Cognitive ability and scale bias in the contingent valuation method

Andersson, Henrik; Svensson, Mikael

doi:10.1007/s10640-007-9137-0

Cited by 29 publications

(25 citation statements)

References 35 publications

(22 reference statements)

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“…Regarding cognitive ability and scale sensitivity we found that a higher score on the cognitive ability test was associated with a higher likelihood of showing scale sensitivity according to theoretical predictions (Andersson and Svensson 2008). Moreover, the results suggested that higher cognitive ability was more important in the "Top-down" compared with the "Bottom-up" approach, indicating that it is more cognitively demanding to give consistent answers in a "Topdown" approach.…”

Section: Discussionmentioning

confidence: 68%

“…A positive correlation was found between cognitive ability and scale sensitivity. This study focus on ordering effects on scale sensitivity and we refer to Andersson and Svensson (2008) for the analysis on cognitive ability and scale sensitivity.…”

Section: The Experiments -Cognitive Ability and A Contingent Valuationmentioning

confidence: 99%

“…Hammitt and Graham (1999) in their review of 25 CVM-studies on mortality risk reductions found that WTP was scale sensitive in most studies, but in no study was it proportional to the risk reduction. Carson et al (2001) suggest that eliciting individuals' preferences for reductions in the probability of death is especially cognitively constraining and recent research have found evidence which suggests that respondents who understand the scenario are more capable of giving answers in line with the theoretical predictions (Corso et al 2001;Alberini et al 2004;Andersson and Svensson 2008).…”

Section: Introductionmentioning

confidence: 99%

“…7 The risks were visualized using a grid containing of 10,000 whites squares where the appropriate number of squares had been blacked out to represent each risk. The visual aid was combined with verbal probability analog 6 For a description of the test of cognitive ability and the questions used, see Andersson and Svensson (2008). The design of the CVM survey is available upon request from the authors.…”

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confidence: 99%

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Scale sensitivity and question order in the contingent valuation method

Andersson

Svensson

2013

Journal of Environmental Planning and Management

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This study examines the effect on respondents' willingness to pay to reduce mortality risk by the order of the question in a stated preference study. Using answers from an experiment conducted on a Swedish sample where respondents' cognitive ability was measured and where they participate in a contingent valuation survey it is found that scale sensitivity is the strongest when respondents are asked about a smaller risk reduction first ("Bottom-up" approach). This contradicts some previous evidence in the literature. It is also found that the respondents' cognitive ability is correlated with their answers being line with theoretical predictions. The latter being important for the validity of the answers. Hence, the results of this paper suggest that scale sensitivity is related to the order of the questions and to respondents' cognitive ability.

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Section: Discussionmentioning

confidence: 68%

Section: The Experiments -Cognitive Ability and A Contingent Valuationmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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confidence: 99%

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Scale sensitivity and question order in the contingent valuation method

Andersson

Svensson

2013

Journal of Environmental Planning and Management

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“…Regarding health risks SP methods have been used to evaluate a wide range of risks, e.g. contaminated water (Adamowicz, Dupont et al 2011), road safety (Andersson and Svensson 2008), and cancer (Hammitt and Haninger 2010). The SP approach offers flexibility in creating specific markets of interests and allows the analysts to control the decision alternatives.…”

Section: Introductionmentioning

confidence: 99%

Valuation of small and multiple health risks: A critical analysis of SP data applied to food and water safety

Andersson

Hole

Svensson

2016

Journal of Environmental Economics and Management

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This study elicits individual preferences for reducing morbidity and mortality risk in the context of an infectious disease (campylobacter) using choice experiments. Respondents are in the survey asked to choose between different policies that, in addition to the two health risks, also vary with respect to source of disease being targeted (food or water), when the policy takes place (in time), and the monetary cost. Our results in our baseline model are in line with expectations; respondents prefer the benefits of the program sooner than later, programs that reduce both the mortality and morbidity risk, and less costly programs. Moreover, our results suggest that respondents prefer water-compared with food-safety programs. However, a main objective of this study is to examine scope sensitivity of mortality risk reductions using a novel approach. Our results from a split-sample design suggest that the value of the mortality risk reduction, defined as the value of a statistical life, is SEK 3 177 (USD 483 million) and SEK 50 million (USD 8 million), respectively, in our two sub-samples. This result cast doubt on the standard scope sensitivity tests in choice experiments, and the results also cast doubt on the validity and reliability of VSL estimates based on stated preference (and revealed preference) studies in general. This is important due to the large empirical literature on non-market evaluation and the elicited values' central role in policy making, such as benefit-cost analysis.

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Cognitive Ability and Bidding Behavior in Second Price Auctions: An Experimental Study

Lee¹,

Nayga²,

Deck³

et al. 2020

American J Agri Economics

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This paper examines what connection, if any, there is between cognitive ability and bidding strategy in second price auctions. Despite truthful revelations being a weakly dominant strategy, previous experiments have consistently observed overbidding, which makes the use of such auctions for inferring homegrown values problematic. Examining the effect of cognitive ability is important, as it may help identify when one can reliably recover values from observed bids. The results indicate that more cognitively able subjects behave in closer accordance with theory, and that cognitive ability partially explains heterogeneity in bidding behavior. Our results suggest that considering subjects' cognitive ability in homegrown valuation studies can help identify the true underlying demand conditions.

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Cognitive ability and scale bias in the contingent valuation method

Abstract: Cognitive ability, Contingent valuation, Mortality risk, Near-proportionality, Scale bias, D80, I10, Q51,

Cited by 29 publications

References 35 publications

Scale sensitivity and question order in the contingent valuation method

Scale sensitivity and question order in the contingent valuation method

Valuation of small and multiple health risks: A critical analysis of SP data applied to food and water safety

Cognitive Ability and Bidding Behavior in Second Price Auctions: An Experimental Study

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