A Comparison of Induced Value and Home-Grown Value Experiments to Test for Hypothetical Bias in Contingent Valuation

James Murphy, Thomas Stevens () and Lava Yadav
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Thomas Stevens: Department of Resource Economics, University of Massachusetts Amherst
Lava Yadav: Department of Resource Economics, University of Massachusetts Amherst

No 2010-06, Working Papers from University of Alaska Anchorage, Department of Economics

Abstract: This study tests the hypothesis that hypothetical bias may not be related to value elicitation; rather it may be a value formation problem. When participants are asked to indicate their willingness to pay for an induced value good, we find no evidence of hypothetical bias for three different commodity types (public good, private good, and publicly provided private good). However, when these same subjects are asked to value homegrown goods with no pre-assigned induced value using the same elicitation mechanism, hypothetical values are roughly double actual payments in all three cases. These results support the hypothesis that the process of forming values in a homegrown setting may be a key contributor to hypothetical bias.

Keywords: contingent valuation; hypothetical bias; experiments; induced values; home-grown values; experimental economics; environmental economics (search for similar items in EconPapers)
JEL-codes: C90 C91 H41 Q26 Q28 Q51 (search for similar items in EconPapers)
Date: 2010-03
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Citations: View citations in EconPapers (36)

Published in Environmental and Resource Economics, 47(1):111-123

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http://www.econpapers.uaa.alaska.edu/RePEC/ala/wpaper/ALA201006.pdf (application/pdf)

Related works:
Journal Article: A Comparison of Induced Value and Home-Grown Value Experiments to Test for Hypothetical Bias in Contingent Valuation (2010)
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