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How common is the ‘prominence effect’? Additional evidence to Whynes et al

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  • Judith Covey
  • Richard D. Smith

Abstract

In a recent issue of Health Economics Letters, Whynes et al. report an observation not previously reported in the willingness‐to‐pay (WTP) literature; that when people are asked to provide an estimate using payment scales they tend to disproportionately select prominent values (that is, 1, 2, 5, 10, 20, 50, 100, etc.). However, it remains an open question just how common this prominence effect actually is. Here we present data from several additional contingent valuation (CV) studies, which suggest that although prominence occurs, it does not reach statistical significance, as found by Whynes et al. A number of reasons are outlined to explain this. Copyright © 2005 John Wiley & Sons, Ltd.

Suggested Citation

  • Judith Covey & Richard D. Smith, 2006. "How common is the ‘prominence effect’? Additional evidence to Whynes et al," Health Economics, John Wiley & Sons, Ltd., vol. 15(2), pages 205-210, February.
    • Handle: RePEc:wly:hlthec:v:15:y:2006:i:2:p:205-210
    DOI: 10.1002/hec.1062
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    References listed on IDEAS

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    1. Smith, Richard D., 2005. "Sensitivity to scale in contingent valuation: the importance of the budget constraint," Journal of Health Economics, Elsevier, vol. 24(3), pages 515-529, May.
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    Cited by:

    1. Pope, Robin & Selten, Reinhard & Kube, Sebastian, 2009. "Nominalist Heuristics and Economic Theory," Bonn Econ Discussion Papers 17/2009, University of Bonn, Bonn Graduate School of Economics (BGSE).
    2. Mandy Ryan & Verity Watson, 2009. "Comparing welfare estimates from payment card contingent valuation and discrete choice experiments," Health Economics, John Wiley & Sons, Ltd., vol. 18(4), pages 389-401, April.
    3. Richard D. Smith, 2007. "The role of 'reference goods' in contingent valuation: should we help respondents to 'construct' their willingness to pay?," Health Economics, John Wiley & Sons, Ltd., vol. 16(12), pages 1319-1332.
    4. von Hagen, Jürgen & Kube, Sebastian & Kaiser, Johannes & Selten, Reinhard & Pope, Robin, 2006. "Prominent Numbers and Ratios in Exchange Rate Determination: Field and Laboratory Evidence," Bonn Econ Discussion Papers 29/2006, University of Bonn, Bonn Graduate School of Economics (BGSE).
    5. Richard D. Smith, 2007. "The role of ‘reference goods’ in contingent valuation: should we help respondents to ‘construct’ their willingness to pay?," Health Economics, John Wiley & Sons, Ltd., vol. 16(12), pages 1319-1332, December.
    6. Whynes, David K. & Frew, Emma J. & Philips, Zoe N. & Covey, Judith & Smith, Richard D., 2007. "On the numerical forms of contingent valuation responses," Journal of Economic Psychology, Elsevier, vol. 28(4), pages 462-476, August.

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