IDEAS home Printed from https://ideas.repec.org/a/wly/hlthec/v26y2017i11p1467-1473.html
   My bibliography  Save this article

External Validity of Contingent Valuation: Comparing Hypothetical and Actual Payments

Author

Listed:
  • Mandy Ryan
  • Emmanouil Mentzakis
  • Suthi Jareinpituk
  • John Cairns

Abstract

Whilst contingent valuation is increasingly used in economics to value benefits, questions remain concerning its external validity that is do hypothetical responses match actual responses? We present results from the first within sample field test. Whilst Hypothetical No is always an Actual No, Hypothetical Yes exceed Actual Yes responses. A constant rate of response reversals across bids/prices could suggest theoretically consistent option value responses. Certainty calibrations (verbal and numerical response scales) minimise hypothetical–actual discrepancies offering a useful solution. Helping respondents resolve uncertainty may reduce the discrepancy between hypothetical and actual payments and thus lead to more accurate policy recommendations. Copyright © 2016 John Wiley & Sons, Ltd.

Suggested Citation

  • Mandy Ryan & Emmanouil Mentzakis & Suthi Jareinpituk & John Cairns, 2017. "External Validity of Contingent Valuation: Comparing Hypothetical and Actual Payments," Health Economics, John Wiley & Sons, Ltd., vol. 26(11), pages 1467-1473, November.
    • Handle: RePEc:wly:hlthec:v:26:y:2017:i:11:p:1467-1473
    DOI: 10.1002/hec.3436
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/hec.3436
    Download Restriction: no
    File URL: https://libkey.io/10.1002/hec.3436?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Onwujekwe, Obinna & Hanson, Kara & Fox-Rushby, Julia, 2005. "Do divergences between stated and actual willingness to pay signify the existence of bias in contingent valuation surveys?," Social Science & Medicine, Elsevier, vol. 60(3), pages 525-536, February.
    2. repec:ebl:ecbull:v:3:y:2004:i:6:p:1-13 is not listed on IDEAS
    3. Karen Blumenschein & Glenn C. Blomquist & Magnus Johannesson & Nancy Horn & Patricia Freeman, 2008. "Eliciting Willingness to Pay Without Bias: Evidence from a Field Experiment," Economic Journal, Royal Economic Society, vol. 118(525), pages 114-137, January.
    4. Timothy C. Haab & Kenneth E. McConnell, 2002. "Valuing Environmental and Natural Resources," Books, Edward Elgar Publishing, number 2427.
    5. Glenn Blomquist & Karen Blumenschein & Magnus Johannesson, 2009. "Eliciting Willingness to Pay without Bias using Follow-up Certainty Statements: Comparisons between Probably/Definitely and a 10-point Certainty Scale," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 43(4), pages 473-502, August.
    6. John List & Craig Gallet, 2001. "What Experimental Protocol Influence Disparities Between Actual and Hypothetical Stated Values?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 20(3), pages 241-254, November.
    7. Stirling Bryan & Sue Jowett, 2010. "Hypothetical versus real preferences: results from an opportunistic field experiment," Health Economics, John Wiley & Sons, Ltd., vol. 19(12), pages 1502-1509, December.
    8. Jerry Hausman, 2012. "Contingent Valuation: From Dubious to Hopeless," Journal of Economic Perspectives, American Economic Association, vol. 26(4), pages 43-56, Fall.
    9. Blumenschein, Karen & Johannesson, Magnus & Yokoyama, Krista K. & Freeman, Patricia R., 2001. "Hypothetical versus real willingness to pay in the health care sector: results from a field experiment," Journal of Health Economics, Elsevier, vol. 20(3), pages 441-457, May.
    10. M. R. Bhatia & J. A. Fox-Rushby, 2003. "Validity of Willingness to Pay: hypothetical versus actual payment," Applied Economics Letters, Taylor & Francis Journals, vol. 10(12), pages 737-740.
    11. Joseph Little & Robert Berrens, 2004. "Explaining Disparities between Actual and Hypothetical Stated Values: Further Investigation Using Meta-Analysis," Economics Bulletin, AccessEcon, vol. 3(6), pages 1-13.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Trudeau, Jennifer M. & Alicea-Planas, Jessica & Vásquez, William F., 2020. "The value of COVID-19 tests in Latin America," Economics & Human Biology, Elsevier, vol. 39(C).
    2. Robert J. Johnston & Kevin J. Boyle & Wiktor (Vic) Adamowicz & Jeff Bennett & Roy Brouwer & Trudy Ann Cameron & W. Michael Hanemann & Nick Hanley & Mandy Ryan & Riccardo Scarpa & Roger Tourangeau & Ch, 2017. "Contemporary Guidance for Stated Preference Studies," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(2), pages 319-405.
    3. William F. Vásquez & Jennifer M. Trudeau & Jessica Alicea‐Planas, 2021. "Immediate and informative feedback during a pandemic: Using stated preference analysis to predict vaccine uptake rates," Health Economics, John Wiley & Sons, Ltd., vol. 30(12), pages 3123-3137, December.
    4. Sun, Sizhong, 2022. "The demand for a COVID-19 vaccine," Economics & Human Biology, Elsevier, vol. 46(C).
    5. William F. Vásquez & Jennifer M. Trudeau, 2022. "Willingness to give amid pandemics: a contingent valuation of anticipated nongovernmental immunization programs," International Journal of Health Economics and Management, Springer, vol. 22(1), pages 53-68, March.
    6. David John Mott, 2018. "Incorporating Quantitative Patient Preference Data into Healthcare Decision Making Processes: Is HTA Falling Behind?," The Patient: Patient-Centered Outcomes Research, Springer;International Academy of Health Preference Research, vol. 11(3), pages 249-252, June.
    7. Wudu T Jemberu & Wassie Molla & Tigabu Dagnew & Jonathan Rushton & Henk Hogeveen, 2020. "Farmers’ willingness to pay for foot and mouth disease vaccine in different cattle production systems in Amhara region of Ethiopia," PLOS ONE, Public Library of Science, vol. 15(10), pages 1-12, October.
    8. Laia Soler & Nicolas Borzykowski, 2021. "The costs of celiac disease: a contingent valuation in Switzerland," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(9), pages 1487-1505, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. 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.
    3. Robert J. Johnston & Kevin J. Boyle & Wiktor (Vic) Adamowicz & Jeff Bennett & Roy Brouwer & Trudy Ann Cameron & W. Michael Hanemann & Nick Hanley & Mandy Ryan & Riccardo Scarpa & Roger Tourangeau & Ch, 2017. "Contemporary Guidance for Stated Preference Studies," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(2), pages 319-405.
    4. Loomis, John B., 2014. "2013 WAEA Keynote Address: Strategies for Overcoming Hypothetical Bias in Stated Preference Surveys," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 39(1), pages 1-13, April.
    5. Diriba Abdeta, 2022. "Households' willingness to pay for forest conservation in Ethiopia: A review," Journal of Forest Science, Czech Academy of Agricultural Sciences, vol. 68(11), pages 437-451.
    6. Blomquist, Glenn C. & Coomes, Paul A. & Jepsen, Christopher & Koford, Brandon C. & Troske, Kenneth R., 2014. "Estimating the social value of higher education: willingness to pay for community and technical colleges," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 5(1), pages 3-41, January.
    7. Richard C. Bishop & Kevin J. Boyle, 2019. "Reliability and Validity in Nonmarket Valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 72(2), pages 559-582, February.
    8. Jinkwon Lee & Uk Hwang, 2016. "Hypothetical Bias in Risk Preferences as a Driver of Hypothetical Bias in Willingness to Pay: Experimental Evidence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(4), pages 789-811, December.
    9. Emmanouil Mentzakis & Mandy Ryan & Paul McNamee, 2014. "Modelling Heterogeneity and Uncertainty in Contingent Valuation: an Application to the Valuation of Informal Care," Scottish Journal of Political Economy, Scottish Economic Society, vol. 61(1), pages 1-25, February.
    10. Fifer, Simon & Rose, John M., 2016. "Can you ever be certain? Reducing hypothetical bias in stated choice experiments via respondent reported choice certaintyAuthor-Name: Beck, Matthew J," Transportation Research Part B: Methodological, Elsevier, vol. 89(C), pages 149-167.
    11. Sund, Björn, 2009. "Certainty calibration in contingent valuation - exploring the within-difference between dichotomous choice and open-ended answers as a certainty measure," Working Papers 2009:1, Örebro University, School of Business.
    12. Quainoo, Ruth & Petrolia, Daniel, 2018. "Mitigating Hypothetical Bias: An Application to WTP for Beach Conditions Information," 2018 Annual Meeting, February 2-6, 2018, Jacksonville, Florida 266715, Southern Agricultural Economics Association.
    13. Ana Bobinac, 2019. "Mitigating hypothetical bias in willingness to pay studies: post-estimation uncertainty and anchoring on irrelevant information," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(1), pages 75-82, February.
    14. Henrik Andersson & Mikael Svensson, 2014. "Scale sensitivity and question order in the contingent valuation method," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 57(11), pages 1746-1761, November.
    15. Richard T. Carson, 2011. "Contingent Valuation," Books, Edward Elgar Publishing, number 2489.
    16. Mark A. Andor & Manuel Frondel & Colin Vance, 2017. "Mitigating Hypothetical Bias: Evidence on the Effects of Correctives from a Large Field Study," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(3), pages 777-796, November.
    17. Perni, Ángel & Barreiro-Hurlé, Jesús & Martínez-Paz, José Miguel, 2021. "Contingent valuation estimates for environmental goods: Validity and reliability," Ecological Economics, Elsevier, vol. 189(C).
    18. Stefani, Gianluca & Scarpa, Riccardo & Lombardi, Ginevra V., 2014. "An addendum to: a meta-analysis of hypothethical bias in stated preference valuation," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 3(2), pages 1-10, August.
    19. Mark A. Andor, Manuel Frondel, and Colin Vance, 2017. "Germanys Energiewende: A Tale of Increasing Costs and Decreasing Willingness-To-Pay," The Energy Journal, International Association for Energy Economics, vol. 0(KAPSARC S).
    20. Halkos, George, 2012. "The use of contingent valuation in assessing marine and coastal ecosystems’ water quality: A review," MPRA Paper 42183, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:hlthec:v:26:y:2017:i:11:p:1467-1473. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/5749 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.