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Demand effects in stated preference surveys

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Listed:
  • Carlsson, Fredrik
  • Kataria, Mitesh
  • Lampi, Elina

Abstract

We argue that demand effects in stated preference studies are understudied. By demand effects, we mean anything in the survey that unintentionally influences respondents' beliefs about appropriate behavior, which in turn might affect their responses in the survey. We implement two methods for measuring and implicitly reducing the influence of demand effects. The first approach—random selection of good to be valued—does not have any effect on respondent behavior. The second approach—a demand script and a control question with feedback—has a sizable and statistically significant effect on respondent behavior. In particular, estimated marginal willingness to pay for improvements in water quality are substantially (around 50 percent) lower than a control treatment; we attribute this decrease to a reduced demand effect. Our results suggest that stated preference methods tend to lead to biased willingness-to-pay estimates due to demand effects, but that the bias can be reduced using simple measures.

Suggested Citation

  • Carlsson, Fredrik & Kataria, Mitesh & Lampi, Elina, 2018. "Demand effects in stated preference surveys," Journal of Environmental Economics and Management, Elsevier, vol. 90(C), pages 294-302.
  • Handle: RePEc:eee:jeeman:v:90:y:2018:i:c:p:294-302
    DOI: 10.1016/j.jeem.2018.06.003
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    References listed on IDEAS

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    1. Christian A. Vossler & Maurice Doyon & Daniel Rondeau, 2012. "Truth in Consequentiality: Theory and Field Evidence on Discrete Choice Experiments," American Economic Journal: Microeconomics, American Economic Association, vol. 4(4), pages 145-171, November.
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    More about this item

    Keywords

    Demand effect; Stated preferences;

    JEL classification:

    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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