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Full-Text Articles in Social and Behavioral Sciences
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 …