Anchoring Effects, Survey Conditions, and Respondents' Characteristics: Contingent Valuation of Uncertain Environmental Changes

Contingent valuation (CV) is a social survey method for the economic evaluation of policy. In CV, uncertainty in policy outcomes is thought to disturb the rational choices of respondents and cause the problem of anchoring. Knowledge of the factors affecting the magnitude of anchoring effects is limited. The current study evaluates the severity of anchoring effects under some typical settings of CV. It finds that the occurrence of anchoring effects is independent of whether a face-to-face interview or mail method is chosen. Choosing donation or taxation as a vehicle of payment does not change the severity of anchoring effects. Female respondents and low-income respondents are more susceptible to anchoring effects compared with other respondents. Respondents with intermediate knowledge on the subject in question are found to be most susceptible to anchoring effects. This suggests the strength of anchoring should not be a simple increasing function of the levels of uncertainty about the policy benefit in question. The results can be used to improve the survey technique of CV. In addition, they provide some insight into anchoring in actual transactions, given the similarity between the CV procedure and the choice situations faced by consumers.