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Bridging the gap between laboratory experiments and naturally occurring markets: An inferred valuation method

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  • Lusk, Jayson L.
  • Norwood, F. Bailey

Abstract

Several recent studies have found important differences between behavior in the laboratory and the field. We explore two possible causes for the divergence: social concerns and unfamiliarity with the traded good. Consistent with our conceptual model, we find that people overstated their preferences for relatively familiar goods with normative attributes and understated their preferences for a relatively unfamiliar good with low normative motivations in the laboratory as compared to the field. We also find that for goods with a normative dimension, a new method we refer to as inferred valuation has the potential to narrow the lab-field gap. In some cases, willingness-to-pay obtained from a conventional valuation elicitation method is more than twice the value from the new inferred valuation approach.

Suggested Citation

  • Lusk, Jayson L. & Norwood, F. Bailey, 2009. "Bridging the gap between laboratory experiments and naturally occurring markets: An inferred valuation method," Journal of Environmental Economics and Management, Elsevier, vol. 58(2), pages 236-250, September.
  • Handle: RePEc:eee:jeeman:v:58:y:2009:i:2:p:236-250
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    Cited by:

    1. Löschel, Andreas & Sturm, Bodo & Uehleke, Reinhard, 2013. "Revealed preferences for climate protection when the purely individual perspective is relaxed: Evidence from a framed field experiment," ZEW Discussion Papers 13-006, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    2. Bessler, David A., 2013. "On Agricultural Econometrics," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 45(03), August.
    3. Disdier, Anne-Célia & Marette, Stéphan & Millet, Guy, 2013. "Are consumers concerned about palm oil? Evidence from a lab experiment," Food Policy, Elsevier, vol. 43(C), pages 180-189.
    4. Grebitus, Carola & Colson, Gregory & Menapace, Luisa, 2012. "A comparison of hypothetical survey rankings with consumer shopping behavior and product knowledge," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 44(01), February.
    5. Marette Stéphan & Roosen Jutta & Blanchemanche Sandrine, 2011. "The Combination of Lab and Field Experiments for Benefit-Cost Analysis," Journal of Benefit-Cost Analysis, De Gruyter, vol. 2(3), pages 1-36, August.
    6. Löschel, Andreas & Sturm, Bodo & Uehleke, Reinhard, 2017. "Revealed preferences for voluntary climate change mitigation when the purely individual perspective is relaxed – evidence from a framed field experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 67(C), pages 149-160.
    7. Jayson Lusk & F. Norwood, 2010. "Direct Versus Indirect Questioning: An Application to the Well-Being of Farm Animals," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 96(3), pages 551-565, May.
    8. Grebitus, Carola & Colson, Gregory & Menapace, Luisa, 2012. "A comparison of hypothetical survey rankings with consumer shopping behavior and product knowledge," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 44(01), February.
    9. John A. List & Michael K. Price, 2013. "Using Field Experiments in Environmental and Resource Economics," NBER Working Papers 19289, National Bureau of Economic Research, Inc.
    10. Stachtiaris, Spiros & Drichoutis, Andreas C. & Klonaris, Stathis, 2011. "The "more is less" phenomenon in Contingent and Inferred valuation," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 116013, European Association of Agricultural Economists.
    11. Frondel, Manuel & Sommer, Stephan & Tomberg, Lukas, 2018. "Versorgungssicherheit mit Strom: Empirische Evidenz auf Basis der Inferred-Valuation-Methode," RWI Materialien 123, RWI - Leibniz-Institut für Wirtschaftsforschung.
    12. Kaczan, David & Swallow, Brent M. & Adamowicz, W.L. (Vic), 2013. "Designing a payments for ecosystem services (PES) program to reduce deforestation in Tanzania: An assessment of payment approaches," Ecological Economics, Elsevier, vol. 95(C), pages 20-30.
    13. Honda, Hidehito & Ogawa, Midori & Murakoshi, Takuma & Masuda, Tomohiro & Utsumi, Ken & Park, Sora & Kimura, Atsushi & Nei, Daisuke & Wada, Yuji, 2015. "Effect of visual aids and individual differences of cognitive traits in judgments on food safety," Food Policy, Elsevier, vol. 55(C), pages 33-40.
    14. Drichoutis, Andreas C. & Lusk, Jayson L. & Pappa, Valentina, 2016. "Elicitation formats and the WTA/WTP gap: A study of climate neutral foods," Food Policy, Elsevier, vol. 61(C), pages 141-155.
    15. Araña, Jorge E. & León, Carmelo J., 2013. "Dynamic hypothetical bias in discrete choice experiments: Evidence from measuring the impact of corporate social responsibility on consumers demand," Ecological Economics, Elsevier, vol. 87(C), pages 53-61.
    16. Guignet, Dennis, 2012. "The impacts of pollution and exposure pathways on home values: A stated preference analysis," Ecological Economics, Elsevier, vol. 82(C), pages 53-63.
    17. Jonathan E. Alevy & Craig E. Landry & John A. List, 2015. "Field Experiments On The Anchoring Of Economic Valuations," Economic Inquiry, Western Economic Association International, vol. 53(3), pages 1522-1538, July.
    18. repec:eee:ecoser:v:26:y:2017:i:pa:p:258-269 is not listed on IDEAS
    19. Nielsen, Thea, 2012. "How do Concerns about Pesticides Impact Consumer Willingness to Buy Genetically Modified French Fries in Germany? Results from a Purchasing Experiment," 2012 International European Forum, February 13-17, 2012, Innsbruck-Igls, Austria 144986, International European Forum on Innovation and System Dynamics in Food Networks.
    20. Peake, Whitney O. & Detre, Joshua D. & Carlson, Clinton C., 2014. "One bad apple spoils the bunch? An exploration of broad consumption changes in response to food recalls," Food Policy, Elsevier, vol. 49(P1), pages 13-22.
    21. Carlsson, Fredrik & Kataria, Mitesh, 2016. "How are you? How's it going? What's up? What's happening? Nudging people to tell us how they really are," Working Papers in Economics 649, University of Gothenburg, Department of Economics.
    22. Lava Yadav & Thomas M. van Rensburg & Hugh Kelley, 2013. "A Comparison Between the Conventional Stated Preference Technique and an Inferred Valuation Approach," Journal of Agricultural Economics, Wiley Blackwell, vol. 64(2), pages 405-422, June.

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