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What is the causal impact of information and knowledge in stated preference studies?

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  • Needham, Katherine
  • Czajkowski, Mikołaj
  • Hanley, Nick
  • LaRiviere, Jacob

Abstract

This paper reports the results of a stated preference experiment designed to test how information about a good’s attributes provided in a survey affects knowledge, and how knowledge affects preferences for that good. A novel experimental design allows us to elicit subjects’ ex ante knowledge levels about a public good’s attributes, exogenously vary how much new objective information about these attributes we provide to subjects, elicit subjects’ valuation for the good, and elicit posterior knowledge states about the same attributes. We find evidence of incomplete learning and fatigue: as subjects are told more information, their marginal learning rates decrease. Consistent with previous work, ex ante knowledge does affect stated willingness to pay. However, we find no significant marginal impact of knowledge on the mean nor the variance of willingness to pay for changes in the environmental good conditional on ex ante knowledge. Our results are consistent with a number of conceptual models of information processing and preferences, including confirmation bias, costly search, and timing differences in learning and preference formation.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:resene:v:54:y:2018:i:c:p:69-89
    DOI: 10.1016/j.reseneeco.2018.09.001
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    Cited by:

    1. Meginnis, Keila & Hanley, Nick & Mujumbusi, Lazaaro & Lamberton, Poppy H.L., 2020. "Non-monetary numeraires: Varying the payment vehicle in a choice experiment for health interventions in Uganda," Ecological Economics, Elsevier, vol. 170(C).
    2. Mikołaj Czajkowski & Katarzyna Zagórska & Natalia Letki & Piotr Tryjanowski & Adam Wąs, 2019. "Drivers of farmers’ willingness to adopt extensive farming practices in a globally important bird area," Working Papers 2019-06, Faculty of Economic Sciences, University of Warsaw.
    3. Ouvrard, Benjamin & Abildtrup, Jens & Stenger, Anne, 2020. "Nudging Acceptability for Wood Ash Recycling in Forests: A Choice Experiment," Ecological Economics, Elsevier, vol. 177(C).
    4. Loría, Luis Enrique & Watson, Verity & Kiso, Takahiko & Phimister, Euan, 2019. "Investigating users' preferences for Low Emission Buses: Experiences from Europe's largest hydrogen bus fleet," Journal of choice modelling, Elsevier, vol. 32(C), pages 1-1.

    More about this item

    Keywords

    Learning; Information; Behavioral economics; Decision making under uncertainty;

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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