A Comparison of Induced Value and Home-Grown Value Experiments to Test for Hypothetical Bias in Contingent Valuation
This study tests the hypothesis that hypothetical bias may not be related to value elicitation; rather it may be a value formation problem. When participants are asked to indicate their willingness to pay for an induced value good, we find no evidence of hypothetical bias for three different commodity types (public good, private good, and publicly provided private good). However, when these same subjects are asked to value homegrown goods with no pre-assigned induced value using the same elicitation mechanism, hypothetical values are roughly double actual payments in all three cases. These results support the hypothesis that the process of forming values in a homegrown setting may be a key contributor to hypothetical bias.
|Date of creation:||Mar 2010|
|Publication status:||Published in Environmental and Resource Economics, 47(1):111-123|
|Contact details of provider:|| Web page: http://www.cbpp.uaa.alaska.edu/CBPPHome/DepartmentsandMajors/Economics.aspx|
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Magnus Johannesson & Bengt Liljas & Per-Olov Johansson, 1998. "An experimental comparison of dichotomous choice contingent valuation questions and real purchase decisions," Applied Economics, Taylor & Francis Journals, vol. 30(5), pages 643-647.
- Todd Cherry & Peter Frykblom & Jason Shogren & John List & Melonie Sullivan, 2004.
"Laboratory Testbeds and Non-Market Valuation: The Case of Bidding Behavior in a Second-Price Auction with an Outside Option,"
Environmental & Resource Economics,
Springer;European Association of Environmental and Resource Economists, vol. 29(3), pages 285-294, November.
- Todd L. Cherry & Peter Frykblom & John List & Jason Shogren & Melonie Williams, 2002. "Laboratory Testbeds and Nonmarket Valuation: The Case of Bidding Behavior in a Second Price Auction with an Outside Option," Working Papers 02-13, Department of Economics, Appalachian State University.
- Murphy, James J. & Stevens, Thomas H., 2004. "Contingent Valuation, Hypothetical Bias, and Experimental Economics," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 33(2), October.
- Robin Gregory & Sarah Lichtenstein & Thomas C. Brown & George L. Peterson & Paul Slovic, 1995. "How Precise Are Monetary Representations of Environmental Improvements?," Land Economics, University of Wisconsin Press, vol. 71(4), pages 462-473.
- Taylor, Laura O. & McKee, Michael & Laury, Susan K. & Cummings, Ronald G., 2001. "Induced-value tests of the referendum voting mechanism," Economics Letters, Elsevier, vol. 71(1), pages 61-65, April.
- Yohei Mitani & Nicholas E. Flores, 2009. "Demand Revelation, Hypothetical Bias, and Threshold Public Goods Provision," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 44(2), pages 231-243, October.
- Noussair, Charles & Robin, Stephane & Ruffieux, Bernard, 2004. "Revealing consumers' willingness-to-pay: A comparison of the BDM mechanism and the Vickrey auction," Journal of Economic Psychology, Elsevier, vol. 25(6), pages 725-741, December.
- Aadland, David & Caplan, Arthur J., 2006.
"Cheap talk reconsidered: New evidence from CVM,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 60(4), pages 562-578, August.
- Cannon Koo & John List & Michael Margolis & Jason Shogren, 2001.
"A random nth-price auction,"
Artefactual Field Experiments
00517, The Field Experiments Website.
- James Murphy & P. Allen & Thomas Stevens & Darryl Weatherhead, 2005. "A Meta-analysis of Hypothetical Bias in Stated Preference Valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 30(3), pages 313-325, 03.
- Susan Chilton & Anthony Burton & Katherine Carson & W. George Hutchinson, 2004.
"An Experimental Investigation Of Explanations For Inconsistencies In Responses To Second Offers In Double Referenda,"
Royal Economic Society Annual Conference 2004
60, Royal Economic Society.
- Burton, Anthony C. & Carson, Katherine S. & Chilton, Susan M. & Hutchinson, W. George, 2003. "An experimental investigation of explanations for inconsistencies in responses to second offers in double referenda," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 472-489, November.
- Jayson L. Lusk, 2003.
"Effects of Cheap Talk on Consumer Willingness-to-Pay for Golden Rice,"
American Journal of Agricultural Economics,
Agricultural and Applied Economics Association, vol. 85(4), pages 840-856.
- Lusk, Jayson L., 2002. "Effects Of Cheap Talk On Consumer Willingness-To-Pay For Golden Rice," 2002 Annual meeting, July 28-31, Long Beach, CA 19597, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Harrison, Glenn W. & Rutström, E. Elisabet, 2008. "Experimental Evidence on the Existence of Hypothetical Bias in Value Elicitation Methods," Handbook of Experimental Economics Results, Elsevier.
- Brown, Thomas C. & Ajzen, Icek & Hrubes, Daniel, 2003. "Further tests of entreaties to avoid hypothetical bias in referendum contingent valuation," Journal of Environmental Economics and Management, Elsevier, vol. 46(2), pages 353-361, September.
- Harrison, Glen W. & Ronald M. Harstad & E. Elisabet Rutström, 1995.
"Experimental Methods and Elicitation of Values,"
Discussion Paper Serie B
349, University of Bonn, Germany.
- Ethier, Robert G. & Poe, Gregory L. & Schulze, William D. & Clark, Jeremy, 1997.
"A Comparison Of Hypothetical Phone And Mail Contingent Valuation Responses For Green Pricing Electricity Programs,"
7245, Cornell University, Department of Applied Economics and Management.
- Robert G. Ethier & Gregory L. Poe & William D. Schulze & Jeremy Clark, 2000. "Comparison of Hypothetical Phone and Mail Contingent Valuation Responses for Green-Pricing Electricity Programs," Land Economics, University of Wisconsin Press, vol. 76(1), pages 54-67.
- Gregory, Robin & Slovic, Paul, 1997. "A constructive approach to environmental valuation," Ecological Economics, Elsevier, vol. 21(3), pages 175-181, June.
- Champ, Patricia A. & Bishop, Richard C. & Brown, Thomas C. & McCollum, Daniel W., 1997. "Using Donation Mechanisms to Value Nonuse Benefits from Public Goods," Journal of Environmental Economics and Management, Elsevier, vol. 33(2), pages 151-162, June.
- John A. List & Michael K. Price, 2013.
"Using Field Experiments in Environmental and Resource Economics,"
NBER Working Papers
19289, National Bureau of Economic Research, Inc.
- John List & Michael Price, 2013. "Using Field Experiments in Environmental and Resource Economics," Artefactual Field Experiments 00447, The Field Experiments Website.
- Gregory Poe & Jeremy Clark & Daniel Rondeau & William Schulze, 2002. "Provision Point Mechanisms and Field Validity Tests of Contingent Valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 23(1), pages 105-131, September.
- Christian Vossler & Michael McKee, 2006. "Induced-Value Tests of Contingent Valuation Elicitation Mechanisms," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 35(2), pages 137-168, October.
When requesting a correction, please mention this item's handle: RePEc:ala:wpaper:2010-06. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jonathan Alevy)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.