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Uncertainty and framing in a valuation task

Author

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  • Stephane Luchini

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • Verity Watson

    (Health Economics Research Unit - University of Aberdeen)

Abstract

Many stated preference studies report framing effects in responses to valuation questions. Framing in stated preference studies occurs when respondents use irrelevant information contained in the question to help them value the good. This may occur because respondents are uncertain or do not hold well-formed preferences for the good in question. We investigate if respondent certainty explains framing effects in a contingent valuation study, using data from a double bounded dichotomous elicitation format and a follow-up certainty question. We investigate if respondent certainty influences anchoring and the shift effect. We find evidence that the anchoring effect is stronger for respondents who are less certain about their response to the contingent valuation question compared to respondents who are very certain. However, the shift effect is significant and negative only for respondents who are very certain. Our results indicate that certain respondents are more consistent with the predictions of rational behaviour than uncertain respondents.

Suggested Citation

  • Stephane Luchini & Verity Watson, 2013. "Uncertainty and framing in a valuation task," Post-Print hal-01500881, HAL.
    • Handle: RePEc:hal:journl:hal-01500881
    DOI: 10.1016/j.joep.2013.08.001
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    Cited by:

    1. Ciccarone Giuseppe & Giuli Francesco & Marchetti Enrico, 2020. "Prospect Theory and sentiment-driven fluctuations," The B.E. Journal of Macroeconomics, De Gruyter, vol. 20(1), pages 1-25, January.
    2. Domenico Piccolo & Rosaria Simone, 2019. "The class of cub models: statistical foundations, inferential issues and empirical evidence," Statistical Methods & Applications, Springer;Società Italiana di Statistica, vol. 28(3), pages 389-435, September.
    3. 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.
    4. Nicolas Jacquemet & Alexander James & Stéphane Luchini & Jason F. Shogren, 2017. "Referenda Under Oath," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 67(3), pages 479-504, July.
    5. Iannario, Maria & Manisera, Marica & Zuccolotto, Paola, 2015. "The treatment of don't know responses in the consumers' perceptions: a survey in the agri-food sector," 143rd Joint EAAE/AAEA Seminar, March 25-27, 2015, Naples, Italy 202704, European Association of Agricultural Economists.
    6. Nicolas Jacquemet & Robert-Vincent Joule & Stéphane Luchini & Antoine Malézieux, 2016. "Engagement et incitations : comportements économiques sous serment," L'Actualité Economique, Société Canadienne de Science Economique, vol. 92(1-2), pages 315-349.
    7. Voltaire, Louinord & Donfouet, Hermann Pythagore Pierre & Pirrone, Claudio & Larzillière, Agathe, 2017. "Respondent Uncertainty and Ordering Effect on Willingness to Pay for Salt Marsh Conservation in the Brest Roadstead (France)," Ecological Economics, Elsevier, vol. 137(C), pages 47-55.
    8. Zhihua Li & Kirsten I. M. Rohde & Peter P. Wakker, 2017. "Improving one’s choices by putting oneself in others’ shoes – An experimental analysis," Journal of Risk and Uncertainty, Springer, vol. 54(1), pages 1-13, February.

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    Keywords

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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D60 - Microeconomics - - Welfare Economics - - - General

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