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It’s the Cost Credibility, Stupid! A Comment on “Consequentiality: A Theoretical and Experimental Exploration of a Single Binary Choice”

Listed author(s):
  • Rheinberger, Christoph
  • Schläpfer, Felix

This comment takes up the discussion about the incentive compatibility of contingent valuation surveys revived by a recent paper of Carson, Groves and List (2014) in this journal. We feel that the conclusions the authors draw from their theoretical and experimental work cannot be generalized to contingent valuation (CV) surveys. We single out the lack of cost credibility as the principal obstacle to incentive compatibility and propose some amendments to the survey protocol that foster the cost credibility of random-bid CV studies.

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File URL: http://www.tse-fr.eu/sites/default/files/TSE/documents/doc/wp/2015/wp_tse_573.pdf
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Paper provided by Toulouse School of Economics (TSE) in its series TSE Working Papers with number 15-573.

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Date of creation: May 2015
Handle: RePEc:tse:wpaper:29292
Contact details of provider: Phone: (+33) 5 61 12 86 23
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  1. Green, Donald & Jacowitz, Karen E. & Kahneman, Daniel & McFadden, Daniel, 1998. "Referendum contingent valuation, anchoring, and willingness to pay for public goods," Resource and Energy Economics, Elsevier, vol. 20(2), pages 85-116, June.
  2. Strong, Aaron & Flores, Nicholas E., 2008. "Estimating the economic benefits of acidic rock drainage clean up using cost shares," Ecological Economics, Elsevier, vol. 65(2), pages 348-355, April.
  3. Walker, Joan & Ben-Akiva, Moshe, 2002. "Generalized random utility model," Mathematical Social Sciences, Elsevier, vol. 43(3), pages 303-343, July.
  4. Johnston, Robert J., 2006. "Is hypothetical bias universal? Validating contingent valuation responses using a binding public referendum," Journal of Environmental Economics and Management, Elsevier, vol. 52(1), pages 469-481, July.
  5. Schlapfer, Felix, 2008. "Contingent valuation: A new perspective," Ecological Economics, Elsevier, vol. 64(4), pages 729-740, February.
  6. Richard Carson & Theodore Groves, 2007. "Incentive and informational properties of preference questions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(1), pages 181-210, May.
  7. Flores, Nicholas E. & Strong, Aaron, 2007. "Cost credibility and the stated preference analysis of public goods," Resource and Energy Economics, Elsevier, vol. 29(3), pages 195-205, September.
  8. Richard T. Carson & Theodore Groves & John A. List, 2014. "Consequentiality: A Theoretical and Experimental Exploration of a Single Binary Choice," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 1(1), pages 171-207.
  9. Stephane Hess & Nesha Beharry-Borg, 2012. "Accounting for Latent Attitudes in Willingness-to-Pay Studies: The Case of Coastal Water Quality Improvements in Tobago," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 52(1), pages 109-131, May.
  10. Schlapfer, Felix & Schmitt, Marcel, 2007. "Anchors, endorsements, and preferences: A field experiment," Resource and Energy Economics, Elsevier, vol. 29(3), pages 229-243, September.
  11. Jerry Hausman, 2012. "Contingent Valuation: From Dubious to Hopeless," Journal of Economic Perspectives, American Economic Association, vol. 26(4), pages 43-56, Fall.
  12. Patricia A. Champ & Nicholas E. Flores & Thomas C. Brown & PJames Chivers, 2002. "Contingent Valuation and Incentives," Land Economics, University of Wisconsin Press, vol. 78(4), pages 591-604.
  13. Thomas Lundhede & Jette Bredahl Jacobsen & Nick Hanley & Niels Strange & Bo Jellesmark Thorsen, 2015. "Incorporating Outcome Uncertainty and Prior Outcome Beliefs in Stated Preferences," Land Economics, University of Wisconsin Press, vol. 91(2), pages 296-316.
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