IDEAS home Printed from https://ideas.repec.org/p/zbw/vfsc15/113023.html

Violations of scale compatibility: results from pricing tasks and choice tasks in choice experiments

Author

Listed:
  • Merk, Christine
  • Rehdanz, Katrin
  • Schmidt, Ulrich
  • Schröder, Carsten

Abstract

According to rational choice theory, preference orderings should be invariant with respect to the elicitation procedure. The contingent trade-off model (Tversky et al., 1988), however, argues that if an attribute of decision alterna-tives is also used as response mode (scale compatibility), then the attribute will be weighted more heavily. We propose a two-stage design for a systemat-ic assessment of how scale compatibility impacts willingness to pay (WTP) es-timates in choice experiments. At the first stage, a pricing task is implemented. Respondents face two alternative goods. For one good, the price is given. For the alternative good, respondents state the price (WTP) that makes them indifferent between the alternatives. In the second stage, a choice task is implemented: another group of respondents makes pairwise choices between two alternative goods with the price being one of several attributes. Our empirical findings support the contingent trade-off model, as pricing tasks yield systematically lower WTP estimates than choice tasks. While the trade-offs between the other attributes do not differ between the pricing and the choice task. Thus, in the choice task the weight shifts away from the price attribute but does not change the relative weight of the other attributes.

Suggested Citation

  • Merk, Christine & Rehdanz, Katrin & Schmidt, Ulrich & Schröder, Carsten, 2015. "Violations of scale compatibility: results from pricing tasks and choice tasks in choice experiments," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113023, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc15:113023
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/113023/1/VfS_2015_pid_190.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Scarpa, Riccardo & Willis, Ken, 2010. "Willingness-to-pay for renewable energy: Primary and discretionary choice of British households' for micro-generation technologies," Energy Economics, Elsevier, vol. 32(1), pages 129-136, January.
    2. Clark, Jeremy & Friesen, Lana, 2008. "The causes of order effects in contingent valuation surveys: An experimental investigation," Journal of Environmental Economics and Management, Elsevier, vol. 56(2), pages 195-206, September.
    3. I J Bateman & I H Langford, 1997. "Budget-Constraint, Temporal, and Question-Ordering Effects in Contingent Valuation Studies," Environment and Planning A, , vol. 29(7), pages 1215-1228, July.
    4. Fredrik Carlsson & Peter Frykblom & Carl Lagerkvist, 2007. "Preferences with and without prices - does the price attribute affect behavior in stated preference surveys?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 38(2), pages 155-164, October.
    5. repec:aen:journl:2000v21-04-a01 is not listed on IDEAS
    6. Mikolaj Czajkowski & Marek Giergiczny & William H. Greene, 2014. "Learning and Fatigue Effects Revisited: Investigating the Effects of Accounting for Unobservable Preference and Scale Heterogeneity," Land Economics, University of Wisconsin Press, vol. 90(2), pages 324-351.
    7. Attema, Arthur E. & Brouwer, Werner B.F., 2013. "In search of a preferred preference elicitation method: A test of the internal consistency of choice and matching tasks," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 126-140.
    8. Morten Mørkbak & Tove Christensen & Dorte Gyrd-Hansen, 2010. "Choke Price Bias in Choice Experiments," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 45(4), pages 537-551, April.
    9. Fouquet, Roger, 1998. "The United Kingdom demand for renewable electricity in a liberalised market," Energy Policy, Elsevier, vol. 26(4), pages 281-293, March.
    10. Eikeland, Per Ove, 1998. "Electricity market liberalisation and environmental performance: Norway and the UK," Energy Policy, Elsevier, vol. 26(12), pages 917-927, October.
    11. Batley, S. L. & Colbourne, D. & Fleming, P. D. & Urwin, P., 2001. "Citizen versus consumer: challenges in the UK green power market," Energy Policy, Elsevier, vol. 29(6), pages 479-487, May.
    12. repec:aen:journl:2009v30-02-a04 is not listed on IDEAS
    13. Hensher, David A. & Shore, Nina & Train, Kenneth, 2014. "Willingness to pay for residential electricity supply quality and reliability," Applied Energy, Elsevier, vol. 115(C), pages 280-292.
    14. Campbell, Danny & Hensher, David A. & Scarpa, Riccardo, 2014. "Bounding WTP distributions to reflect the ‘actual’ consideration set," Journal of choice modelling, Elsevier, vol. 11(C), pages 4-15.
    15. Zarnikau, Jay, 2003. "Consumer demand for `green power' and energy efficiency," Energy Policy, Elsevier, vol. 31(15), pages 1661-1672, December.
    16. Roland Menges & Carsten Schroeder & Stefan Traub, 2005. "Altruism, Warm Glow and the Willingness-to-Donate for Green Electricity: An Artefactual Field Experiment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 31(4), pages 431-458, August.
    17. Boyle Kevin J. & Welsh Michael P. & Bishop Richard C., 1993. "The Role of Question Order and Respondent Experience in Contingent-Valuation Studies," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages 80-99, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Grösche, Peter & Schröder, Carsten, 2011. "Eliciting public support for greening the electricity mix using random parameter techniques," Energy Economics, Elsevier, vol. 33(2), pages 363-370, March.
    2. Peter Grösche & Carsten Schröder, 2010. "Eliciting Public Support for Greening the Electricity Mix Using Random Parameter Techniques," Ruhr Economic Papers 0233, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    3. Longo, Alberto & Markandya, Anil & Petrucci, Marta, 2008. "The internalization of externalities in the production of electricity: Willingness to pay for the attributes of a policy for renewable energy," Ecological Economics, Elsevier, vol. 67(1), pages 140-152, August.
    4. Merk, Christine & Rehdanz, Katrin & Schröder, Carsten, 2019. "How consumers trade off supply security and green electricity: Evidence from Germany and Great Britain," Energy Economics, Elsevier, vol. 84(S1).
    5. van Putten, Marloes & Lijesen, Mark & Özel, Tanju & Vink, Nancy & Wevers, Harm, 2014. "Valuing the preferences for micro-generation of renewables by househoulds," Energy, Elsevier, vol. 71(C), pages 596-604.
    6. Fang, Xingming & Wang, Lu & Sun, Chuanwang & Zheng, Xuemei & Wei, Jing, 2021. "Gap between words and actions: Empirical study on consistency of residents supporting renewable energy development in China," Energy Policy, Elsevier, vol. 148(PA).
    7. Zorić, Jelena & Hrovatin, Nevenka, 2012. "Household willingness to pay for green electricity in Slovenia," Energy Policy, Elsevier, vol. 47(C), pages 180-187.
    8. Mewton, Ross T. & Cacho, Oscar J., 2011. "Green Power voluntary purchases: Price elasticity and policy analysis," Energy Policy, Elsevier, vol. 39(1), pages 377-385, January.
    9. Soon, Jan-Jan & Ahmad, Siti-Aznor, 2015. "Willingly or grudgingly? A meta-analysis on the willingness-to-pay for renewable energy use," Renewable and Sustainable Energy Reviews, Elsevier, vol. 44(C), pages 877-887.
    10. Diaz-Rainey, Ivan & Ashton, John K., 2008. "Stuck between a ROC and a hard place? Barriers to the take up of green energy in the UK," Energy Policy, Elsevier, vol. 36(8), pages 3043-3051, August.
    11. Dagher, Leila & Bird, Lori & Heeter, Jenny, 2017. "Residential green power demand in the United States," Renewable Energy, Elsevier, vol. 114(PB), pages 1062-1068.
    12. Oerlemans, Leon A.G. & Chan, Kai-Ying & Volschenk, Jako, 2016. "Willingness to pay for green electricity: A review of the contingent valuation literature and its sources of error," Renewable and Sustainable Energy Reviews, Elsevier, vol. 66(C), pages 875-885.
    13. Herbes, Carsten & Friege, Christian & Baldo, Davide & Mueller, Kai-Markus, 2015. "Willingness to pay lip service? Applying a neuroscience-based method to WTP for green electricity," Energy Policy, Elsevier, vol. 87(C), pages 562-572.
    14. Mark A. Andor & Manuel Frondel & Colin Vance, 2017. "Mitigating Hypothetical Bias: Evidence on the Effects of Correctives from a Large Field Study," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(3), pages 777-796, November.
    15. Broberg, Thomas & Daniel, Aemiro Melkamu & Persson, Lars, 2021. "Household preferences for load restrictions: Is there an effect of pro-environmental framing?," Energy Economics, Elsevier, vol. 97(C).
    16. Heng, Yan & Lu, Chao-Lin & Yu, Luqing & Gao, Zhifeng, 2020. "The heterogeneous preferences for solar energy policies among US households," Energy Policy, Elsevier, vol. 137(C).
    17. Zhang, Lei & Wu, Yang, 2012. "Market segmentation and willingness to pay for green electricity among urban residents in China: The case of Jiangsu Province," Energy Policy, Elsevier, vol. 51(C), pages 514-523.
    18. Edyta Ropuszyńska-Surma & Magdalena Węglarz, 2018. "Profiling End User of Renewable Energy Sources among Residential Consumers in Poland," Sustainability, MDPI, vol. 10(12), pages 1-21, November.
    19. Franceschinis, Cristiano & Thiene, Mara & Scarpa, Riccardo & Rose, John & Moretto, Michele & Cavalli, Raffaele, 2017. "Adoption of renewable heating systems: An empirical test of the diffusion of innovation theory," Energy, Elsevier, vol. 125(C), pages 313-326.
    20. Ek, Kristina & Söderholm, Patrik, 2008. "Norms and economic motivation in the Swedish green electricity market," Ecological Economics, Elsevier, vol. 68(1-2), pages 169-182, December.

    More about this item

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D60 - Microeconomics - - Welfare Economics - - - General
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:vfsc15:113023. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/vfsocea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.