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Testing hypothetical bias in a framed field experiment

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  • Roy Brouwer
  • Solomon Tarfasa

Abstract

Hypothetical bias is tested based on inter‐ and intra‐respondent comparisons of choice behavior, applying a hypothetical and real choice experiment. The inter‐respondent comparison commonly applied in the environmental and agricultural economics literature consists of a control group of buyers who are asked to hypothetically choose between conventional and organic beans and an experimental group of buyers who are endowed to purchase the same beans using an identical experimental design. Hypothetical bias is tested by comparing inter‐ and intra‐respondents’ (i) hypothetical and real choices, (ii) preference parameters of the estimated choice models related to hypothetical and real choices, and (iii) hypothetical and real willingness to pay (WTP). Choices in the experimental group are highly consistent when switching from hypothetical to real choices for this study's homegrown goods. However, after being endowed, the price sensitivity of lower income households drops, suggesting a house money effect. WTP derived from actual purchases is higher than WTP based on hypothetical choices, indicating a negative hypothetical bias, but differences are only significant in the case of the inter‐respondent comparison. Actual prices paid by respondents in the field experiment appear to be considerably lower than the estimated WTP values and yield a mixed picture of hypothetical bias. Le biais hypothétique est testé sur la base de comparaisons inter et intra‐répondants du comportement de choix, en appliquant une expérience de choix hypothétique et réelle. La comparaison entre les répondants couramment appliquée dans la littérature en économie environnementale et agricole consiste en un groupe témoin d'acheteurs à qui l'on demande de choisir hypothétiquement entre les fèves conventionnelles et biologiques et un groupe expérimental d'acheteurs qui reçoivent une allocation pour acheter les mêmes haricots en utilisant un design expérimental identique. Le biais hypothétique est testé en comparant les choix inter et intra‐répondants (i) hypothétiques et réels, (ii) les paramètres de préférence des modèles de choix estimés liés aux choix hypothétiques et réels, et (iii) la volonté hypothétique et réelle de payer (CAP). Les choix du groupe expérimental sont très cohérents lors du passage de choix hypothétiques à des choix réels pour les produits locaux de cette étude. Cependant, après avoir reçu leur allocation, la sensibilité aux prix des ménages à faible revenu diminue, ce qui suggère un effet « argent maison ». Le CAP calculé à partir des achats réels est supérieur au CAP basé sur des choix hypothétiques, indiquant un biais hypothétique négatif, mais les différences ne sont significatives que dans le cas de la comparaison entre les inter‐répondants. Les prix réels payés par les répondants dans l'expérience de terrain semblent être considérablement inférieurs aux valeurs estimées du CAP et donnent une image mitigée de biais hypothétique.

Suggested Citation

  • Roy Brouwer & Solomon Tarfasa, 2020. "Testing hypothetical bias in a framed field experiment," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 68(3), pages 343-357, September.
  • Handle: RePEc:bla:canjag:v:68:y:2020:i:3:p:343-357
    DOI: 10.1111/cjag.12224
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    File URL: https://doi.org/10.1111/cjag.12224
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