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

Abstract

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

The Influence of Collective Action on the Demand for Voluntary Climate Change Mitigation in Hypothetical and Real Situations

“…The effect of cheap talk is, however, ambiguous in the literature. While some studies find that hypothetical bias is reduced (Aadland and Caplan 2003, Brown et al 2003, Champ at al. 2009, Moser et al 2014 other studies find no effect of cheap talk (Blumenschein et al 2008) or that it even exacerbates hypothetical bias Brown 2009, Aadland andCaplan 2006).…”

Testing the Effectiveness of Certainty Scales, Cheap Talk, and Dissonance-Minimization in Reducing Hypothetical Bias in Contingent Valuation Studies

“…Cummings and Taylor's (1999) paper stimulated several other tests of cheap talk scripts. Brown et al (2003), in another public good referendum study with student subjects, tested the Cummings and Taylor (1999) cheap talk script at several bid levels. They found that the script was effective at an $8 bid level, but was less effective or ineffective at lower bid levels.…”

A Comparison of Induced Value and Home-Grown Value Experiments to Test for Hypothetical Bias in Contingent Valuation

“…The cheap talk approach (Cummings and Taylor 1999), for example, is a popular calibration technique in which the hypothetical bias problem is described to subjects. Yet, the effectiveness of this approach may be sensitive to key variables such as script length (Poe et al 2002;Aadland and Caplan 2003), subject experience (List 2001;Lusk 2003;Aadland and Caplan 2003) and payment amounts (Brown et al 2003;Murphy et al 2005b). In fact, Aadland and Caplan (2006) find that a neutral cheap talk script can actually exacerbate hypothetical bias.…”