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Induced-Value Tests of Contingent Valuation Elicitation Mechanisms

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  • Christian Vossler
  • Michael McKee

Abstract

Using an induced-value experimental design that varies whether values for a “good” are certain or uncertain and whether payment is real or hypothetical, this study investigates issues of demand revelation, hypothetical bias, and value uncertainty for four elicitation mechanisms used in contingent valuation surveys: dichotomous choice, dichotomous choice with follow-up certainty question, payment card, and multiple-bounded discrete choice. For all elicitation mechanisms, we find no evidence of hypothetical bias: voting decisions do not vary systematically when payment is hypothetical versus when it is real. Under all design conditions we find the fewest deviations between stated and induced values and the strongest evidence of demand revelation with dichotomous choice. Stated uncertainty in dichotomous choice follow-up and multiple-bounded discrete choice questions does correlate with uncertain induced values, but the signal is noisy. We discuss the implications of our findings for the design of contingent valuation surveys. Copyright Springer Science+Business Media, Inc. 2006

Suggested Citation

  • Christian Vossler & Michael McKee, 2006. "Induced-Value Tests of Contingent Valuation Elicitation Mechanisms," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 35(2), pages 137-168, October.
    • Handle: RePEc:kap:enreec:v:35:y:2006:i:2:p:137-168
    DOI: 10.1007/s10640-006-9011-5
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    More about this item

    Keywords

    contingent valuation; demand revelation; elicitation effects; experiments; hypothetical bias; value uncertainty; willingness to pay; C91; Q51;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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