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WTP vs. WTA: Christmas Presents and the Endowment Effect

  • Bauer, Thomas K.



  • Schmidt, Christoph M.



Using data on the valuation of Christmas gifts received by students in different fields at a German university, we investigate whether the endowment effect differs between students of economics and other respondents and whether it varies with the market price of the object under consideration. Our estimation results suggest that economics students have both, a significant lower WTP and WTA, indicating that existing studies on the efficiency loss of holiday gifts and experimental studies on the endowment effect that rely on data from economics students may be biased. The result further indicates that the endowment effect is independent of the market price of the object.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3855.

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Length: 13 pages
Date of creation: Nov 2008
Date of revision:
Publication status: published in: Jahrbücher für Nationalökonomie und Statistik, 2012, 232 (1), 4 - 11
Handle: RePEc:iza:izadps:dp3855
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  1. repec:oup:qjecon:v:118:y:2003:i:1:p:41-71 is not listed on IDEAS
  2. repec:oup:qjecon:v:99:y:1984:i:3:p:507-21 is not listed on IDEAS
  3. Haigh, Michael S. & List, John A., 2002. "Do Professional Traders Exhibit Myopic Loss Aversion? An Experimental Analysis," Working Papers 28554, University of Maryland, Department of Agricultural and Resource Economics.
  4. List, John A & Shogren, Jason F, 1998. "The Deadweight Loss of Christmas: Comment," American Economic Review, American Economic Association, vol. 88(5), pages 1350-55, December.
  5. Steven D. Levitt & John A. List, 2007. "What Do Laboratory Experiments Measuring Social Preferences Reveal About the Real World?," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 153-174, Spring.
  6. List, John A. & Shogren, Jason F., 2002. "Calibration of Willingness-to-Accept," Journal of Environmental Economics and Management, Elsevier, vol. 43(2), pages 219-233, March.
  7. Simon Gaechter & Eric Johnson & Andreas Herrmann, 2007. "Individual-Level Loss Aversion In Riskless And Risky Choices," Discussion Papers 2007-02, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  8. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard H, 1990. "Experimental Tests of the Endowment Effect and the Coase Theorem," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1325-48, December.
  9. repec:feb:framed:0054 is not listed on IDEAS
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