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Comparing Open-Ended Choice Experiments and Experimental Auctions: An Application to Golden Rice

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  • Jay R. Corrigan
  • Dinah Pura T. Depositario
  • Rodolfo M. Nayga, Jr.
  • Ximing Wu
  • Tiffany P. Laude

Abstract

We use two different experimental valuation methods to estimate consumer demand for genetically-modified golden rice. The first is an open-ended choice experiment (OECE) where participants name the quantities of golden rice and conventional rice demanded at each of several price combinations, one of which will be randomly chosen as binding. This allows us to estimate market demand by aggregating demand across participants. This estimate of market demand also allows us to estimate own-price elasticity and consumer surplus for golden rice. Comparing willingness-to-pay (WTP) estimates from the OECE with those from a uniform-price auction, we find that OECE WTP estimates exhibit less affiliation across rounds, and the effects of positive and negative information under the OECE are more consistent with prior expectations and existing studies. We also find that while auction WTP estimates more than double across five rounds, OECE WTP estimates are stable across rounds and are always roughly equal to those from the final auction round.

Suggested Citation

  • Jay R. Corrigan & Dinah Pura T. Depositario & Rodolfo M. Nayga, Jr. & Ximing Wu & Tiffany P. Laude, 2009. "Comparing Open-Ended Choice Experiments and Experimental Auctions: An Application to Golden Rice," Working Papers 0901, Kenyon College, Department of Economics.
  • Handle: RePEc:ken:wpaper:0901
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    References listed on IDEAS

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    1. Frode Alfnes, 2007. "Willingness to Pay versus Expected Consumption Value in Vickrey Auctions for New Experience Goods," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(4), pages 921-931.
    2. Anderson, Kym & Jackson, Lee Ann, 2005. "Genetically Modified Rice Adoption: Implications for Welfare and Poverty Alleviation," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 20, pages 771-788.
    3. Alfnes, Frode & Guttormsen, Atle G. & Steine, Gro & Kolstad, Kari, 2005. "Consumers' Willingness To Pay For The Color Of Salmon:A Choice Experiment With Real Economic Incentives," 2005 Annual meeting, July 24-27, Providence, RI 19126, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Gro Steine & Kari Kolstad, 2006. "Consumers' Willingness to Pay for the Color of Salmon: A Choice Experiment with Real Economic Incentives," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(4), pages 1050-1061.
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    Cited by:

    1. Lee, Ji Yong & Han, Doo Bong & Nayga Jr, Rodolfo M. & Lim, Song-Soo, 2011. "Valuing traceability of imported beef in Korea: an experimental auction approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(3), September.
    2. Avitia, Jessica & Costa-Font, Montserrat & Gil, Jose Maria & Lusk, Jayson L., 2011. "A Calibrate Auction-conjoint Experiment to Elicit Consumer Valuation of Sustainable Farming: Is Agro-systems Preservation Relevant?," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114213, European Association of Agricultural Economists.
    3. Domonko, Eammanuel & McFadden, Brandon, 2016. "Tanzanian Willingness-to-Pay for Rice that Decreases the Risk of Severe Visual Impairment," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 230049, Southern Agricultural Economics Association.
    4. Kirsten, Johann F. & Vermeulen, Hester & Van Zyl, Karlien & Du Randt, Gerrie & Du Plessis, H. & Weissnar, Tessa, 2012. "The economic potential for an origin based marketing and certification system for a meat product in South Africa: Perceptions, preferences, and experiments," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 125764, International Association of Agricultural Economists.
    5. Teisl, Mario F. & Roe, Brian E., 2010. "Consumer willingness-to-pay to reduce the probability of retail foodborne pathogen contamination," Food Policy, Elsevier, vol. 35(6), pages 521-530, December.
    6. Waldman, Kurt B. & Kerr, John M. & Isaacs, Krista B., 2014. "Combining participatory crop trials and experimental auctions to estimate farmer preferences for improved common bean in Rwanda," Food Policy, Elsevier, vol. 46(C), pages 183-192.
    7. repec:bla:jageco:v:68:y:2017:i:1:p:123-142 is not listed on IDEAS
    8. Jay R. Corrigan & Andreas C. Drichoutis & Jayson L. Lusk & Rodolfo M. Nayga & Matthew C. Rousu, 2012. "Repeated Rounds with Price Feedback in Experimental Auction Valuation: An Adversarial Collaboration," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(1), pages 97-115.
    9. Hans D. Steur & Jeroen Buysse & Shuyi Feng & Xavier Gellynck, 2013. "Role of Information on Consumers’ Willingness-to-pay for Genetically-modified Rice with Health Benefits: An Application to China," Asian Economic Journal, East Asian Economic Association, vol. 27(4), pages 391-408, December.
    10. Kassas, Bachir & Palma, Marco A. & Zhang, Yvette, 2016. "The role of incentives on preference revelations in auctions versus rankings," Journal of choice modelling, Elsevier, vol. 20(C), pages 73-85.
    11. Saito, Yoko & Saito, Hisamitsu, 2015. "Demand for a Transgenic Food with a Medical Benefit," MPRA Paper 67945, University Library of Munich, Germany.
    12. Colson, Gregory & Huffman, Wallace E. & Rousu, Matthew C., 2011. "Improving the Nutrient Content of Food through Genetic Modification: Evidence from Experimental Auctions on Consumer Acceptance," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 36(2), August.
    13. Gregory Colson & Jay R. Corrigan & Carola Grebitus & Maria L. Loureiro & Matthew C. Rousu, 2016. "Which Deceptive Practices, If Any, Should Be Allowed in Experimental Economics Research? Results from Surveys of Applied Experimental Economists and Students," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(2), pages 610-621.
    14. Alphonce, Roselyne & Alfnes, Frode, 2015. "Eliciting Consumer WTP for Food Characteristics in a Developing Context: Comparison of four methods in a field experiment," Working Paper Series 01-2015, Norwegian University of Life Sciences, School of Economics and Business.
    15. Adewale Oparinde & Abhijit Banerji & Ekin Birol & Paul Ilona, 2016. "Information and consumer willingness to pay for biofortified yellow cassava: evidence from experimental auctions in Nigeria," Agricultural Economics, International Association of Agricultural Economists, vol. 47(2), pages 215-233, March.
    16. Levan Elbakidze & Rodolfo M. Nayga Jr. & Hao Li & Chris McIntosh, 2014. "Value elicitation for multiple quantities of a quasi-public good using open ended choice experiments and uniform price auctions," Agricultural Economics, International Association of Agricultural Economists, vol. 45(2), pages 253-265, March.
    17. Andreas C. Drichoutis & Panagiotis Lazaridis & Rodolfo M. Nayga, 2009. "Would consumers value food-away-from-home products with nutritional labels?," Agribusiness, John Wiley & Sons, Ltd., vol. 25(4), pages 550-575.
    18. Grebitus, Carola & Dumortier, Jerome, 2013. "How much of the error term is explained by psychometric variables? The example of organic produce demand," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150193, Agricultural and Applied Economics Association.
    19. Kassas, Bachir & Palma, Marco & Zhang, Yvette, 2015. "Preference Inconsistencies of a Rational Decision Maker," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 229737, Southern Agricultural Economics Association.
    20. repec:bla:ecinqu:v:55:y:2017:i:1:p:383-396 is not listed on IDEAS
    21. Lee, Ji Yong & Fox, John A., 2016. "The effects of allowing substitutes on bidding behavior in a private value experimental auction," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235900, Agricultural and Applied Economics Association.
    22. Braun, Carola & Rehdanz, Katrin & Schmidt, Ulrich, 2016. "Validity of Willingness to Pay Measures under Preference Uncertainty," Open Access Publications from Kiel Institute for the World Economy 141320, Kiel Institute for the World Economy (IfW).
    23. Tian, Xu & Yu, Xiaohua & Holst, Rainer, 2011. "Applying the payment card approach to estimate the WTP for green food in China," IAMO Forum 2011: Will the "BRICs Decade" Continue? – Prospects for Trade and Growth 23, Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO).
    24. Moser, Riccarda & Raffaelli, Roberta & Notaro, Sandra, 2010. "The Role Of Production Methods In Fruit Purchasing Behaviour: Hypothetical Vs Actual Consumers’ Preferences And Stated Minimum Requirements," 115th Joint EAAE/AAEA Seminar, September 15-17, 2010, Freising-Weihenstephan, Germany 116426, European Association of Agricultural Economists;Agricultural and Applied Economics Association.

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    Keywords

    choice experiments; experimental auctions; golden rice; valuation;

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