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Full-Text Articles in Social and Behavioral Sciences
Hypothetical Bias In Dichotomous Choice Contingent Valuation Studies, Michael Ash, James J. Murphy, Thomas H. Stevens
Hypothetical Bias In Dichotomous Choice Contingent Valuation Studies, Michael Ash, James J. Murphy, Thomas H. Stevens
PERI Working Papers
This paper uses a meta-analysis to explore the relationship between hypothetical bias and the price respondents are asked to pay. For public goods, the results clearly indicate a difference in the price elasticity between hypothetical and actual payment conditions. Since the bias increases for larger dollar amounts, any simple guidelines, such as NOAA’s “divide by two” rule of thumb, could be misleading. Future attempts to calibrate contingent valuation responses should reflect this price sensitivity.
A Meta-Analysis Of Hypothetical Bias In Stated Preference Valuation, James J. Murphy, Geoffrey Allen, Thomas H. Stevens, Darryl Weatherhead
A Meta-Analysis Of Hypothetical Bias In Stated Preference Valuation, James J. Murphy, Geoffrey Allen, Thomas H. Stevens, Darryl Weatherhead
PERI Working Papers
Individuals are widely believed to overstate their economic valuation of a good by a factor of two or three. This paper reports the results of a meta-analysis of hypothetical bias in 28 stated preference valuation studies that report monetary willingness-to-pay and that used the same mechanism for eliciting both hypothetical and actual values. The papers generated 83 observations with a median value of the ratio of hypothetical to actual value of 1.35, and the distribution has severe positive skewness. Since a comprehensive theory of hypothetical bias has not been developed, we use a set of explanatory variables based on issues …