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An addendum to: a meta-analysis of hypothethical bias in stated preference valuation

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  • Stefani, Gianluca
  • Scarpa, Riccardo
  • Lombardi, Ginevra V.

Abstract

A recent study published by Murphy et al. (2005) reported results of a meta-analysis of hypothetical bias using 28 valuation studies. The authors found a median ratio of hypothetical to actual values of 1.35 but they did not investigate the ratio of variances of the hypothetical and actual value distributions, which is of great relevance in joint stated and revealed preference analysis. We propose an addendum to Murphy et al. (2005) to provide some insights on the distribution of the scale factor across 23 studies for which relevant data is available. We distinguish three types of dispersion parameters reported in the literature. We find that the ratio of real to hypothetical standard deviations of marginal distributions of WTP is about 0.6.

Suggested Citation

  • Stefani, Gianluca & Scarpa, Riccardo & Lombardi, Ginevra V., 2014. "An addendum to: a meta-analysis of hypothethical bias in stated preference valuation," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 3(2), pages 1-10, August.
    • Handle: RePEc:ags:aieabj:182909
    DOI: 10.22004/ag.econ.182909
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    8. Sinden, Jack A., 1988. "Empirical Tests Of Hypothetical Bias In Consumers' Surplus Surveys," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 32(2-3), pages 1-15, August.
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    16. Blumenschein, Karen & Johannesson, Magnus & Yokoyama, Krista K. & Freeman, Patricia R., 2001. "Hypothetical versus real willingness to pay in the health care sector: results from a field experiment," Journal of Health Economics, Elsevier, vol. 20(3), pages 441-457, May.
    17. Spencer, Michael A. & Swallow, Stephen K. & Miller, Christopher J., 1998. "Valuing Water Quality Monitoring: A Contingent Valuation Experiment Involving Hypothetical and Real Payments," Agricultural and Resource Economics Review, Cambridge University Press, vol. 27(1), pages 28-42, April.
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    Cited by:

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    2. Natali, F. & Cacchiarelli, L. & Branca, G., 2022. "There are plenty more (sustainable) fish in the sea: A discrete choice experiment on discarded species in Italy," Ecological Economics, Elsevier, vol. 196(C).
    3. Cristiano Franceschinis & Riccardo Scarpa & Mara Thiene & John Rose & Michele Moretto & Raffaele Cavalli, 2016. "Exploring the Spatial Heterogeneity of Individual Preferences for Ambient Heating Systems," Energies, MDPI, vol. 9(6), pages 1-19, May.
    4. Ami, Dominique & Aprahamian, Frédéric & Chanel, Olivier & Luchini, Stéphane, 2018. "When do social cues and scientific information affect stated preferences? Insights from an experiment on air pollution," Journal of choice modelling, Elsevier, vol. 29(C), pages 33-46.

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    Keywords

    Research Methods/ Statistical Methods;

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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