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Provision Point Mechanisms and Field Validity Tests of Contingent Valuation

Gregory Poe, Jeremy Clark (), Daniel Rondeau and William Schulze

Environmental & Resource Economics, 2002, vol. 23, issue 1, 105-131

Abstract: Past field validity tests of contingent valuation have relied on voluntary contribution mechanisms to elicit actual willingness to pay, and may overestimate hypothetical bias because of free riding in the actual contributions. This paper argues that provision point mechanisms are a preferred alternative for field validity tests of contingent valuation because they increase the proportion of demand revealed in cases in which public goods can be provided in a step function. The results of a contingent valuation validity study of participation in a green electricity pricing program that uses a provision point mechanism are reported, and hypothetical open-ended and dichotomous choice responses are compared to actual participation. Calibration of hypothetical responses is also explored. Copyright Kluwer Academic Publishers 2002

Keywords: contingent valuation; experimental economics; provision point mechanism; validity (search for similar items in EconPapers)
Date: 2002
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Handle: RePEc:kap:enreec:v:23:y:2002:i:1:p:105-131