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Using Ex Ante Approaches to Obtain Credible Signals for Value in Contingent Markets: Evidence from the Field

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  • Craig E. Landry
  • John A. List

Abstract

While contingent valuation remains the only option available for measurement of total economic value of nonmarketed goods, the method has been criticized due to its hypothetical nature. We analyze field experimental data to evaluate two ex ante approaches to attenuating hypothetical bias, directly comparing value statements across four distinct referenda: hypothetical, "cheap talk", "consequential", and real. Our empirical evidence suggests two major findings: hypothetical responses are significantly different from real responses; and responses in the consequential and cheap talk treatments are statistically indistinguishable from real responses. We review the potential for each method to produce reliable results in the field. Copyright 2007, Oxford University Press.

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  • Craig E. Landry & John A. List, 2007. "Using Ex Ante Approaches to Obtain Credible Signals for Value in Contingent Markets: Evidence from the Field," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(2), pages 420-429.
  • Handle: RePEc:oup:ajagec:v:89:y:2007:i:2:p:420-429
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    File URL: http://hdl.handle.net/10.1111/j.1467-8276.2007.01017.x
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    1. Poe, Gregory L. & Clark, Jeremy & Schulze, William D., 1997. "Can Hypothetical, Questions Predict Actual, Participation In Public Programs? A Field Validity Test Using A Provision Point Mechanism," Working Papers 7264, Cornell University, Department of Applied Economics and Management.
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