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Alternative value elicitation formats in contingent valuation: Mechanism design and convergent validity

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  • Vossler, Christian A.
  • Holladay, J. Scott

Abstract

To date, much of the theoretical work on the incentive properties of contingent valuation surveys has focused on the oft-recommended single binary choice (SBC), referendum format. This work has identified conditions under which an SBC elicitation is incentive compatible, and empirical evidence lends support to the predictive power of the theory. Nevertheless, researchers and practitioners commonly use alternative elicitation formats, and defend their design choices based on efficiency and other criteria. In this study, we demonstrate that it is possible to identify conditions under which alternative elicitation formats are incentive compatible, using as examples open ended (OE) and payment card (PC) question formats. We then implement theory-informed value elicitations in the context of a flood control policy for New York City. We fail to reject convergent validity in mean willingness to pay when comparing the theory-driven OE format with SBC, but reject convergent validity between the theory-driven PC and SBC formats. As an informative counterfactual, we find that a “standard” OE elicitation congruent with prior work leads to significantly lower values and a lower proportion of respondents who view the elicitation as consequential.

Suggested Citation

  • Vossler, Christian A. & Holladay, J. Scott, 2018. "Alternative value elicitation formats in contingent valuation: Mechanism design and convergent validity," Journal of Public Economics, Elsevier, vol. 165(C), pages 133-145.
  • Handle: RePEc:eee:pubeco:v:165:y:2018:i:c:p:133-145
    DOI: 10.1016/j.jpubeco.2018.07.004
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Schläpfer, Felix & Getzner, Michael, 2020. "Beyond Current Guidelines: A Proposal for Bringing Behavioral Economics to the Design and Analysis of Stated Preference Surveys," Ecological Economics, Elsevier, vol. 176(C).
    2. Alix-Garcia, Jennifer M. & Sims, Katharine R.E. & Phaneuf, Daniel J., 2019. "Using referenda to improve targeting and decrease costs of conditional cash transfers," Journal of Public Economics, Elsevier, vol. 176(C), pages 179-194.
    3. Zawojska, Ewa & Bartczak, Anna & Czajkowski, Mikołaj, 2019. "Disentangling the effects of policy and payment consequentiality and risk attitudes on stated preferences," Journal of Environmental Economics and Management, Elsevier, vol. 93(C), pages 63-84.
    4. Christian A. Vossler & Stéphane Bergeron & Maurice Doyon & Daniel Rondeau, 2020. "Revisiting the Gap Between the Willingness-to-Pay and Willingness-to-Accept for Public Goods," CIRANO Working Papers 2020s-48, CIRANO.
    5. Tobias Börger & Tenaw G. Abate & Margrethe Aanesen & Ewa Zawojska, 2020. "Payment and policy consequentiality in dichotomous choice contingent valuation: Experimental design effects on self-reported perceptions," Working Papers 2020-05, Faculty of Economic Sciences, University of Warsaw.
    6. Gutierrez, Ana L. & Penn, Jerrod & Tanger, Shaun & Blazier, Michael, 2020. "Conservation Easement Landowners’ WTA Compensation to Thin their Forest," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304551, Agricultural and Applied Economics Association.
    7. Andor, Mark Andreas & Frondel, Manuel & Horvath, Marco, 2020. "Consequentiality, elicitation formats, and the willingness-to-pay for green electricity: Evidence from Germany," Ruhr Economic Papers 841, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    8. Balmford, Ben & Bateman, Ian J. & Bolt, Katherine & Day, Brett & Ferrini, Silvia, 2019. "The value of statistical life for adults and children: Comparisons of the contingent valuation and chained approaches," Resource and Energy Economics, Elsevier, vol. 57(C), pages 68-84.
    9. Merk, Christine & Rehdanz, Katrin & Schröder, Carsten, 2019. "How consumers trade off supply security and green electricity: Evidence from Germany and Great Britain," Energy Economics, Elsevier, vol. 84(S1).
    10. Needham, Katherine & Czajkowski, Mikołaj & Hanley, Nick & LaRiviere, Jacob, 2018. "What is the causal impact of information and knowledge in stated preference studies?," Resource and Energy Economics, Elsevier, vol. 54(C), pages 69-89.
    11. Gordillo, Fernando & Elsasser, Peter & Günter, Sven, 2019. "Willingness to pay for forest conservation in Ecuador: Results from a nationwide contingent valuation survey in a combined “referendum” – “Consequential open-ended” design," Forest Policy and Economics, Elsevier, vol. 105(C), pages 28-39.

    More about this item

    Keywords

    Contingent valuation; Mechanism design; Field experiment; Flood protection;

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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