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The “more is less” phenomenon in Contingent and Inferred valuation

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  • Stachtiaris, Spiros
  • Drichoutis, Andreas
  • Klonaris, Stathis

Abstract

We examine inconsistencies in preference orderings of the “more is less” kind (Alevy et al. 2011) using the Contingent valuation (CV) and the Inferred valuation (IV) method (Lusk and Norwood 2009a, 2009b). We find that when moving in a familiar market for consumers (i.e., the food market) we only observe weak effects of inconsistencies. In addition, we find that the IV method is no better than the CV method in generating more consistent preference orderings. Surprisingly, we also find that the IV method generates higher valuations than CV, rendering one of its advantages of mitigating social desirability bias questionable.

Suggested Citation

  • Stachtiaris, Spiros & Drichoutis, Andreas & Klonaris, Stathis, 2011. "The “more is less” phenomenon in Contingent and Inferred valuation," MPRA Paper 29456, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:29456
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    References listed on IDEAS

    as
    1. 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.
    2. Shwarz, Norbert, 1999. "Defensible Preferences and the Public: Commentary on "Measuring Constructed Preferences: Towards a Building Code" by Payne, Bettman and Schkade," Journal of Risk and Uncertainty, Springer, vol. 19(1-3), pages 271-272, December.
    3. Slovic, Paul & Lichtenstein, Sarah, 1983. "Preference Reversals: A Broader Perspective," American Economic Review, American Economic Association, vol. 73(4), pages 596-605, September.
    4. Jayson L. Lusk & F. Bailey Norwood, 2009. "An Inferred Valuation Method," Land Economics, University of Wisconsin Press, vol. 85(3), pages 500-514.
    5. John A. List, 2002. "Preference Reversals of a Different Kind: The "More Is Less" Phenomenon," American Economic Review, American Economic Association, vol. 92(5), pages 1636-1643, December.
    6. Grether, David M & Plott, Charles R, 1979. "Economic Theory of Choice and the Preference Reversal Phenomenon," American Economic Review, American Economic Association, vol. 69(4), pages 623-638, September.
    7. Christopher G. Leggett & Naomi S. Kleckner & Kevin J. Boyle & John W. Dufield & Robert Cameron Mitchell, 2003. "Social Desirability Bias in Contingent Valuation Surveys Administered Through In-Person Interviews," Land Economics, University of Wisconsin Press, vol. 79(4), pages 561-575.
    8. Jonathan E. Alevy & John A. List & Wiktor L. Adamowicz, 2011. "How Can Behavioral Economics Inform Nonmarket Valuation? An Example from the Preference Reversal Literature," Land Economics, University of Wisconsin Press, vol. 87(3), pages 365-381.
    9. Darby, Michael R & Karni, Edi, 1973. "Free Competition and the Optimal Amount of Fraud," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 67-88, April.
    10. Gregory, Robin, 1999. "Commentary on "Measuring Constructed Preferences: Towards a Building Code" by Payne, Bettman and Schkade," Journal of Risk and Uncertainty, Springer, vol. 19(1-3), pages 273-275, December.
    11. Rowe, Robert D. & Schulze, William D. & Breffle, William S., 1996. "A Test for Payment Card Biases," Journal of Environmental Economics and Management, Elsevier, vol. 31(2), pages 178-185, September.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    willingness-to-pay (WTP); Contingent Valuation (CV); Inferred Valuation(IV); preference reversals;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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