Welfare impact of information with experiments: the crucial role of the price elasticity of demand

Stéphan Marette (), Jayson Lusk and Jutta Roosen

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Abstract: This paper focuses on the welfare effects of information computed from experimental methods eliciting willingness-topay. First, a theoretical model shows that the size of the welfare variation is related to the elasticity of the demand under the absence of information about a characteristic. Second, our estimates indicate that consumer demand from a laboratory auction is more price-elastic than time-series demand for similar products. As a result, the welfare change directly derived from individual willingness-to-pay is overestimated compared to the welfare change linked to an approach combining time-series demand with the mean willingness-to-pay premium.

Keywords: DEMANDE; ECONOMIE DU BIEN-ETRE; SERIE TEMPORELLE; RÔLE DE LA DEMANDE; RAPPORT AU PRIX; ELASTICITE DE LA DEMANDE (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (2)

Published in Economics Bulletin, 2010, 30 (2), pp.1585-1593

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Journal Article: Welfare Impact of Information with Experiments: The Crucial Role of the Price Elasticity of Demand (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01172946

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