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Beyond the single binary choice format for eliciting willingness to accept: Evidence from a field study on onshore wind farms

Author

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  • Fanghella, Valeria
  • Fezzi, Carlo
  • Schleich, Joachim
  • Sebi, Carine

Abstract

This study assesses the incentive compatibility of different elicitation formats for estimating willingness to accept (WTA) in the field. We assess the convergent validity of standard and theorydriven (i.e. based on mechanism-design theory) versions of the double-bounded binary choice (DB) and the open-ended (OE) formats against the single-binary choice (SBC). Our empirical application, developed in collaboration with a major energy company, is based on estimating compensation for the installation of wind farms in respondents' municipalities of residence. We find strong evidence against convergent validity for both versions of the OE format. In comparison, both versions of the DB format, especially the theory-driven version, yield WTA estimates similar to those of the SBC, ranging from near zero for supporters of wind power to €1500-€1800 for opponents. Finally, we introduce a novel econometric approach that allows the utility of compensation to be non-linear when estimating WTA (and WTP) from binary choices.

Suggested Citation

  • Fanghella, Valeria & Fezzi, Carlo & Schleich, Joachim & Sebi, Carine, 2025. "Beyond the single binary choice format for eliciting willingness to accept: Evidence from a field study on onshore wind farms," Ruhr Economic Papers 1184, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:331884
    DOI: 10.4419/96973369
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    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D60 - Microeconomics - - Welfare Economics - - - General
    • 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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