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A Comparison of Approaches to Mitigate Hypothetical Bias

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  • Champ, Patricia A.
  • Moore, Rebecca
  • Bishop, Richard C.

Abstract

We compare two approaches to mitigating hypothetical bias. The study design includes three treatments: an actual payment treatment, a contingent valuation (CV) treatment with a follow-up certainty question, and a CV treatment with a cheap talk script. Our results suggest that both the follow-up certainty treatment and the cheap talk treatment produce willingness-to-pay (WTP) estimates consistent with the actual payment treatment. However, the follow-up certainty treatment provides response distributions at all offer amounts that are statistically similar to the actual payment treatment, while the cheap talk treatment provides similar responses only at some offer amounts. Furthermore, the cheap talk treatment is effective only for inexperienced individuals. We conclude that the follow-up certainty approach is more consistent than the cheap talk approach for eliminating hypothetical bias.

Suggested Citation

  • Champ, Patricia A. & Moore, Rebecca & Bishop, Richard C., 2009. "A Comparison of Approaches to Mitigate Hypothetical Bias," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 38(2), pages 1-15, October.
    • Handle: RePEc:ags:arerjl:55867
    DOI: 10.22004/ag.econ.55867
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    References listed on IDEAS

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    1. Aadland, David & Caplan, Arthur J., 2006. "Cheap talk reconsidered: New evidence from CVM," Journal of Economic Behavior & Organization, Elsevier, vol. 60(4), pages 562-578, August.
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