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Heterogeneous anchoring in dichotomous choice valuation framework

Author

Listed:
  • Emmanuel FLACHAIRE

    (Paris School of Economics, University of Paris 1)

  • Guillaume HOLLARD

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

  • Stéphane LUCHINI

    (Greqam-Idep-CNRS)

Abstract

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

Suggested Citation

  • Emmanuel FLACHAIRE & Guillaume HOLLARD & Stéphane LUCHINI, 2007. "Heterogeneous anchoring in dichotomous choice valuation framework," Discussion Papers (REL - Recherches Economiques de Louvain) 2007042, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  • Handle: RePEc:ctl:louvre:2007042
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    References listed on IDEAS

    as
    1. 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.
    2. 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.
    3. 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.
    4. 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.
    5. 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.
    6. David M. Grether, 1980. "Bayes Rule as a Descriptive Model: The Representativeness Heuristic," The Quarterly Journal of Economics, Oxford University Press, vol. 95(3), pages 537-557.
    7. 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.
    8. John A. List, 2004. "Neoclassical Theory Versus Prospect Theory: Evidence from the Marketplace," Econometrica, Econometric Society, vol. 72(2), pages 615-625, March.
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    Citations

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    Cited by:

    1. Nicolas Jacquemet & Alexander James & Stéphane Luchini & Jason Shogren, 2011. "Social Psychology and Environmental Economics: A New Look at ex ante Corrections of Biased Preference Evaluation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 48(3), pages 413-433, March.
    2. Dominique Ami & Frédéric Aprahamian & Olivier Chanel & Stéphane Luchini, 2011. "A Test of Cheap Talk in Different Hypothetical Contexts: The Case of Air Pollution," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 50(1), pages 111-130, September.
    3. Nicolas Jacquemet & Alexander James & Stephane Luchini & Jason Shogren, 2010. "Social psychology and environmental economics : a new look at ex ante corrections of biased preference evaluation," Post-Print halshs-00462193, HAL.
    4. Frédéric Salladarré & Dorothée Brécard & Sterenn Lucas & Pierrick Ollivier, 2016. "Are French consumers ready to pay a premium for eco-labeled seafood products? A contingent valuation estimation with heterogeneous anchoring," Agricultural Economics, International Association of Agricultural Economists, vol. 47(2), pages 247-258, March.
    5. repec:eee:jfpoli:v:76:y:2018:i:c:p:44-55 is not listed on IDEAS
    6. Schwarzinger, Michaël & Carrat, Fabrice & Luchini, Stéphane, 2009. ""If you have the flu symptoms, your asymptomatic spouse may better answer the willingness-to-pay question": Evidence from a double-bounded dichotomous choice model with heterogeneous anchori," Journal of Health Economics, Elsevier, vol. 28(4), pages 873-884, July.
    7. Luchini, Stéphane & Watson, Verity, 2013. "Uncertainty and framing in a valuation task," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 204-214.
    8. Pierre-Alexandre Mahieu & Romain Craste & Bengt Kriström & Pere Riera, 2014. "Non-market valuation in France: An overview of the research activity," Working Papers hal-01087365, HAL.
    9. Michaël Schwarzinger & Fabrice Carrat & Stéphane Luchini, 2009. ""If you have the flu symptoms, your asymptomatic spouse may better answer the willingness-to-pay question". Evidence from a double-bounded dichotomous choice model with heterogeneous anchori," Post-Print inserm-00636179, HAL.

    More about this item

    Keywords

    Anchoring; contingent valuation; heterogeneity; framing effects;

    JEL classification:

    • Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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