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Self-Image and Valuation of Moral Goods: Stated versus Real Willingness to Pay

  • Johansson-Stenman, Olof

    ()

    (Department of Economics, School of Business, Economics and Law, Göteborg University)

  • Svedsäter, Henrik

    ()

    (Organisational Behaviour, London Business School, United Kingdom)

Hypothetical bias in stated-preference methods appears sometimes to be very large, and other times non-existent. This is here largely explained by a model where people derive utility from a positive self-image associated with morally commendable behavior. The results of a choice experiment are consistent with the predictions of this model; the hypothetical marginal willingness to pay (MWTP) for a moral good (contributions to a WWF project) is significantly higher than the corresponding real MWTP, whereas no hypothetical bias is present for an amoral good (a restaurant voucher). Moreover, both the theoretical model and the experimental evidence suggest that also the real MWTP for the moral good is biased upwards by being higher within than outside the experimental context.

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File URL: http://hdl.handle.net/2077/24143
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Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 484.

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Length: 39 pages
Date of creation: 13 Jan 2011
Date of revision:
Handle: RePEc:hhs:gunwpe:0484
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Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden

Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/

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