Do Reminders of Substitutes and Budget Constraints Influence Contingent Valuation Estimates?

Loomis, John B.; González-Cabán, Armando; Gregory, Robin

doi:10.2307/3146643

Cited by 139 publications

(48 citation statements)

References 10 publications

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“…In a mail survey asking people to value old-growth forests in Oregon, they find that such a reminder had an insignificant effect. Neill et al (1994) finds an analogous result: reminding subjects of the value of alternative environmental goods did not change response rates ; and a similar result is found by Loomis et al (1994). The replication by Kotchen and Reiling (1999); Blomquist (1995, 1999) however shows this leads to narrower intervals of estimated preferences when applied to goods with which subjects are less familiar.…”

Section: The Economics Of Preference Revelationsupporting

confidence: 52%

“…In a seminal contribution to the more specific field of preference valuation, the National Oceanic and Atmospheric Administration (NOAA) recommended to remind subjects about their actual budget constraint (Arrow et al, 1993). Loomis et al (1994) test the effectiveness of reminding subjects of their budget constraints and substitute goods, prior to elicitation. In a mail survey asking people to value old-growth forests in Oregon, they find that such a reminder had an insignificant effect.…”

Section: The Economics Of Preference Revelationmentioning

confidence: 99%

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Social Psychology and Environmental Economics: A New Look at ex ante Corrections of Biased Preference Evaluation

Jacquemet

James

Luchini

et al. 2011

Environ Resource Econ

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Environmental economics is now a long standing field of research; much has been learned on how environmental policy can use incentives to drive individual behaviors. Among the many examples, preference elicitation is the most discussed case in which incentives fail to accurately implement efficient behavior. Using this as our motivating example, herein we explore the cross-fertilization between environmental economics and social psychology . We first review how the lessons drawn from social psychology helped address the hypothetical bias issue. We then turn to the future of this process by focusing on how cheap talk scripts influence preference elicitation. Our experimental results shows CT scripts work through persuasion -i.e. changes mind, but poorly changes actions. In that sense, preference elicitation still lacks a way of making communication binding -i.e. a way to alter intrinsic motivation of subjects to behave truthfully. Keywords:Social psychology, Commitment, Persuasive communication, Preference elicitation JEL Classification: C9; H4; Q5 Résumé L'économie de l'environnement a depuis longtemps permis de mettre en évidence les moyens par lesquels les politiques publiques menées dans ce domaine peuvent s'appuyer sur les incitations pour orienter les comportements. Les méthodes de révélation des préférences restent cependant l'un des exemples les plus étudiés de défaillance des incitations. En s'appuyant sur cette illustration, cet article propose une synthèse des progrès réalisés en économie de l'environnement grâce à l'intégration des résultats issus de la psychologie sociale. La première partie de l'article propose une revue des méthodes issues de cette discipline et destinées à corriger le biais hypothétique. La seconde partie s'appuie sur une expérience en laboratoire pour évaluer la capacité des scripts de cheap talk à résoudre ce problème. Les comportements observés montrent que les scripts de cheap talk influencent les comportements par un effet de persuasion -i.e. agissent sur les intentions, mais n'affectent que faiblement les actions. En ce sens, les méthodes de révélation des préférences souffrent toujours du manque d'une méthode de communication engageante -i.e. permettant d'affecter la motivation intrinsèque des individus à révéler leurs préférences vraies.

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Section: The Economics Of Preference Revelationsupporting

confidence: 52%

Section: The Economics Of Preference Revelationmentioning

confidence: 99%

Social Psychology and Environmental Economics: A New Look at ex ante Corrections of Biased Preference Evaluation

Jacquemet

James

Luchini

et al. 2011

Environ Resource Econ

View full text Add to dashboard Cite

show abstract

“…For more detail, see our discussion paper ''Obtaining Unbiased Contingent Values: Further Tests of Entreaties to Avoid Hypothetical Bias,'' available at: http://www.fs.fed.us/rm/value/docs/dp-01-1.pdf. referenda examples, see [4,14]. However, unlike our study, most contingent valuation studies use a wide range of payment amounts.…”

Section: Discussionmentioning

confidence: 93%

“…An early version of this was to remind respondents of their budget constraint, but this approach proved to be largely ineffective [14,15]. This paper tests an approach similar to the budgetary reminder, in that it attempts to get respondents to avoid over-estimations, but it employs a much more direct attack on hypothetical bias.…”

Section: Article In Pressmentioning

confidence: 99%

Further tests of entreaties to avoid hypothetical bias in referendum contingent valuation

Brown

Ajzen

Hrubes

2003

Journal of Environmental Economics and Management

121

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Over-estimation of willingness to pay in contingent markets has been attributed largely to hypothetical bias. One promising approach for avoiding hypothetical bias is to tell respondents enough about such bias that they self-correct for it. A script designed for this purpose by Cummings and Taylor was used in hypothetical referenda that differed in payment amount. In comparisons with behavior observed in otherwise identical real payment referenda, the script worked remarkably well at higher payment levels (dropping the likelihood of a yes vote to the level obtained in separate sample real referenda), but less well at a lower payment level. The repeated success of the script at higher payment amounts is a clear sign that additional research is warranted-research that will bring us a more complete understanding of how the entreaty works. This research may need to explore its workings at the individual respondent level. r

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“…For counter results, see Boyle, Reiling, andPhillips 1990, andLoomis, GonzalezCaban, andGregory 1994. 3. The model can also be extended to the case where the agent is uncertain regarding utility she would receive from the improvement.…”

Section: Endnotesmentioning

confidence: 99%

Willingness to Pay and the Cost of Commitment: An Empirical Specification and Test

Corrigan

Kling

Zhao

2007

Environ Resource Econ

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In a static setting, willingness to pay for an environmental improvement is equal to compensating variation. However, in a dynamic setting characterized by uncertainty, irreversibility, and the potential for learning, willingness to pay may also contain an option value. In this paper, we incorporate the dynamic nature of the value formulation process into a study using a contingent valuation method, designed to measure the value local residents assign to a north-central Iowa lake. Our results show that willingness to pay is highly sensitive to the potential for future learning. Respondents offered the opportunity to delay their purchasing decisions until more information became available were willing to pay significantly less for improved water quality than those who faced a now-or-never decision. The results suggest that welfare analysts should take care to accurately represent the potential for future learning. KeywordsClear Lake, contingent valuation, water quality, willingness to pay AbstractIn a static setting, willingness to pay for an environmental improvement is equal to

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Do Reminders of Substitutes and Budget Constraints Influence Contingent Valuation Estimates?

Cited by 139 publications

References 10 publications

Social Psychology and Environmental Economics: A New Look at ex ante Corrections of Biased Preference Evaluation

Social Psychology and Environmental Economics: A New Look at ex ante Corrections of Biased Preference Evaluation

Further tests of entreaties to avoid hypothetical bias in referendum contingent valuation

Willingness to Pay and the Cost of Commitment: An Empirical Specification and Test

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