Explaining Hypothetical Bias Variations Using Income Elasticity of Demand

Felix Munoz-Garcia and Tongzhe Li

Homo Oeconomicus: Journal of Behavioral and Institutional Economics, 2018, vol. 35, issue 3, No 4, 207-224

Abstract: Abstract Experimental methods have been widely used to elicit consumer preferences. However, the estimates are challenged because the existing literature indicates that individuals overstate their economic valuation in hypothetical settings, thus giving rise to the so-called “hypothetical bias.” Although many studies seek to experimentally test which factors emphasize or ameliorate the hypothetical bias, no studies analyze its theoretical foundations. Our results also provide empirically testable implications, such as that hypothetical bias increases in a commodity’s income elasticity of demand and budget share.

Keywords: Experiments; Hypothetical bias; Income elasticity; Willingness to pay (search for similar items in EconPapers)
JEL-codes: C9 D01 D10 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s41412-018-0076-5 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:spr:homoec:v:35:y:2018:i:3:d:10.1007_s41412-018-0076-5

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/41412

DOI: 10.1007/s41412-018-0076-5

Access Statistics for this article

Homo Oeconomicus: Journal of Behavioral and Institutional Economics is currently edited by M.J. Holler, M. Kocher and K.K. Sieberg

More articles in Homo Oeconomicus: Journal of Behavioral and Institutional Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().