IDEAS home Printed from https://ideas.repec.org/a/bla/jageco/v48y1997i1-3p123-137.html
   My bibliography  Save this article

Real And Hypothetical Willingness To Pay For Environmental Preservation: A Non‐Experimental Comparison

Author

Listed:
  • Vivien Foster
  • Ian J. Bateman
  • David Harley

Abstract

The contingent valuation method is often criticised for being grounded in a hypothetical market in which respondents are not actually required to make the contributions they claim to be willing to pay. This paper undertakes a non‐experimental comparison of real and hypothetical donations towards the public good of environmental preservation, based on a carefully defined theoretical framework. Evidence is presented which suggests that the mean hypothetical payment obtained from an open‐ended CV mail survey is likely to be at least four times as high as the real payments that would be collected from a comparable charitable appeal. In addition, it is found that in a hypothetical context people are less likely to opt out of making a donation ‐ however, the donations which are made are on average no larger than those that could be expected in a real payment context. The implication is tentatively that the primary effect of the hypothetical context may be to reduce the extent of extreme free‐riding, as opposed to creating incentives for strategic over‐bidding. These results are subject to a number of significant empirical limitations.

Suggested Citation

  • Vivien Foster & Ian J. Bateman & David Harley, 1997. "Real And Hypothetical Willingness To Pay For Environmental Preservation: A Non‐Experimental Comparison," Journal of Agricultural Economics, Wiley Blackwell, vol. 48(1‐3), pages 123-137, January.
  • Handle: RePEc:bla:jageco:v:48:y:1997:i:1-3:p:123-137
    DOI: 10.1111/j.1477-9552.1997.tb01140.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1477-9552.1997.tb01140.x
    Download Restriction: no

    References listed on IDEAS

    as
    1. Bohm, Peter, 1972. "Estimating demand for public goods: An experiment," European Economic Review, Elsevier, vol. 3(2), pages 111-130.
    2. Spash, Clive L. & Hanley, Nick, 1995. "Preferences, information and biodiversity preservation," Ecological Economics, Elsevier, vol. 12(3), pages 191-208, March.
    3. Kalle Seip & Jon Strand, 1992. "Willingness to pay for environmental goods in Norway: A contingent valuation study with real payment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 2(1), pages 91-106, January.
    4. Nick Hanley & Clive L. Spash, 1993. "Cost–Benefit Analysis and the Environment," Books, Edward Elgar Publishing, number 205.
    5. Jack A. Sinden, 1988. "Empirical Tests Of Hypothetical Bias In Consumers' Surplus Surveys," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 32(2-3), pages 98-112, 08-12.
    6. 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.
    7. Helen R. Neill & Ronald G. Cummings & Philip T. Ganderton & Glenn W. Harrison & Thomas McGuckin, 1994. "Hypothetical Surveys and Real Economic Commitments," Land Economics, University of Wisconsin Press, vol. 70(2), pages 145-154.
    8. Kahneman, Daniel & Knetsch, Jack L., 1992. "Valuing public goods: The purchase of moral satisfaction," Journal of Environmental Economics and Management, Elsevier, vol. 22(1), pages 57-70, January.
    9. Mary Jo Kealy & John F. Dovidio & Mark L. Rockel, 1988. "Accuracy in Valuation Is a Matter of Degree," Land Economics, University of Wisconsin Press, vol. 64(2), pages 158-171.
    10. Cummings, Ronald G & Harrison, Glenn W & Rutstrom, E Elisabet, 1995. "Homegrown Values and Hypothetical Surveys: Is the Dichotomous Choice Approach Incentive-Compatible?," American Economic Review, American Economic Association, vol. 85(1), pages 260-266, March.
    11. Hanley, Nick & Craig, Stephen, 1991. "Wilderness development decisions and the Krutilla-Fisher model: The case of Scotland's 'flow country'," Ecological Economics, Elsevier, vol. 4(2), pages 145-164, November.
    12. Hoehn, John P. & Randall, Alan, 1987. "A satisfactory benefit cost indicator from contingent valuation," Journal of Environmental Economics and Management, Elsevier, vol. 14(3), pages 226-247, September.
    13. Thomas C. Brown & Patricia A. Champ & Richard C. Bishop & Daniel W. McCollum, 1996. "Which Response Format Reveals the Truth about Donations to a Public Good?," Land Economics, University of Wisconsin Press, vol. 72(2), pages 152-166.
    14. William D. Schulze & Ralph C. d'Arge & David S. Brookshire, 1981. "Valuing Environmental Commodities: Some Recent Experiments," Land Economics, University of Wisconsin Press, vol. 57(2), pages 151-172.
    15. Bergstrom, John C. & Stoll, John R., 1989. "Application Of Experimentatal Economics Concepts And Precepts To Cvm Field Survey Procedures," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 14(1), pages 1-12, July.
    16. 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).
    17. Peter Bohm, 1972. "Estimating the demand for public goods: An experiment," Framed Field Experiments 00126, The Field Experiments Website.
    18. Peter A. Diamond & Jerry A. Hausman, 1994. "Contingent Valuation: Is Some Number Better than No Number?," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 45-64, Fall.
    19. Langford, Ian H. & Bateman, Ian J., 1996. "Elicitation and truncation effects in contingent valuation studies," Ecological Economics, Elsevier, vol. 19(3), pages 265-267, December.
    20. Nick Hanley & Alistair Munro, "undated". "The Effects of Information in Contingent Markets for Enviromental Goods," Working Papers Series e94/5, University of Stirling, Division of Economics.
    21. 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.
    Full references (including those not matched with items on IDEAS)

    More about this item

    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:bla:jageco:v:48:y:1997:i:1-3:p:123-137. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley Content Delivery). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0021-857X .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.