Willingness to Pay for an Agricultural Technology: An Economic Application of List Experiments

List experiments utilize indirect survey questions to reduce social desirability bias in measures of sensitive behaviors and sentiments. While often used to assess retrospective behavior or opinions of respondents, list experiments have not been widely applied to assessing “deep” parameters of economic models, such as willingness to pay. Common stated preference methods of estimating willingness to pay may be impacted by social desirability bias, particularly when a product has been provided to survey recipients for free. List experiments can uncover the share of respondents willing to pay a given price while reducing social desirability bias. Repeating the method at a variety of prices recovers a partial demand curve. This study discusses the conditions required to satisfy the list experiment validity assumptions and demonstrates the method in an e-extension platform randomized control trial in Sri Lanka. We show that the “no design effect” assumption for list experiments requires that the budget constraint for a household be nonbinding. Under conditions where that assumption is likely to hold, we find direct estimates overstate willingness to pay at low prices. Our findings suggest list experiments may provide a cheap method of more accurately assessing the typically large share of respondents unwilling to pay any non-zero-sum (extensive margin), but are less effective at reducing bias from exaggerated demand (intensive margin).