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Heterogeneous anchoring in dichotomous choice valuation framework

  • Emmanuel FLACHAIRE

    (Paris School of Economics, University of Paris 1)

  • Guillaume HOLLARD

    (Paris School of Economics, University of Paris 1, CNRS)

  • Stéphane LUCHINI


This article addresses the important issue of anchoring in contingent valuation surveys that use the double-bounded elicitation format. Anchoring occurs when responses to the follow-up dichotomous choice valuation question are influenced by the bid presented in the initial dichotomous choice question. Specifîcally, we adapt a theory from psychology to characterize respondents as those who are likely to anchor and those who are not. Using a model developed by Herriges and Shogren (1996). Our method appears successful in discriminating between those who anchor and those who did not. An important resuit is that when controlling for anchoring - and allowing the degree of anchoring to differ between respondent groups - the efficiency of the double-bounded welfare estimate is greater than for the initial dichotomous choice question. This contrasts with earlier research that finds that the potential efficiency gain from the double-bounded questions is lost when anchoring is controlled for and that we are better off not asking follow-up questions

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Paper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (REL - Recherches Economiques de Louvain) with number 2007042.

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Length: 18
Date of creation: 01 Dec 2007
Date of revision:
Handle: RePEc:ctl:louvre:2007042
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  1. Green, Donald & Jacowitz, Karen E. & Kahneman, Daniel & McFadden, Daniel, 1998. "Referendum contingent valuation, anchoring, and willingness to pay for public goods," Resource and Energy Economics, Elsevier, vol. 20(2), pages 85-116, June.
  2. Hanemann, W. Michael, 1985. "Some Issues In Continuous - And Discrete - Response Contingent Valuation Studies," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 14(1), April.
  3. John A. List, 2004. "Neoclassical Theory Versus Prospect Theory: Evidence from the Marketplace," Econometrica, Econometric Society, vol. 72(2), pages 615-625, 03.
  4. Hollard, G. & Luchini, S., 1999. "Theories du choix social et representations: analyse d'une enquete sur le tourisme cert en Camargue," G.R.E.Q.A.M. 99b06, Universite Aix-Marseille III.
  5. Grether, David M., . "Bayes Rule as a Descriptive Model: The Representativeness Heuristic," Working Papers 245, California Institute of Technology, Division of the Humanities and Social Sciences.
  6. Herriges, Joseph A. & Shogren, Jason F., 1996. "Starting Point Bias in Dichotomous Choice Valuation with Follow-Up Questioning," Journal of Environmental Economics and Management, Elsevier, vol. 30(1), pages 112-131, January.
  7. Viaud, Jean & Roland-Levy, Christine, 2000. "A positional and representational analysis of consumption. Households when facing debt and credit," Journal of Economic Psychology, Elsevier, vol. 21(4), pages 411-432, August.
  8. Smith, V. Kerry, 1985. "Some Issues In Discrete Response Contingent Valuation Studies," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 14(1), April.
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