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Social desirability and the WTP–WTA disparity in common goods

Author

Listed:
  • Achilleas Vassilopoulos

    (University of Ioannina
    ICRE8: International Centre for Research on the Environment and the Economy)

  • Niki Avgeraki

    (Imperial College of London)

  • Stathis Klonaris

    (Agricultural University of Athens)

Abstract

This study explores the role of social desirability bias in the willingness to pay (WTP)–willingness to accept (WTA) disparity debate. In the context of a valuation scenario involving air quality in Athens, Greece, we examine whether the well-known WTP–WTA disparity is in place and whether social desirability could be related to this gap by introducing different magnitudes of bias on the two welfare measures. To do so, we contrast the results obtained from the contingent valuation method with those from the inferred valuation method that is believed to mitigate social desirability bias. On the policy side, the study shows that estimates of welfare loss associated with the Greek government’s decision to equalize the tax on diesel fuel and heating oil, which had serious side-effects on air quality, vary greatly with respect to the value measure and method of elicitation.

Suggested Citation

  • Achilleas Vassilopoulos & Niki Avgeraki & Stathis Klonaris, 2020. "Social desirability and the WTP–WTA disparity in common goods," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(7), pages 6425-6444, October.
    • Handle: RePEc:spr:endesu:v:22:y:2020:i:7:d:10.1007_s10668-019-00490-6
    DOI: 10.1007/s10668-019-00490-6
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