Time And Risk Preferences: Stated Preference Discrete Choice Modeling Analysis Depending On Smoking Behavior," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(4), pages 1169-1182, November.
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