IDEAS home Printed from https://ideas.repec.org/a/ags/jlaare/30849.html
   My bibliography  Save this article

Actual Versus Stated Willingness To Pay: A Comment

Author

Listed:
  • Cohen, Daniel R.
  • Zilberman, David

Abstract

Offering evidence from the California Irrigation Management Information System (CIMIS) and centering around Kenkel and Norris conclusions regarding "Agricultural Producers' Willingness to Pay for Real-Time Mesoscale Weather Information," this article questions the use of growers' hypothetical willingness-to-pay responses as the sole basis for deciding whether to invest in Mesonet, a statewide network of weather station. Survey respondents' lack of familiarity with a new technology and strategic behavior lead to underestimates of actual willingness to pay. Moreover, weather information has numerous agricultural and nonagricultural uses, and only sampling growers overlooks gains to other potential users. Low hypothetical willingness-to-pay responses of a subsection of the potential adopters should necessarily discourage investment. Rather, a substantial willingness to pay may signal a need for further market research.

Suggested Citation

  • Cohen, Daniel R. & Zilberman, David, 1997. "Actual Versus Stated Willingness To Pay: A Comment," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 22(2), pages 1-6, December.
    • Handle: RePEc:ags:jlaare:30849
    DOI: 10.22004/ag.econ.30849
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/30849/files/22020376.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.30849?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Edward K. Y. Chen, 1983. "The Diffusion of Technology," Palgrave Macmillan Books, in: Multinational Corporations, Technology and Employment, chapter 4, pages 69-93, Palgrave Macmillan.
    2. Julian M. Alston & Philip G. Pardey, 1996. "Making Science Pay: The Economics of Agricultural R&D Policy," Books, American Enterprise Institute, number 53242, September.
    3. Darrell J. Bosch & Vernon R. Eidman, 1987. "Valuing Information When Risk Preferences Are Nonneutral: An Application to Irrigation Scheduling," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(3), pages 658-668.
    4. Kenkel, Philip L. & Norris, Patricia E., 1995. "Agricultural Producers' Willingness To Pay For Real-Time Mesoscale Weather Information," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(2), pages 1-17, December.
    5. Julian M. Alston & Philip G. Pardey & Jennifer S. James & Matthew A. Anderson, 2009. "The Economics of Agricultural R&D," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 537-566, September.
    6. Bishop, Richard C. & Heberlein, Thomas A., 1979. "Measuring Values Of Extramarket Goods: Are Indirect Measures Biased?," 1979 Annual Meeting, July 29-August 1, Pullman, Washington 277818, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Robert E. Evenson, 1989. "Spillover Benefits of Agricultural Research: Evidence from U.S. Experience," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(2), pages 447-452.
    8. Richard C. Bishop & Thomas A. Heberlein, 1979. "Measuring Values of Extramarket Goods: Are Indirect Measures Biased?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(5), pages 926-930.
    9. Douglas D. Parker & David Zilberman, 1996. "The use of information services: The case of CIMIS," Agribusiness, John Wiley & Sons, Ltd., vol. 12(3), pages 209-218.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Garima Taneja & Barun Deb Pal & Pramod K. Joshi & Pramod K. Aggarwal & N. K. Tyagi, 2014. "Farmers’ Preferences for Climate-Smart Agriculture: An Assessment in the Indo-Gangetic Plain," Working Papers id:5806, eSocialSciences.
    2. Taneja, Garima & Pal, Barun Deb & Joshi, Pramod Kumar & Aggarwal, Pramod & Tyagi, N.K., 2014. "Farmers’ preferences for climate-smart agriculture an assessment in the Indo-Gangetic plain:," IFPRI discussion papers 1337, International Food Policy Research Institute (IFPRI).
    3. Levy, A., 1999. "Profit and Non-Profit Maximising Network Density, Membership Fees and Service in Monopolistic and Duopolistic Framework," Economics Working Papers wp99-2, School of Economics, University of Wollongong, NSW, Australia.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gray, Richard S. & Malla, Stavroula & Tran, Kien C., 2005. "Pecuniary, Non-Pecuniary, and Downstream Research Spillovers: The Case of Canola," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24776, European Association of Agricultural Economists.
    2. Kim, Seon-Ae & Gillespie, Jeffrey M. & Paudel, Krishna P., 2008. "Rotational grazing adoption in cattle production under a cost-share agreement: does uncertainty have a role in conservation technology adoption?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(3), pages 1-18.
    3. Ivehammar, Pernilla, 2014. "Valuing environmental quality in actual travel time savings – The Haningeleden road project in Stockholm," Research in Transportation Economics, Elsevier, vol. 48(C), pages 349-356.
    4. Eduard Marinov, 2017. "The 2017 Nobel Prize in Economics," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 117-159.
    5. Pardey, Philip G. & Alston, Julian M. & Chan-Kang, Connie & Magalhães, Eduardo C. & Vosti, Stephen A., 2002. "Assessing and attributing the benefits from varietal improvement research: evidence from Embrapa, Brazil," EPTD discussion papers 95, International Food Policy Research Institute (IFPRI).
    6. Rodríguez, Elsa Mirta M. & Lacaze, María Victoria & Lupín, Beatriz, 2007. "Willingness to pay for organic food in Argentina: evidence from a consumer survey," Nülan. Deposited Documents 1300, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    7. Committee, Nobel Prize, 2017. "Richard H. Thaler: Integrating Economics with Psychology," Nobel Prize in Economics documents 2017-1, Nobel Prize Committee.
    8. Mark A. Andor & Manuel Frondel & Colin Vance, 2017. "Mitigating Hypothetical Bias: Evidence on the Effects of Correctives from a Large Field Study," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(3), pages 777-796, November.
    9. Yoonae Jo, 2001. "Does college education nourish egoism?," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 4(2), pages 115-128, September.
    10. Pere Riera & Raúl Brey & Guillermo Gándara, 2008. "Bid design for non-parametric contingent valuation with a single bounded dichotomous choice format," Hacienda Pública Española / Review of Public Economics, IEF, vol. 186(3), pages 43-60, October.
    11. Kanya, Lucy & Sanghera, Sabina & Lewin, Alex & Fox-Rushby, Julia, 2019. "The criterion validity of willingness to pay methods: A systematic review and meta-analysis of the evidence," Social Science & Medicine, Elsevier, vol. 232(C), pages 238-261.
    12. W. Michael Hanemann, 1994. "Valuing the Environment through Contingent Valuation," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 19-43, Fall.
    13. Smith, V. Kerry & Mansfield, Carol, 1998. "Buying Time: Real and Hypothetical Offers," Journal of Environmental Economics and Management, Elsevier, vol. 36(3), pages 209-224, November.
    14. M. R. Bhatia & J. A. Fox-Rushby, 2003. "Validity of Willingness to Pay: hypothetical versus actual payment," Applied Economics Letters, Taylor & Francis Journals, vol. 10(12), pages 737-740.
    15. Lee, Juyong & Cho, Youngsang, 2020. "Estimation of the usage fee for peer-to-peer electricity trading platform: The case of South Korea," Energy Policy, Elsevier, vol. 136(C).
    16. Anthony Amoah & Peter G. Moffatt, 2021. "Willingness to pay for reliable piped water services: evidence from urban Ghana," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 23(4), pages 805-829, October.
    17. Thomas Treiman & Justine Gartner, 2006. "Are Residents Willing to Pay for their Community Forests? Results of a Contingent Valuation Survey in Missouri, USA," Urban Studies, Urban Studies Journal Limited, vol. 43(9), pages 1537-1547, August.
    18. Tokgoz, Simla, 2003. "R&D Spillovers In Agriculture: Results From A North-South Trade Model," 2003 Annual meeting, July 27-30, Montreal, Canada 22258, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    19. Rhee, Hae-Chun & Lee, Kyu-yong & Cho, Joonmo, 2005. "Liberalizing employment of foreign workers in Korea: Public perception and assessment," Journal of Policy Modeling, Elsevier, vol. 27(8), pages 971-987, November.
    20. Karen Blumenschein & Magnus Johannesson & Glenn C. Blomquist & Bengt Liljas & Richard M. O'Conor, 1998. "Experimental Results on Expressed Certainty and Hypothetical Bias in Contingent Valuation," Southern Economic Journal, John Wiley & Sons, vol. 65(1), pages 169-177, July.

    More about this item

    Keywords

    Farm Management;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:jlaare:30849. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/waeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.