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Effects Of Cheap Talk On Consumer Willingness-To-Pay For Golden Rice

  • Lusk, Jayson L.

A large body of literature suggests individuals behave differently when responding to hypothetical valuation questions than when actual payment is required. Such findings have generated a great deal of skepticism over the use of the contingent valuation method and benefit measures derived from it. Recently, a new method, cheap talk, has been proposed to eliminate the potential bias in hypothetical valuation questions. Cheap talk refers to process of explaining hypothetical bias to individuals prior to asking a valuation question. This study explores the effect of cheap talk in a mass mail survey using a conventional value elicitation technique. Results suggest that cheap talk was effective at reducing willingness-to-pay for most survey participants. However, consistent with previous research, cheap talk did not reduce willingness-to-pay for consumers who were knowledgeable of the good evaluated.

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File URL: http://purl.umn.edu/19597
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Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2002 Annual meeting, July 28-31, Long Beach, CA with number 19597.

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Date of creation: 2002
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Handle: RePEc:ags:aaea02:19597
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  1. Noussair, C. & Robin, S. & Ruffieux, B., 2001. "Do Consumers Not Care about Biotech Foods or Do They Just Not Read the Labels?," Purdue University Economics Working Papers 1142, Purdue University, Department of Economics.
  2. John List & Craig Gallet, 2001. "What Experimental Protocol Influence Disparities Between Actual and Hypothetical Stated Values?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 20(3), pages 241-254, November.
  3. Fox, John A. & Shogren, Jason F. & Hayes, Dermot J. & Kliebenstein, James, 1998. "Cvm-X: Calibrating Contingent Values with Experimental Auction Markets," Staff General Research Papers 1311, Iowa State University, Department of Economics.
  4. Trudy Ann Cameron, 1991. "Interval Estimates of Non-Market Resource Values from Referendum Contingent Valuation Surveys," Land Economics, University of Wisconsin Press, vol. 67(4), pages 413-421.
  5. Unnevehr, Laurian J. & Eales, J. & Jensen, Helen H. & Lusk, J. & McCluskey, J. & Kinsey, J., 2010. "Food and Consumer Economics," Staff General Research Papers 31410, Iowa State University, Department of Economics.
  6. Jason Shogren & John List, 1998. "Calibration of the difference between actual and hypothetical valuations in a field experiment," Natural Field Experiments 00296, The Field Experiments Website.
  7. John List & Michael Taylor & Paramita Sinha, 2006. "Using choice experiments to value non-market goods and services: Evidence from field experiments," Natural Field Experiments 00278, The Field Experiments Website.
  8. Carlsson, Fredrik & Martinsson, Peter, 2001. "Do Hypothetical and Actual Marginal Willingness to Pay Differ in Choice Experiments?: Application to the Valuation of the Environment," Journal of Environmental Economics and Management, Elsevier, vol. 41(2), pages 179-192, March.
  9. Jason Shogren & John List & Michael Margolis, 1998. "Hypothetical-actual bid calibration of a multi-good auction," Framed Field Experiments 00171, The Field Experiments Website.
  10. Haab, Timothy C., 1998. "Estimation Using Contingent Valuation Data from a "Dichotomous Choice with Follow-Up" Questionnaire: A Comment," Journal of Environmental Economics and Management, Elsevier, vol. 35(2), pages 190-194, March.
  11. John List, 2001. "Do explicit warnings eliminate the hypothetical bias in elicitation procedures? Evidence from field auctions for sportscards," Framed Field Experiments 00163, The Field Experiments Website.
  12. Massimo Paradiso & Antonella Trisorio, 2001. "The effect of knowledge on the disparity between hypothetical and real willingness to pay," Applied Economics, Taylor & Francis Journals, vol. 33(11), pages 1359-1364.
  13. Timothy C. Haab & Ju-Chin Huang & John C. Whitehead, . "Are Hypothetical Referenda Incentive Compatible? A Comment," Working Papers 9708, East Carolina University, Department of Economics.
  14. Lusk, Jayson L. & Hudson, Darren, 2004. "Effect of monitor-subject cheap talk on ultimatum game offers," Journal of Economic Behavior & Organization, Elsevier, vol. 54(3), pages 439-443, July.
  15. Jayson L. Lusk & Jutta Roosen & John A. Fox, 2003. "Demand for Beef from Cattle Administered Growth Hormones or Fed Genetically Modified Corn: A Comparison of Consumers in France, Germany, the United Kingdom, and the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(1), pages 16-29.
  16. Cameron, Trudy Ann, 1988. "A new paradigm for valuing non-market goods using referendum data: Maximum likelihood estimation by censored logistic regression," Journal of Environmental Economics and Management, Elsevier, vol. 15(3), pages 355-379, September.
  17. Cameron Trudy Ann & Quiggin John, 1994. "Estimation Using Contingent Valuation Data from a Dichotomous Choice with Follow-Up Questionnaire," Journal of Environmental Economics and Management, Elsevier, vol. 27(3), pages 218-234, November.
  18. John Loomis & Thomas Brown & Beatrice Lucero & George Peterson, 1997. "Evaluating the Validity of the Dichotomous Choice Question Format in Contingent Valuation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 10(2), pages 109-123, September.
  19. Jason F. Shogren & John A. List & Dermot J. Hayes, 2000. "Preference Learning in Consecutive Experimental Auctions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 1016-1021.
  20. Lusk, Jayson L. & Moore, Melissa & House, Lisa & Morrow, Bert, 2001. "Influence Of Brand Name And Type Of Modification On Consumer Acceptance Of Genetically Engineered Corn Chips: A Preliminary Analysis," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 4(04).
  21. Laura O. Taylor & Ronald G. Cummings, 1999. "Unbiased Value Estimates for Environmental Goods: A Cheap Talk Design for the Contingent Valuation Method," American Economic Review, American Economic Association, vol. 89(3), pages 649-665, June.
  22. Timothy C. Haab & Kenneth E. McConnell, 1998. "Referendum Models and Economic Values: Theoretical, Intuitive, and Practical Bounds on Willingness to Pay," Land Economics, University of Wisconsin Press, vol. 74(2), pages 216-229.
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