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Testing Kahneman's Attitudinal WTP Hypothesis

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  • Ryan, Anthony M.
  • Spash, Clive L.

Abstract

A psychological interpretation of willingness to pay (WTP) bids arising from the Contingent Valuation Method (CVM) claims they represent a general contribution towards environmental causes rather than a personal economic valuation. Yet the evidence supporting this contribution model has been criticised for using group mean correlations to draw conclusions about individual motives. This paper avoids this problem by examining motives at an individual level. Evidence reported shows the need to qualify the role of the attitudinal explanation. Some, but not all, positive WTP bids are found to be based on contributory rather than economic motives, while the decision to bid zero or positive appears to represent a general psychological appraisal rather than being purely related to attitudes.

Suggested Citation

  • Ryan, Anthony M. & Spash, Clive L., 2010. "Testing Kahneman's Attitudinal WTP Hypothesis," MPRA Paper 22468, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:22468
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    File URL: https://mpra.ub.uni-muenchen.de/22468/1/MPRA_paper_22468.pdf
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    References listed on IDEAS

    as
    1. Whynes, David K. & Frew, Emma J. & Philips, Zoe N. & Covey, Judith & Smith, Richard D., 2007. "On the numerical forms of contingent valuation responses," Journal of Economic Psychology, Elsevier, vol. 28(4), pages 462-476, August.
    2. Anthony Ryan & Clive L Spash, 2008. "Measuring “Awareness of Environmental Consequences”: Two Scales and Two Interpretations," Socio-Economics and the Environment in Discussion (SEED) Working Paper Series 2008-10, CSIRO Sustainable Ecosystems.
    3. Kahneman, Daniel & Ritov, Ilana & Schkade, David A, 1999. "Economic Preferences or Attitude Expressions?: An Analysis of Dollar Responses to Public Issues," Journal of Risk and Uncertainty, Springer, vol. 19(1-3), pages 203-235, December.
    4. Kahneman, Daniel & Ritov, Ilana, 1994. "Determinants of Stated Willingness to Pay for Public Goods: A Study in the Headline Method," Journal of Risk and Uncertainty, Springer, vol. 9(1), pages 5-38, July.
    5. Ajzen, Icek, 1991. "The theory of planned behavior," Organizational Behavior and Human Decision Processes, Elsevier, vol. 50(2), pages 179-211, December.
    6. David K. Whynes & Zoë Philips & Emma Frew, 2005. "Think of a number… any number?," Health Economics, John Wiley & Sons, Ltd., vol. 14(11), pages 1191-1195.
    7. Payne, John W & Bettman, James R & Schkade, David A, 1999. "Measuring Constructed Preferences: Towards a Building Code," Journal of Risk and Uncertainty, Springer, vol. 19(1-3), pages 243-270, December.
    8. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-1458, December.
    9. Nickerson Carol A. E., 1995. "Does Willingness to Pay Reflect the Purchase of Moral Satisfaction? A Reconsideration of Kahneman and Knetsch," Journal of Environmental Economics and Management, Elsevier, vol. 28(1), pages 126-133, January.
    10. Clive L. Spash, 2006. "Non-Economic Motivation for Contingent Values: Rights and Attitudinal Beliefs in the Willingness To Pay for Environmental Improvements," Land Economics, University of Wisconsin Press, vol. 82(4), pages 602-622.
    11. Kahneman, Daniel & Schkade, David & Sunstein, Cass R, 1998. "Shared Outrage and Erratic Awards: The Psychology of Punitive Damages," Journal of Risk and Uncertainty, Springer, vol. 16(1), pages 49-86, April.
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    Keywords

    Contingent Valuation Method; Social Psychology; Environmental Valuation;

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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