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Bid Imprecision As A Source Of Hypothetical Bias In Contingent Valuation Estimation: Analysis Of A Survey Of Respondent’S Attitudes For The Battle Of Lexington State Historic Site (Shs)

  • Azevedo, C.D.
  • Crooker, J.R.
  • Pattiz, B.

The discussion of hypothetical bias has been an important aspect of the development of stated preference non-market valuation techniques. A variety of sources of hypothetical bias have been discussed in the literature, but no research has been done on the possible bias introduced by the actual form of the bid. The possibility exists that respondents may react to bids in round dollars differently than to bids that include both dollar and cent amounts. We test whether the use of a precise versus imprecise bid design influences respondent’s willingness to pay, and show that bid imprecision does indeed introduce hypothetical bias.

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Article provided by Euro-American Association of Economic Development in its journal Regional and Sectoral Economic Studies.

Volume (Year): 12 (2012)
Issue (Month): 2 ()

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Handle: RePEc:eaa:eerese:v:12:y2012:i:2_2
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  1. John List & Craig Gallet, 2001. "What Experimental Protocol Influence Disparities Between Actual and Hypothetical Stated Values?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 20(3), pages 241-254, November.
  2. John Crooker & Joseph Herriges, 2004. "Parametric and Semi-Nonparametric Estimation of Willingness-to-Pay in the Dichotomous Choice Contingent Valuation Framework," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 27(4), pages 451-480, April.
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  7. Jason Shogren & John List, 1998. "Calibration of the difference between actual and hypothetical valuations in a field experiment," Natural Field Experiments 00296, The Field Experiments Website.
  8. Fox, John A. & Shogren, J. & Hayes, Dermot J. & Kliebenstein, James, 2003. "Cvm-X: Calibrating Contingent Values with Experimental Auction Markets," Staff General Research Papers 11935, Iowa State University, Department of Economics.
  9. Bradley Jorgensen & Geoffrey Syme & Brian Bishop & Blair Nancarrow, 1999. "Protest Responses in Contingent Valuation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 14(1), pages 131-150, July.
  10. Adamowicz, Wiktor & Dupont, Diane & Krupnick, Alan & Zhang, Jing, 2011. "Valuation of cancer and microbial disease risk reductions in municipal drinking water: An analysis of risk context using multiple valuation methods," Journal of Environmental Economics and Management, Elsevier, vol. 61(2), pages 213-226, March.
  11. Brown, Thomas C. & Ajzen, Icek & Hrubes, Daniel, 2003. "Further tests of entreaties to avoid hypothetical bias in referendum contingent valuation," Journal of Environmental Economics and Management, Elsevier, vol. 46(2), pages 353-361, September.
  12. James Murphy & Thomas Stevens & Darryl Weatherhead, 2005. "Is Cheap Talk Effective at Eliminating Hypothetical Bias in a Provision Point Mechanism?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 30(3), pages 327-343, 03.
  13. List, John A. & Margolis, Michael & Shogren, Jason F., 1998. "Hypothetical-actual bid calibration of a multigood auction," Economics Letters, Elsevier, vol. 60(3), pages 263-268, September.
  14. Cameron, Trudy Ann, 1988. "A new paradigm for valuing non-market goods using referendum data: Maximum likelihood estimation by censored logistic regression," Journal of Environmental Economics and Management, Elsevier, vol. 15(3), pages 355-379, September.
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