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An Inferred Valuation Method

  • Jayson L. Lusk
  • F. Bailey Norwood

Although estimates of people’s values for public goods are often needed to conduct costbenefit analysis, existing value elicitation methods are prone to a number of well-documented biases. We argue that some of these biases result because people derive utility from the act of saying they are willing to pay for a good. To counteract this phenomenon, we consider an approach that asks people to predict or infer others’ values for a good instead of asking people to state their own value. Both a conceptual model and results from a laboratory experiment lend support for the new approach.

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Article provided by University of Wisconsin Press in its journal Land Economics.

Volume (Year): 85 (2009)
Issue (Month): 3 ()
Pages: 500-514

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Handle: RePEc:uwp:landec:v:85:y:2009:i:3:p:500-514
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