IDEAS home Printed from https://ideas.repec.org/p/aua/wpaper/2014-2.html
   My bibliography  Save this paper

Elicitation formats and the WTA/WTP gap: A study of climate neutral foods

Author

Listed:
  • Andreas C. Drichoutis

    () (Department of Agricultural Economics,, Agricultural University of Athens)

  • Jayson L. Lusk

    () (Department of Agricultural Economics, Oklahoma State University)

  • Valentina Pappa

    () (Department of Economics, University of Ioannina)

Abstract

We conduct a field valuation experiment where we vary the valuation method (contingent valuation vs. inferred valuation) as well as the payment format (dichotomous choice vs. payment card). Willingness-to-accept and willingness-to-pay valuations are elicited in a within-subjects design for foods with climate neutral labels. We find a similar gap for valuations elicited with the contingent or the inferred valuation method. However, we also find that the gap can be muted by using a payment card elicitation format.

Suggested Citation

  • Andreas C. Drichoutis & Jayson L. Lusk & Valentina Pappa, 2014. "Elicitation formats and the WTA/WTP gap: A study of climate neutral foods," Working Papers 2014-2, Agricultural University of Athens, Department Of Agricultural Economics.
  • Handle: RePEc:aua:wpaper:2014-2
    as

    Download full text from publisher

    File URL: http://aoatools.aua.gr/RePEc/aua/wpaper/files/2014-2_drichoutis.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Zhongmin, Xu & Loomis, John & Zhiqiang, Zhang & Hamamura, Kuino, 2006. "Evaluating the performance of different willingness to pay question formats for valuing environmental restoration in rural China," Environment and Development Economics, Cambridge University Press, vol. 11(5), pages 585-601, October.
    2. Rodolfo M. Nayga, Jr. & Ximing Wu & Robert G. Brummett, 2007. "On the Use of Cheap Talk in New Product Valuation," Economics Bulletin, AccessEcon, vol. 2(1), pages 1-9.
    3. Harless, David W., 1989. "More laboratory evidence on the disparity between willingness to pay and compensation demanded," Journal of Economic Behavior & Organization, Elsevier, vol. 11(3), pages 359-379, May.
    4. Cam Donaldson & Ruth Thomas & David Torgerson, 1997. "Validity of open-ended and payment scale approaches to eliciting willingness to pay," Applied Economics, Taylor & Francis Journals, vol. 29(1), pages 79-84.
    5. Catherine L. Kling & Daniel J. Phaneuf & Jinhua Zhao, 2012. "From Exxon to BP: Has Some Number Become Better Than No Number?," Journal of Economic Perspectives, American Economic Association, vol. 26(4), pages 3-26, Fall.
    6. Loewenstein, George & Adler, Daniel, 1995. "A Bias in the Prediction of Tastes," Economic Journal, Royal Economic Society, vol. 105(431), pages 929-937, July.
    7. Cameron, Trudy Ann & Huppert, Daniel D., 1989. "OLS versus ML estimation of non-market resource values with payment card interval data," Journal of Environmental Economics and Management, Elsevier, vol. 17(3), pages 230-246, November.
    8. Gadema, Zaina & Oglethorpe, David, 2011. "The use and usefulness of carbon labelling food: A policy perspective from a survey of UK supermarket shoppers," Food Policy, Elsevier, vol. 36(6), pages 815-822.
    9. Buzby, Jean C. & Fox, John A. & Ready, Richard C. & Crutchfleld, Stephen R., 1998. "Measuring Consumer Benefits of Food Safety Risk Reductions," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 30(1), pages 69-82, July.
    10. Hideo Aizaki & Yasuhiro Nakashima & Kiyokazu Ujiie & Hironobu Takeshita & Kengo Tahara, 2011. "Intention to access food risk information through Internet-enabled mobile phones: the role of critical thinking," Applied Economics Letters, Taylor & Francis Journals, vol. 18(11), pages 1005-1009.
    11. Shi, Lijia & Gao, Zhifeng & Chen, Xuqi, 2014. "The cross-price effect on willingness-to-pay estimates in open-ended contingent valuation," Food Policy, Elsevier, vol. 46(C), pages 13-21.
    12. Richard T. Carson, 2012. "Contingent Valuation: A Practical Alternative When Prices Aren't Available," Journal of Economic Perspectives, American Economic Association, vol. 26(4), pages 27-42, Fall.
    13. Richard T. Carson & Theodore Groves & John A. List, 2014. "Consequentiality: A Theoretical and Experimental Exploration of a Single Binary Choice," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 1(1), pages 171-207.
    14. Cameron, Trudy Ann & James, Michelle D, 1987. "Efficient Estimation Methods for "Closed-ended' Contingent Valuation Surveys," The Review of Economics and Statistics, MIT Press, vol. 69(2), pages 269-276, May.
    15. Van Boven, Leaf & Loewenstein, George & Dunning, David, 2003. "Mispredicting the endowment effect:: Underestimation of owners' selling prices by buyer's agents," Journal of Economic Behavior & Organization, Elsevier, vol. 51(3), pages 351-365, July.
    16. Richard Carson & Nicholas Flores & Norman Meade, 2001. "Contingent Valuation: Controversies and Evidence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 19(2), pages 173-210, June.
    17. Solomon, Barry D. & Johnson, Nicholas H., 2009. "Valuing climate protection through willingness to pay for biomass ethanol," Ecological Economics, Elsevier, vol. 68(7), pages 2137-2144, May.
    18. Elofsson, Katarina & Bengtsson, Niklas & Matsdotter, Elina & Arntyr, Johan, 2016. "The impact of climate information on milk demand: Evidence from a field experiment," Food Policy, Elsevier, vol. 58(C), pages 14-23.
    19. Timothy C. Haab & Matthew G. Interis & Daniel R. Petrolia & John C. Whitehead, 2013. "From Hopeless to Curious? Thoughts on Hausman's "Dubious to Hopeless" Critique of Contingent Valuation," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 35(4), pages 593-612.
    20. Drichoutis, Andreas C. & Vassilopoulos, Achilleas & Lusk, Jayson & Nayga, Rodolfo M., 2015. "Fair farming: Preferences for fair labor certification using four elicitation methods," MPRA Paper 62546, University Library of Munich, Germany.
    21. Hu, Wuyang & Woods, Timothy & Bastin, Sandra & Cox, Linda & You, Wen, 2011. "Assessing Consumer Willingness to Pay for Value-Added Blueberry Products Using a Payment Card Survey," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 43(2), pages 243-258, May.
    22. Satterthwaite, Mark Allen, 1975. "Strategy-proofness and Arrow's conditions: Existence and correspondence theorems for voting procedures and social welfare functions," Journal of Economic Theory, Elsevier, vol. 10(2), pages 187-217, April.
    23. Jayson L. Lusk & F. Bailey Norwood, 2009. "An Inferred Valuation Method," Land Economics, University of Wisconsin Press, vol. 85(3), pages 500-514.
    24. Didem Kurt & J. Jeffrey Inman, 2013. "Mispredicting Others' Valuations: Self-Other Difference in the Context of Endowment," Journal of Consumer Research, Oxford University Press, vol. 40(1), pages 78-89.
    25. Hanemann, W Michael, 1991. "Willingness to Pay and Willingness to Accept: How Much Can They Differ?," American Economic Review, American Economic Association, vol. 81(3), pages 635-647, June.
    26. Grebitus, Carola & Steiner, Bodo & Veeman, Michele, 2015. "The roles of human values and generalized trust on stated preferences when food is labeled with environmental footprints: Insights from Germany," Food Policy, Elsevier, vol. 52(C), pages 84-91.
    27. Brookshire, David S & Coursey, Don L, 1987. "Measuring the Value of a Public Good: An Empirical Comparison of Elicitation Procedures," American Economic Review, American Economic Association, vol. 77(4), pages 554-566, September.
    28. Charness, Gary & Gneezy, Uri & Kuhn, Michael A., 2012. "Experimental methods: Between-subject and within-subject design," Journal of Economic Behavior & Organization, Elsevier, vol. 81(1), pages 1-8.
    29. Svensson, Lars-Gunnar & Reffgen, Alexander, 2014. "The proof of the Gibbard–Satterthwaite theorem revisited," Journal of Mathematical Economics, Elsevier, vol. 55(C), pages 11-14.
    30. Smith, Richard D. & Sach, Tracey H., 2010. "Contingent valuation: what needs to be done?," Health Economics, Policy and Law, Cambridge University Press, vol. 5(1), pages 91-111, January.
    31. Gibbard, Allan, 1973. "Manipulation of Voting Schemes: A General Result," Econometrica, Econometric Society, vol. 41(4), pages 587-601, July.
    32. Coley, David & Howard, Mark & Winter, Michael, 2009. "Local food, food miles and carbon emissions: A comparison of farm shop and mass distribution approaches," Food Policy, Elsevier, vol. 34(2), pages 150-155, April.
    33. Alessandro Corsi, 2007. "Ambiguity of measured WTP for quality improvements when quantity is unconstrained: a note," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 34(4), pages 501-515, December.
    34. Czajkowski, Mikołaj & Vossler, Christian A. & Budziński, Wiktor & Wiśniewska, Aleksandra & Zawojska, Ewa, 2017. "Addressing empirical challenges related to the incentive compatibility of stated preferences methods," Journal of Economic Behavior & Organization, Elsevier, vol. 142(C), pages 47-63.
    35. Lusk, Jayson L. & Norwood, F. Bailey, 2009. "Bridging the gap between laboratory experiments and naturally occurring markets: An inferred valuation method," Journal of Environmental Economics and Management, Elsevier, vol. 58(2), pages 236-250, September.
    36. Horowitz, John K. & McConnell, Kenneth E., 2002. "A Review of WTA/WTP Studies," Journal of Environmental Economics and Management, Elsevier, vol. 44(3), pages 426-447, November.
    37. Sayman, Serdar & Onculer, Ayse, 2005. "Effects of study design characteristics on the WTA-WTP disparity: A meta analytical framework," Journal of Economic Psychology, Elsevier, vol. 26(2), pages 289-312, April.
    38. Shane Frederick, 2012. "Overestimating Others' Willingness to Pay," Journal of Consumer Research, Oxford University Press, vol. 39(1), pages 1-21.
    39. Glenn W. Harrison & Eric Johnson & Melayne M. McInnes & E. Elisabet Rutström, 2005. "Risk Aversion and Incentive Effects: Comment," American Economic Review, American Economic Association, vol. 95(3), pages 897-901, June.
    40. Hovenkamp, Herbert, 1991. "Legal Policy and the Endowment Effect," The Journal of Legal Studies, University of Chicago Press, vol. 20(2), pages 225-247, June.
    41. Brouwer, Roy & van Beukering, Pieter & Sultanian, Elena, 2008. "The impact of the bird flu on public willingness to pay for the protection of migratory birds," Ecological Economics, Elsevier, vol. 64(3), pages 575-585, January.
    42. repec:ebl:ecbull:v:2:y:2007:i:1:p:1-9 is not listed on IDEAS
    43. Dixie Reaves & Randall Kramer & Thomas Holmes, 1999. "Does Question Format Matter? Valuing an Endangered Species," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 14(3), pages 365-383, October.
    44. Charles R. Plott & Kathryn Zeiler, 2005. "The Willingness to Pay–Willingness to Accept Gap, the "Endowment Effect," Subject Misconceptions, and Experimental Procedures for Eliciting Valuations," American Economic Review, American Economic Association, vol. 95(3), pages 530-545, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Achilleas Vassilopoulos & Niki Avgeraki & Stathis Klonaris, 2020. "Social desirability and the WTP–WTA disparity in common goods," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(7), pages 6425-6444, October.
    2. Neill, Clinton L. & Holcomb, Rodney B., 2019. "Does a food safety label matter? Consumer heterogeneity and fresh produce risk perceptions under the Food Safety Modernization Act," Food Policy, Elsevier, vol. 85(C), pages 7-14.
    3. Fabio Boncinelli & Francesca Gerini & Benedetta Neri & Leonardo Casini, 2018. "Consumer willingness to pay for non‐mandatory indication of the fish catch zone," Agribusiness, John Wiley & Sons, Ltd., vol. 34(4), pages 728-741, October.
    4. Frondel, Manuel & Sommer, Stephan & Tomberg, Lukas, 2019. "Versorgungssicherheit mit Strom: Empirische Evidenz auf Basis der Inferred-Valuation-Methode," EconStor Open Access Articles, ZBW - Leibniz Information Centre for Economics, pages 53-73.
    5. Maurizio Canavari & Silvia Coderoni, 2020. "Consumer stated preferences for dairy products with carbon footprint labels in Italy," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 8(1), pages 1-16, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Drichoutis, Andreas C. & Vassilopoulos, Achilleas & Lusk, Jayson L. & Nayga, Rodolfo M. Jr., 2015. "Reference dependence, consequentiality and social desirability in value elicitation: A study of fair labor labeling," 143rd Joint EAAE/AAEA Seminar, March 25-27, 2015, Naples, Italy 202705, European Association of Agricultural Economists.
    2. Drichoutis, Andreas C. & Vassilopoulos, Achilleas & Lusk, Jayson & Nayga, Rodolfo M., 2015. "Fair farming: Preferences for fair labor certification using four elicitation methods," MPRA Paper 62546, University Library of Munich, Germany.
    3. Richard T. Carson & Miko_aj Czajkowski, 2014. "The discrete choice experiment approach to environmental contingent valuation," Chapters, in: Stephane Hess & Andrew Daly (ed.), Handbook of Choice Modelling, chapter 9, pages 202-235, Edward Elgar Publishing.
    4. Richard T. Carson, 2011. "Contingent Valuation," Books, Edward Elgar Publishing, number 2489.
    5. Giotis, Thomas & Drichoutis, Andreas C., 2020. "Consumer acceptance and willingness-to-pay for insect-based foods: The role of proximity of insects in the food chain," MPRA Paper 104840, University Library of Munich, Germany.
    6. Frondel, Manuel & Sommer, Stephan & Tomberg, Lukas, 2019. "WTA-WTP disparity: The role of perceived realism of the valuation setting," Ruhr Economic Papers 832, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    7. Tonin, Stefania, 2018. "Citizens’ perspectives on marine protected areas as a governance strategy to effectively preserve marine ecosystem services and biodiversity," Ecosystem Services, Elsevier, vol. 34(PB), pages 189-200.
    8. Achilleas Vassilopoulos & Niki Avgeraki & Stathis Klonaris, 2020. "Social desirability and the WTP–WTA disparity in common goods," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(7), pages 6425-6444, October.
    9. Jesús Martín-Fernández & Gloria Ariza-Cardiel & Luz Mª Peña-Longobardo & Elena Polentinos-Castro & Juan Oliva-Moreno & Ana Isabel Gil-Lacruz & Héctor Medina-Palomino & Isabel del Cura-González, 2017. "“Gaining or losing”: The importance of the perspective in primary care health services valuation," PLOS ONE, Public Library of Science, vol. 12(12), pages 1-14, December.
    10. Christian A. Vossler & Stéphane Bergeron & Maurice Doyon & Daniel Rondeau, 2020. "Revisiting the Gap Between the Willingness-to-Pay and Willingness-to-Accept for Public Goods," CIRANO Working Papers 2020s-48, CIRANO.
    11. Jerrod M. Penn & Wuyang Hu, 2021. "The Extent of Hypothetical Bias in Willingness to Accept," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(1), pages 126-141, January.
    12. Alix-Garcia, Jennifer M. & Sims, Katharine R.E. & Phaneuf, Daniel J., 2019. "Using referenda to improve targeting and decrease costs of conditional cash transfers," Journal of Public Economics, Elsevier, vol. 176(C), pages 179-194.
    13. Farr, Marina & Stoeckl, Natalie & Alam Beg, Rabiul, 2014. "The non-consumptive (tourism) ‘value’ of marine species in the Northern section of the Great Barrier Reef," Marine Policy, Elsevier, vol. 43(C), pages 89-103.
    14. Erik Brynjolfsson & Avinash Collis & Felix Eggers, 2019. "Using massive online choice experiments to measure changes in well-being," Proceedings of the National Academy of Sciences, Proceedings of the National Academy of Sciences, vol. 116(15), pages 7250-7255, April.
    15. Ivo Bischoff, 2008. "Endowment effect theory, prediction bias and publicly provided goods: an experimental study," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 39(3), pages 283-296, March.
    16. Richard Carson & Nicholas Flores & Norman Meade, 2001. "Contingent Valuation: Controversies and Evidence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 19(2), pages 173-210, June.
    17. Henrik Andersson & Nicolas Treich, 2011. "The Value of a Statistical Life," Chapters, in: André de Palma & Robin Lindsey & Emile Quinet & Roger Vickerman (ed.), A Handbook of Transport Economics, chapter 17, Edward Elgar Publishing.
    18. Stavroula Tsigou & Stathis Klonaris, 2018. "Factors affecting farmers’ WTP for innovative fertilizer against soil salinity," Working Papers 2018-3, Agricultural University of Athens, Department Of Agricultural Economics.
    19. William S. Neilson & Michael McKee & Robert P. Berrens, 2013. "Value and outcome uncertainty as explanations for the WTA vs WTP disparity," Chapters, in: John A. List & Michael K. Price (ed.), Handbook on Experimental Economics and the Environment, chapter 6, pages 171-189, Edward Elgar Publishing.
    20. Cook, David & Davíðsdóttir, Brynhildur & Kristófersson, Daði Már, 2016. "Energy projects in Iceland – Advancing the case for the use of economic valuation techniques to evaluate environmental impacts," Energy Policy, Elsevier, vol. 94(C), pages 104-113.

    More about this item

    Keywords

    willingness to pay; willingness to accept; contingent valuation; inferred valuation; payment card; single bounded;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aua:wpaper:2014-2. 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: (Kremmydas dimitrios). General contact details of provider: https://edirc.repec.org/data/daauagr.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.