Hypothetical Bias in Risk Preferences as a Driver of Hypothetical Bias in Willingness to Pay: Experimental Evidence

Jinkwon Lee and Uk Hwang
Additional contact information
Uk Hwang: Kyungpook National University

Environmental & Resource Economics, 2016, vol. 65, issue 4, No 6, 789-811

Abstract: Abstract This study provides new insight on the established issue of elicitation bias in hypothetical choice settings. In particular, using an experiment that elicits real and hypothetical willingness to pay for the protection of otters, we provide evidence that the observed bias is driven by those who are both uncertain about their value and exhibit hypothetical bias in risk attitudes. This finding provides a reason why calibration approaches based on follow-up certainty questions have proven useful, but also suggests a degree of caution in applying the approach. Our results favour combining uncertainty calibration with CVM-X in which hypothetical bias in risk attitudes is also taken account to correct for hypothetical bias in WTP.

Keywords: Contingent valuation method; Hypothetical bias; Risk attitudes; Laboratory experiment; CVM-X (search for similar items in EconPapers)
JEL-codes: C91 D81 Q51 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://link.springer.com/10.1007/s10640-015-9926-9 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:enreec:v:65:y:2016:i:4:d:10.1007_s10640-015-9926-9

Ordering information: This journal article can be ordered from
http://www.springer. ... al/journal/10640/PS2

DOI: 10.1007/s10640-015-9926-9

Access Statistics for this article

Environmental & Resource Economics is currently edited by Ian J. Bateman

More articles in Environmental & Resource Economics from Springer, European Association of Environmental and Resource Economists Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().