IDEAS home Printed from https://ideas.repec.org/a/wly/soecon/v65y1998i1p169-177.html
   My bibliography  Save this article

Experimental Results on Expressed Certainty and Hypothetical Bias in Contingent Valuation

Author

Listed:
  • Karen Blumenschein
  • Magnus Johannesson
  • Glenn C. Blomquist
  • Bengt Liljas
  • Richard M. O'Conor

Abstract

Use of the contingent valuation method is controversial among economists because it is based on hypothetical rather than real choices. Previous experiments have suggested that the commonly used dichotomous choice contingent valuation method leads to hypothetical bias, i.e., overestimates the real willingness to pay. We carried out an experiment to compare the dichotomous choice contingent valuation method with real purchase decisions for a consumer good. We confirm previous findings that hypothetical yes responses overestimate real purchase decisions, but we cannot reject the null hypothesis that definitely sure yes responses correspond to real purchase decisions.

Suggested Citation

  • Karen Blumenschein & Magnus Johannesson & Glenn C. Blomquist & Bengt Liljas & Richard M. O'Conor, 1998. "Experimental Results on Expressed Certainty and Hypothetical Bias in Contingent Valuation," Southern Economic Journal, John Wiley & Sons, vol. 65(1), pages 169-177, July.
    • Handle: RePEc:wly:soecon:v:65:y:1998:i:1:p:169-177
    DOI: 10.1002/j.2325-8012.1998.tb00136.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/j.2325-8012.1998.tb00136.x
    Download Restriction: no
    File URL: https://libkey.io/10.1002/j.2325-8012.1998.tb00136.x?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. Magnus Johannesson & Bengt Liljas & Per-Olov Johansson, 1998. "An experimental comparison of dichotomous choice contingent valuation questions and real purchase decisions," Applied Economics, Taylor & Francis Journals, vol. 30(5), pages 643-647.
    2. Cummings, Ronald G & Elliott, Steven & Harrison, Glenn W & Murphy, James, 1997. "Are Hypothetical Referenda Incentive Compatible?," Journal of Political Economy, University of Chicago Press, vol. 105(3), pages 609-621, June.
    3. Helen R. Neill & Ronald G. Cummings & Philip T. Ganderton & Glenn W. Harrison & Thomas McGuckin, 1994. "Hypothetical Surveys and Real Economic Commitments," Land Economics, University of Wisconsin Press, vol. 70(2), pages 145-154.
    4. Cummings, Ronald G & Harrison, Glenn W & Rutstrom, E Elisabet, 1995. "Homegrown Values and Hypothetical Surveys: Is the Dichotomous Choice Approach Incentive-Compatible?," American Economic Review, American Economic Association, vol. 85(1), pages 260-266, March.
    5. McKinley Blackburn & Glenn W. Harrison & E. Elisabet Rutström, 1994. "Statistical Bias Functions and Informative Hypothetical Surveys," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(5), pages 1084-1088.
    6. Bishop, Richard C. & Heberlein, Thomas A., 1979. "Measuring Values Of Extramarket Goods: Are Indirect Measures Biased?," 1979 Annual Meeting, July 29-August 1, Pullman, Washington 277818, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Peter A. Diamond & Jerry A. Hausman, 1994. "Contingent Valuation: Is Some Number Better than No Number?," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 45-64, Fall.
    8. W. Michael Hanemann, 1994. "Valuing the Environment through Contingent Valuation," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 19-43, Fall.
    9. Champ, Patricia A. & Bishop, Richard C. & Brown, Thomas C. & McCollum, Daniel W., 1997. "Using Donation Mechanisms to Value Nonuse Benefits from Public Goods," Journal of Environmental Economics and Management, Elsevier, vol. 33(2), pages 151-162, June.
    10. John Loomis & Thomas Brown & Beatrice Lucero & George Peterson, 1996. "Improving Validity Experiments of Contingent Valuation Methods: Results of Efforts to Reduce the Disparity of Hypothetical and Actual Willingness to Pay," Land Economics, University of Wisconsin Press, vol. 72(4), pages 450-461.
    11. Richard C. Bishop & Thomas A. Heberlein, 1979. "Measuring Values of Extramarket Goods: Are Indirect Measures Biased?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(5), pages 926-930.
    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. Lusk, Jayson L. & Daniel, M. Scott & Mark, Darrell R. & Lusk, Christine L., 2001. "Alternative Calibration And Auction Institutions For Predicting Consumer Willingess To Pay For Nongenetically Modified Corn Chips," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(1), pages 1-18, July.
    2. Johansson-Stenman , Olof & Svedsäter, Henrik, 2003. "Self Image And Choice Experiments: Hypothetical And Actual Willingness To Pay," Working Papers in Economics 94, University of Gothenburg, Department of Economics.
    3. Penn, Jerrod & Hu, Wuyang & Ye, Tao, 2024. "Efficacy of hypothetical bias mitigation techniques: A cross-country comparison," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    4. Seung Pil Lee, 2022. "The Sports-Based Holistic Development Model: The General Public’s Transformation by Having a Meaningful Story Through Sport," SAGE Open, , vol. 12(4), pages 21582440221, October.
    5. Berck, Peter & Sears, Molly & Taylor, Rebecca L.C. & Trachtman, Carly & Villas-Boas, Sofia B., 2024. "Reduce, reuse, redeem: Deposit-refund recycling programs in the presence of alternatives," Ecological Economics, Elsevier, vol. 217(C).
    6. Goss, Jody & Holcomb, Rodney B. & Ward, Clement E., 2002. "Factors Influencing Consumer Decisions Related To "Natural" Beef In The Southern Plains," Journal of Food Distribution Research, Food Distribution Research Society, vol. 33(1), pages 1-12, March.
    7. Glenn C. Blomquist, 2004. "Self-Protection and Averting Behavior, Values of Statistical Lives, and Benefit Cost Analysis of Environmental Policy," Review of Economics of the Household, Springer, vol. 2(1), pages 89-110, March.
    8. Krčál, Ondřej & Peer, Stefanie & Staněk, Rostislav & Karlínová, Bára, 2019. "Real consequences matter: Why hypothetical biases in the valuation of time persist even in controlled lab experiments," Economics of Transportation, Elsevier, vol. 20(C).
    9. Jerrod Penn & Wuyang Hu, 2023. "Adjusting and Calibrating Elicited Values Based on Follow-up Certainty Questions: A Meta-analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 84(4), pages 919-946, April.
    10. Poe, Gregory L. & Giraud, Kelly L. & Loomis, John B., 2001. "Simple Computational Methods for Measuring the Difference of Empirical Distributions: Application to Internal and External Scope Tests in Contingent Valuation," Staff Papers 121130, Cornell University, Department of Applied Economics and Management.
    11. Winn, Chris & Norwood, F. Bailey & Chung, Chanjin & Ward, Clement E., 2004. "Surveying the Feasibility of a Voluntary Beef Checkoff," 2004 Annual meeting, August 1-4, Denver, CO 20385, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Jiang, Qi & Penn, Jerrod & Hu, Wuyang, 2022. "Real payment priming to reduce potential hypothetical bias," Journal of choice modelling, Elsevier, vol. 45(C).
    13. Obinna Onwujekwe, 2001. "Searching for a better willingness to pay elicitation method in rural Nigeria: the binary question with follow‐up method versus the bidding game technique," Health Economics, John Wiley & Sons, Ltd., vol. 10(2), pages 147-158, March.
    14. Norwood, F. Bailey, 2005. "Can Calibration Reconcile Stated and Observed Preferences?," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 37(1), pages 1-10, April.
    15. Mark A. Andor & Manuel Frondel & Colin Vance, 2017. "Germany’s Energiewende: A Tale of Increasing Costs and Decreasing Willingness-To-Pay," The Energy Journal, , vol. 38(1_suppl), pages 211-228, June.
    16. Newell, Laurienne Whinstanley & Swallow, Stephen K., 2002. "Are Stated Preferences Invariant To The Prospect Of Real-Money Choice?," 2002 Annual meeting, July 28-31, Long Beach, CA 19623, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    17. Satimanon, Thasanee & Weatherspoon, Dave D., 2010. "Hedonic Analysis of Sustainable Food Products," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 13(4), pages 1-17.
    18. Magdalena Brzozowicz & Michał Krawczyk, 2022. "Anchors on prices of consumer goods only hold when decisions are hypothetical," PLOS ONE, Public Library of Science, vol. 17(1), pages 1-23, January.

    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. John K. Horowitz & Kenneth E. McConnell & James J. Murphy, 2013. "Behavioral foundations of environmental economics and valuation," Chapters, in: John A. List & Michael K. Price (ed.), Handbook on Experimental Economics and the Environment, chapter 4, pages 115-156, Edward Elgar Publishing.
    2. Liljas, Bengt & Blumenschein, Karen, 2000. "On hypothetical bias and calibration in cost-benefit studies," Health Policy, Elsevier, vol. 52(1), pages 53-70, May.
    3. Shogren, Jason F., 2006. "Experimental Methods and Valuation," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 19, pages 969-1027, Elsevier.
    4. 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.
    5. Murphy, James J. & Stevens, Thomas H., 2004. "Contingent Valuation, Hypothetical Bias, and Experimental Economics," Agricultural and Resource Economics Review, Cambridge University Press, vol. 33(2), pages 182-192, October.
    6. 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.
    7. Svensson, Mikael, 2006. "The Value of a Statistical Life in Sweden Estimates from Two Studies using the "Certainty Approach" Calibration," Working Papers 2006:6, Örebro University, School of Business, revised 12 May 2009.
    8. 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.
    9. 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.
    10. Smith, V. Kerry & Mansfield, Carol, 1998. "Buying Time: Real and Hypothetical Offers," Journal of Environmental Economics and Management, Elsevier, vol. 36(3), pages 209-224, November.
    11. James Murphy & P. Allen & Thomas Stevens & Darryl Weatherhead, 2005. "A Meta-analysis of Hypothetical Bias in Stated Preference Valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 30(3), pages 313-325, March.
    12. Richard Carson & Nicholas Flores & Norman Meade, 2001. "Contingent Valuation: Controversies and Evidence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 19(2), pages 173-210, June.
    13. Richard T. Carson, 2011. "Contingent Valuation," Books, Edward Elgar Publishing, number 2489.
    14. List, John A. & Shogren, Jason F., 2002. "Calibration of Willingness-to-Accept," Journal of Environmental Economics and Management, Elsevier, vol. 43(2), pages 219-233, March.
    15. Karen Blumenschein & GlennC. 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.
    16. Gregory Poe & Jeremy Clark & Daniel Rondeau & William Schulze, 2002. "Provision Point Mechanisms and Field Validity Tests of Contingent Valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 23(1), pages 105-131, September.
    17. Rodríguez, Elsa Mirta M. & Lacaze, María Victoria & Lupín, Beatriz, 2007. "Willingness to pay for organic food in Argentina: evidence from a consumer survey," Nülan. Deposited Documents 1300, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    18. Veisten, Knut, 2007. "Contingent valuation controversies: Philosophic debates about economic theory," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 36(2), pages 204-232, April.
    19. Bodo Sturm & Joachim Weimann, 2006. "Experiments in Environmental Economics and Some Close Relatives," Journal of Economic Surveys, Wiley Blackwell, vol. 20(3), pages 419-457, July.
    20. Nick Hanley & Felix Schlapfer, "undated". "Calibration of Stated Willingness to Pay for Public Goods with Voting and Tax Liability Data: Provision of Landscape Amenities in Switzerland," Working Papers 2002_2, Business School - Economics, University of Glasgow.

    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:soecon:v:65:y:1998:i:1:p:169-177. 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: https://doi.org/10.1002/(ISSN)2325-8012 .

    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.