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Certainty calibration in contingent valuation - exploring the within-difference between dichotomous choice and open-ended answers as a certainty measure

  • Sund, Björn

    ()

    (Department of Business, Economics, Statistics and Informatics)

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    Hypothetical bias is a serious problem of stated preference techniques. The certainty approach calibrates answers by assessing different weights to remedy respondents’ valuation. However, very little research has been done to find a link between economic theory and empirical treatment of uncertainty through certainty calibration. We use a combination of dichotomous choice (DC) followed by an open-ended (OE) question to examine the relation between the degree of confidence and the distance between the DC bid and the OE answer. The results show that the OE bid difference is significantly correlated to the certainty level in one of our two contingent valuation (CV) surveys, with the probability of stating the highest confidence value increasing between 5-19 percent per SEK 1000 (~$170/€106) that the answer to the OE question and the bid differ. The second CV survey shows a significant relation for the no-responders.

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    File URL: http://www.oru.se/PageFiles/16759/WP%20Sund%202009%201.pdf
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    Paper provided by Örebro University, School of Business in its series Working Papers with number 2009:1.

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    Length: 40 pages
    Date of creation: 03 Feb 2009
    Date of revision:
    Handle: RePEc:hhs:oruesi:2009_001
    Contact details of provider: Postal: Örebro University School of Business, SE - 701 82 ÖREBRO, Sweden
    Phone: 019-30 30 00
    Fax: 019-33 25 46
    Web page: http://www.oru.se/Institutioner/Handelshogskolan-vid-Orebro-universitet/

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