Incentive Incompatibility and Starting-Point Bias in Iterative Valuation Questions

John Whitehead

Land Economics, 2002, vol. 78, issue 2, 285-297

Abstract: We test for incentive incompatibility and starting-point bias to describe the effects of iterative valuation questions on willingness to pay. We compare double-, triple-, and multiplebounded models with data from two surveys with similar designs of the valuation questions. We find that incentive incompatibility is present in both sets of data and starting-point bias is present in one. The efficiency of the willingness-to-pay estimate is improved in only one set of data. The potential loss from using iterative questions without controlling for both incentive incompatibility and starting-point bias is biased willingness-topay estimates.

JEL-codes: Q26 (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (87)

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