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What is the Causal Impact of Knowledge on Preferences in Stated Preference Studies?

Author

Listed:
  • Jacob LaRiviere

    () (Department of Economics, University of Tennessee)

  • Mikolaj Czajkowski

    () (Faculty of Economic Sciences, University of Warsaw)

  • Nick Hanley

    () (Department of Geography and Sustainable Development, University of St. Andrews)

  • Katherine Simpson

    () (Economics Division, University of Stirling, Scotland)

Abstract

This paper reports the results of a stated preference experiment designed to test for how information provided in a survey affects knowledge, and how knowledge affects preferences for a public good. A novel experimental design allows us to elicit subjects’ ex ante knowledge levels about a good’s attributes, exogenously vary how much new objective information about these attributes we provide to subjects, elicit subjects’ valuation for the good, and elicit posterior knowledge states about the same attributes. We find evidence of incomplete learning and fatigue: as subjects are told more information, their marginal learning rates decrease. We find there is no marginal impact of knowledge on the mean nor the variance of WTP for changes in the environmental good; but that ex ante knowledge does affect stated WTP. Our results are consistent with preference formation models of confirmation bias, costly search, or timing differences in learning and preference formation. Our results raise questions about the purpose and effects of providing information in stated preference studies.

Suggested Citation

  • Jacob LaRiviere & Mikolaj Czajkowski & Nick Hanley & Katherine Simpson, 2016. "What is the Causal Impact of Knowledge on Preferences in Stated Preference Studies?," Working Papers 2016-12, Faculty of Economic Sciences, University of Warsaw.
  • Handle: RePEc:war:wpaper:2016-12
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    References listed on IDEAS

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    Keywords

    Learning; Information; Behavioral Economics; Decision Making Under Uncertainty;

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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