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Contingent valuation and actual payment for voluntarily provided passive-use values: Assessing the effect of an induced truth-telling mechanism and elicitation formats

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  • Knut Veisten
  • Ståle Navrud

Abstract

A fundamental question about the contingent valuation (CV) method is to what degree it predicts actual payments (AP). This has particularly been an intriguing matter related to voluntary provision of public goods representing primarily passive-use values. This paper reports the results from such a CV-AP comparison. Applying a voluntary payment mechanism there exists a theoretical expectation of upward bias in CV estimates and downward bias in AP. This study applied an induced truth-telling mechanism in one treatment group to assess the hypothetical bias effect in CV. The CV estimates in this treatment group were significantly lower than in the group that did not face this mechanism. But this effect was limited to those responding/acting to dichotomous choice, not affecting those responding to open-ended questions about willingness to pay.

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  • Knut Veisten & Ståle Navrud, 2006. "Contingent valuation and actual payment for voluntarily provided passive-use values: Assessing the effect of an induced truth-telling mechanism and elicitation formats," Applied Economics, Taylor & Francis Journals, vol. 38(7), pages 735-756.
    • Handle: RePEc:taf:applec:v:38:y:2006:i:7:p:735-756
    DOI: 10.1080/00036840500400152
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    1. repec:sae:envval:v:22:y:2013:i:1:p:59-79 is not listed on IDEAS
    2. Frode Alfnes & Chengyan Yue & Helen H. Jensen, 2010. "Cognitive dissonance as a means of reducing hypothetical bias," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 37(2), pages 147-163, June.
    3. Lindhjem, Henrik & Navrud, Ståle, 2008. "How reliable are meta-analyses for international benefit transfers?," Ecological Economics, Elsevier, vol. 66(2-3), pages 425-435, June.
    4. Lindhjem, Henrik, 2007. "20 years of stated preference valuation of non-timber benefits from Fennoscandian forests: A meta-analysis," Journal of Forest Economics, Elsevier, vol. 12(4), pages 251-277, February.
    5. Milad Haghani & Michiel C. J. Bliemer & John M. Rose & Harmen Oppewal & Emily Lancsar, 2021. "Hypothetical bias in stated choice experiments: Part I. Integrative synthesis of empirical evidence and conceptualisation of external validity," Papers 2102.02940, arXiv.org.
    6. Haghani, Milad & Bliemer, Michiel C.J. & Rose, John M. & Oppewal, Harmen & Lancsar, Emily, 2021. "Hypothetical bias in stated choice experiments: Part II. Conceptualisation of external validity, sources and explanations of bias and effectiveness of mitigation methods," Journal of choice modelling, Elsevier, vol. 41(C).
    7. Kanya, Lucy & Sanghera, Sabina & Lewin, Alex & Fox-Rushby, Julia, 2019. "The criterion validity of willingness to pay methods: A systematic review and meta-analysis of the evidence," Social Science & Medicine, Elsevier, vol. 232(C), pages 238-261.
    8. Godwin Kofi Vondolia & Håkan Eggert & Ståle Navrud & Jesper Stage, 2014. "What do respondents bring to contingent valuation? A comparison of monetary and labour payment vehicles," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 3(3), pages 253-267, November.
    9. Stenger, Anne & Harou, Patrice & Navrud, Ståle, 2009. "Valuing environmental goods and services derived from the forests," Journal of Forest Economics, Elsevier, vol. 15(1-2), pages 1-14, January.
    10. Olivier Chanel & Khaled Makhloufi & Mohammad Abu-Zaineh, 2017. "Can a Circular Payment Card Format Effectively Elicit Preferences? Evidence From a Survey on a Mandatory Health Insurance Scheme in Tunisia," Applied Health Economics and Health Policy, Springer, vol. 15(3), pages 385-398, June.
    11. Kanya, Lucy & Saghera, Sabina & Lewin, Alex & Fox-Rushby, Julia, 2019. "The criterion validity of willingness to pay methods: a systematic review and meta-analysis of the evidence," LSE Research Online Documents on Economics 100741, London School of Economics and Political Science, LSE Library.
    12. Godwin Kofi Vondolia & Håkan Eggert & Ståle Navrud & Jesper Stage, 2014. "What do respondents bring to contingent valuation? A comparison of monetary and labour payment vehicles," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 3(3), pages 253-267, November.
    13. Ståle Navrud & Jon Strand, 2018. "Valuing Global Ecosystem Services: What Do European Experts Say? Applying the Delphi Method to Contingent Valuation of the Amazon Rainforest," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 70(1), pages 249-269, May.
    14. Jang, Jinyong & Lee, Jongsu & Yoo, Seung-Hoon, 2014. "The public׳s willingness to pay for securing a reliable natural gas supply in Korea," Energy Policy, Elsevier, vol. 69(C), pages 3-13.
    15. Akter, Sonia & Brouwer, Roy & Brander, Luke & van Beukering, Pieter, 2009. "Respondent uncertainty in a contingent market for carbon offsets," Ecological Economics, Elsevier, vol. 68(6), pages 1858-1863, April.
    16. Maria Antonieta Cunha-e-Sa & Til Dietrich & Ana Faria & Luis Catela Nunes & Margarida Ortigao & Renato Rosa & Carina Vieira da Silva, 2023. "Crowdfunding vs. Taxes: Does the payment vehicle influence WTP for Ecosystem Services protection?," Nova SBE Working Paper Series wp657, Universidade Nova de Lisboa, Nova School of Business and Economics.
    17. Ojea, Elena & Loureiro, Maria L., 2011. "Identifying the scope effect on a meta-analysis of biodiversity valuation studies," Resource and Energy Economics, Elsevier, vol. 33(3), pages 706-724, September.

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