Economics at your fingertips  

Mitigating Hypothetical Bias: Evidence on the Effects of Correctives from a Large Field Study

Mark Andor, Manuel Frondel and Colin Vance
Additional contact information
Colin Vance: RWI - Leibniz Institut für Wirtschaftsforschung

Environmental & Resource Economics, 2017, vol. 68, issue 3, 777-796

Abstract: Abstract The overestimation of willingness-to-pay (WTP) in hypothetical responses is a well-known finding in the literature. Various techniques have been proposed to remove or, at least, reduce this bias. Using about 30,000 responses on WTP for a variety of power mixes from a panel of 6500 German households and the fixed-effects estimator to control for unobserved heterogeneity, this article simultaneously explores the effects of two common ex-ante approaches—cheap talk and consequential script—and the ex-post certainty approach to calibrating hypothetical WTP responses. Based on a switching regression model that accounts for the potential endogeneity of respondent certainty, we find evidence for a lower WTP among those respondents who classify themselves as definitely certain about their answers. Although neither cheap talk nor the consequential-script corrective reduce WTP estimates, receiving either of these scripts increases the probability that respondents indicate definite certainty about their WTP bids.

Keywords: Willingness-to-pay; Cheap talk; Certainty approach (search for similar items in EconPapers)
JEL-codes: D12 Q21 Q41 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link) Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Working Paper: Mitigating Hypothetical Bias: Evidence on the Effects of Correctives from a Large Field Study (2015) Downloads
Working Paper: Mitigating Hypothetical Bias – Evidence on the Effects of Correctives from a Large Field Study (2014) Downloads
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:

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

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 ().

Page updated 2019-11-06
Handle: RePEc:kap:enreec:v:68:y:2017:i:3:d:10.1007_s10640-016-0047-x