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What Experimental Protocol Influence Disparities Between Actual and Hypothetical Stated Values?

  • John List
  • Craig Gallet


Preferences elicited in hypothetical settings have recently come underscrutiny, causing estimates from the contingent valuation method to bechallenged due to perceived ``hypothetical bias.'' Given that the receivedliterature derives value estimates using heterogeneous experimentaltechniques, understanding the effects of important design parameters onthe magnitude of hypothetical bias is invaluable. In this paper, we addressthis issue statistically by using a meta-analysis to examine data from 29experimental studies. Our empirical findings suggest that on averagesubjects overstate their preferences by a factor of about 3 in hypotheticalsettings, and that the degree of over-revelation is influenced by thedistinction between willingness-to-pay and willingness-to-accept, publicversus private goods, and several elicitation methods. Copyright Kluwer Academic Publishers 2001

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Article provided by Springer & European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 20 (2001)
Issue (Month): 3 (November)
Pages: 241-254

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Handle: RePEc:kap:enreec:v:20:y:2001:i:3:p:241-254
DOI: 10.1023/A:1012791822804
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  1. Espey, Molly, 1998. "Gasoline demand revisited: an international meta-analysis of elasticities," Energy Economics, Elsevier, vol. 20(3), pages 273-295, June.
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  6. John List, 2001. "Do explicit warnings eliminate the hypothetical bias in elicitation procedures? Evidence from field auctions for sportscards," Framed Field Experiments 00163, The Field Experiments Website.
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  9. List, John A. & Shogren, Jason F., 2002. "Calibration of Willingness-to-Accept," Journal of Environmental Economics and Management, Elsevier, vol. 43(2), pages 219-233, March.
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  16. Cummings, Ronald G & Harrison, Glenn W & Rutstrom, E Elisabet, 1995. "Homegrown Values and Hypothetical Surveys: Is the Dichotomous Choice Approach Incentive-Compatible?," American Economic Review, American Economic Association, vol. 85(1), pages 260-66, March.
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  27. List, John A. & Shogren, Jason F., 1998. "Calibration of the difference between actual and hypothetical valuations in a field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 37(2), pages 193-205, October.
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