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Warm glow, free-riding and vehicle neutrality in a health-related contingent valuation study

  • Franz Hackl

    (Department of Economics, Johannes Kepler University of Linz, Austria)

  • Gerald J. Pruckner

    (Department of Public Economics, University of Innsbruck, Innsbruck, Austria)

Criticism of contingent valuation (CV) stresses warm glow and free-riding as possible causes for biased willingness to pay figures. We present an empirical framework to study the existence of warm glow and free-riding in hypothetical WTP answers based on a CV survey for the measurement of health-related Red Cross services. Both in conventional double-bounded and spike models we do not find indication of warm glow phenomena and free-riding behaviour. The results are very robust and insensitive to the applied payment vehicles. Theoretical objections against CV do not find sufficient empirical support. Copyright © 2004 John Wiley & Sons, Ltd.

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Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 14 (2005)
Issue (Month): 3 ()
Pages: 293-306

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Handle: RePEc:wly:hlthec:v:14:y:2005:i:3:p:293-306
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