What Are the Consequences of Consequentiality?

Joseph Herriges, Catherine Kling, Chih-Chen Liu and Justin Tobias ()

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: We offer an empirical test of a theoretical result in the contingent valuation literature. Specifically, it has been argued from a theoretical point of view that survey participants who perceive a survey to be ``consequential'' will respond to questions truthfully regardless of the degree of perceived consequentiality. Using survey data from the Iowa Lakes Project, we test this supposition. Specifically, we employ a Bayesian treatment effect model in which the degree of perceived consequentiality, measured as an ordinal response, is permitted to have a structural impact on willingness to pay (WTP) for a hypothetical environmental improvement. We test the theory by determining if the WTP distributions are the same for each value of the ordinal response. In our survey data, a subsample of individuals were randomly assigned supporting information suggesting that their responses to the questionnaires were important and will have an impact on policy decisions. In conjunction with a Bayesian posterior simulator, we use this source of exogenous variation to identify the structural impacts of consequentiality perceptions on willingness to pay, while controlling for the potential of confounding on unobservables. We find evidence consistent with the ``knife-edge'' theoretical results, namely that the willingness to pay distributions are equal among those believing the survey to be at least minimally consequential, and different for those believing that the survey is irrelevant for policy purposes.

Keywords: nonmarket; valuation (search for similar items in EconPapers)
JEL-codes: Q00 (search for similar items in EconPapers)
Date: 2009-03-05
New Economics Papers: this item is included in nep-agr and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published in Journal of Environmental Economics and Management 2010, vol. 59 no. 1, pp. 67-81

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Related works:
Journal Article: What are the consequences of consequentiality? (2010)
Working Paper: What are the consequences of consequentiality? (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:13034

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