Validity of Willingness to Pay Measures under Preference Uncertainty

Carola Braun, Katrin Rehdanz and Ulrich Schmidt

Open Access Publications from Kiel Institute for the World Economy from Kiel Institute for the World Economy (IfW Kiel)

Abstract: Recent studies in the marketing literature developed a new method for eliciting willingness to pay (WTP) with an open-ended elicitation format: the Range-WTP method. In contrast to the traditional approach of eliciting WTP as a single value (Point-WTP), Range-WTP explicitly allows for preference uncertainty in responses. The aim of this paper is to apply Range- WTP to the domain of contingent valuation and to test for its theoretical validity and robustness in comparison to the Point-WTP. Using data from two novel large-scale surveys on the perception of solar radiation management (SRM), a little-known technique for counteracting climate change, we compare the performance of both methods in the field. In addition to the theoretical validity (i.e. the degree to which WTP values are consistent with theoretical expectations), we analyse the test-retest reliability and stability of our results over time. Our evidence suggests that the Range-WTP method clearly outperforms the Point-WTP method.

Keywords: Surveys; Climate Change; Emotions; Research Validity; Chocolate; Payment; Alternative Energy; Wine (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-env and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Journal Article: Validity of Willingness to Pay Measures under Preference Uncertainty (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkie:141320

DOI: 10.1371/journal.pone.0154078

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