Testing hypothetical bias with a real choice experiment using respondents' own money

European Review of Agricultural Economics

Volumn 41, Issue 1, 2014, Pages 25-46

  Moser, Riccarda ^a   Raffaelli, Roberta ^b   Notaro, Sandra ^b  

^a RESEARCH AND INNOVATION CENTRE   (Italy)

^b UNIVERSITY OF TRENTO   (Italy)

Author keywords

apples; cheap talk; hypothetical bias; own money; real choice experiment

Indexed keywords

AGRICULTURAL MARKET; FRUIT; HYPOTHESIS TESTING; INCENTIVE; RESEARCH;

EID: 84891667963     PISSN: 01651587     EISSN: 14643618     Source Type: Journal    
DOI: 10.1093/erae/jbt016     Document Type: Article

References (62)

1. Aadland, D. and Caplan, A. J. (2003). Willingness to pay for curbside recycling with detection and mitigation of hypothetical bias. American Journal of Agricultural Economics 85(2): 492-502. (Pubitemid 36624256)
2. Alfnes, F., Guttormsen, A. G., Steine, G. and Kolstad, K. (2006). Consumer's willingness to pay for the color of salmon: a choice experiment with real economic incentives. American Journal of Agricultural Economics 88(4): 1050-1061. (Pubitemid 44575320)
3. Alfnes, F. and Steine, G. (2005). None-of-these bias in hypothetical choice experiments. Discussion Paper DP-06/05. Department of Economics and Resources Management, Norwegian University of Life Sciences, Aas, Norway.
4. Alfnes, F., Yue, C. and Jensen, H. H. (2010). Cognitive dissonance as a means of reducing hypothetical bias. European Review of Agricultural Economics 37(2): 147-163.
5. Aoki, K., Shen, J. and Tatsuyoshi, S. (2010). Consumer reaction to information on food additives: evidence from an eating experiment and a field survey. Journal of Economic Behavior & Organization 73: 433-438.
6. Arkes, H., Joyner, C., Pezzo, M., Nash, J. G., Siegel-Jacobs, K. and Stone, E. (1994). The psychology of windfall gains. Organizational Behaviour and Human Decision Processes 59: 331-347.
7. Balcombe, K., Chalak, A. and Fraser, I. (2009). Model selection for the mixed logit with Bayesian estimation. Journal of Environmental Economics and Management 57(2): 226-237.
8. Bech, M. and Gyrd-Hansen, D. (2005). Effects coding in discrete choice experiments. Health Economics 14: 1079-1083. (Pubitemid 41419196)
9. Bliemer, M. C. J., Rose, J. M. and Hess, S. (2008). Approximation of Bayesian efficiency in experimental choice designs. Journal of Choice Modelling 1(1): 98-127.
10. Broadbent, C., Grandy, J. and Berrens, R. (2010). Testing for hypothetical bias in a choice experiment using a local public good: riparian forest restoration. International Journal of Ecological Economics and Statistics 19(F10): 1-19.
11. Brummet, R. G., Nayga, R. M. and Wu, X. (2007). On the use of cheap talk in new product valuation. Economics Bulletin 2(1): 1-9.
12. Cameron, T. A., Poe, G. L., Ethier, R. G. and Shulze, W.D. (2002). Alternative non-market value-elicitation methods: are the underlying preferences the same? Journal of Environmental Economics and Management 44(3): 391-425. (Pubitemid 35235476)
13. Carlsson, F., Frykblom, P. and Lagerkvist, C. J. (2005). Using cheap-talk as a test of validity in choice experiments. Economics Letters 89: 147-152. (Pubitemid 41511676)
14. Carlsson, F., He, H. and Martinsson, P. (2009). Easy come, easy go. The role of windfall money in lab and field experiments. Working Paper No. 374, School of Business, Economics and Law, University of Gothenburg.
15. Carlsson, F. and Martinsson, P. (2001). Do hypothetical and actual marginal willingness to pay differ in choice experiments? Application to the valuation of the environment. Journal of Environmental Economics and Management 41(2): 179-192. (Pubitemid 34124525)
16. Caussade, S., Ortúzar, J. D., Rizzi, L. I. and Hensher, D. A. (2005). Assessing the influence of design dimensions on stated choice experiment estimates. Transportation Research Part B 39: 621-640. (Pubitemid 40306746)
17. Champ, P. A., Moore, R. and Bishop, R. C. (2009). A comparison of approaches to mitigate hypothetical bias. Agricultural and Resource Economics Review 38(2): 166-180.
18. Chang, J. B., Lusk, J. L. and Norwood, F. B. (2009). How closely do hypothetical surveys and laboratory experiments predict field behavior? American Journal of Agricultural Economics 91(2): 518-534.
19. Cherry, T. L., Kroll, S. and Shogren, J. F. (2005). The impact of endowment heterogeneity and origin on public good contributions: evidence from the lab. Journal of Economics Behaviour & Organization 57: 357-365. (Pubitemid 40742604)
20. Chowdhury, S., Meenakshi, J. V., Tomlins, K. and Owori, C. (2011). Are consumers in developing countries willing-to-pay more for micronutrient-dense biofortified foods? Evidence from a field experiment in Uganda. American Journal of Agricultural Economics 93(1): 83-97.
21. Clark, J. (2002). House money effects in public goods experiments. Experimental Economics 5(3): 223-231.
22. Corrigan, J. R., Depositario, D. P. T., Nayga, R. M., Wu, X. and Laude, T. P. (2009). Comparing open-ended choice experiments and experimental auctions: an application to golden rice. American Journal of Agricultural Economics 91(3): 837-853.
23. Cummings, R. G. and Taylor, L. O. (1999). Unbiased value estimates for environmental goods: a cheap talk design for the contingent valuation method. American Economic Review 89: 649-665.
24. Ding, M. (2007). An incentive-aligned mechanism for conjoint analysis. Journal of Marketing Research 44(2): 214-223.
25. Ding, M., Grewal, R. and Liechty, J. (2005). Incentive-aligned conjoint analysis. Journal of Marketing Research 42(1): 67-82. (Pubitemid 40346152)
26. Dong, S., Ding, M. and Huber, J. (2010). A simple mechanism to incentive align conjoint experiments. International Journal of Research in Marketing 27: 25-32.
27. EC (2009). Directive 2009/128/EC of the European Parliament and of the Council of 21 October 2009 establishing a framework for community action to achieve the sustainable use of pesticides. Official Journal of the European Union, L 309: 71-86.
28. Fifer, S. (2011). Hypothetical bias in stated preference experiments: is it a problem?Andif so, how do we deal with it? PhD thesis. University of Sydney Business School, Institute of Transport and Logistics Studies Australia.
29. Frino, A., Grant, J. and Johnstone, D. (2008). The house money effect and local traders on the Sydney Futures Exchange. Pacific-Basin Finance Journal 16(1-2): 8-25.
30. Harrison, G. W. (2006). Experimental evidence on alternative environmental valuation methods. Environmental and Resource Economics 34: 125-162.
31. Hensher, D. A. (2010). Hypothetical bias, choice experiments and willingness to pay. Transportation Research Part B: Methodological 44(6): 735-752.
32. Hensher, D. A., Rose, J. M. and Greene, W. H. (2005). Applied Choice Analysis. A Primer. New York: Cambridge University Press.
33. Hoyos, D. (2010). The state of the art of environmental valuation with discrete choice experiments. Ecological Economics 69: 1595-1603.
34. Johansson-Stenman, O. and Svedsäter, H. (2008). Measuring hypothetical bias in choice experiments: the importance of cognitive consistency. The B.E. Journal of Economic Analysis and Policy 8(1): Article 41.
35. Johansson-Stenman, O. and Svedsäter, H. (2012). Self-image and valuation of moral goods: stated versus actual willingness to pay. Journal of Economic Behavior & Organization 84(3): 879-891.
36. Kjaer, T., Bech, M., Gyrd-Hansen, D. and Hart-Hansen, K. (2006). Ordering effect and price sensitivity in discrete choice experiments: need we worry? Health Economics 15(11): 1217-1228. (Pubitemid 44696949)
37. Krinsky, I. and Robb, A. L. (1986). On approximating the statistical properties of elasticities. The Review of Economics and Statistics 68(4): 715-719.
38. Ladenburg, J. and Olsen, S. (2010). Augmenting short cheap talk scripts with a repeated opt-out reminder in choice experiment surveys. FOI Working Paper 2010/9. Institute of Food and Resource Economics, University of Copenhagen.
39. List, J. A. (2001). Do explicit warnings eliminate the hypothetical bias in elicitation procedures? Evidence from field auctions for sportscards. The American Economic Review 91(5): 1498-1507. (Pubitemid 33594711)
40. List, J. A. and Gallet, C. A. (2001). What experimental protocol influences disparities between actual and hypothetical stated values? Environmental and Resource Economics 20(3): 241-254. (Pubitemid 34001917)
41. List, J. A., Sinha, P. and Taylor, M. H. (2006). Using choice experiments to value non-market goods and services: evidence from field experiments. Advances in Economic Analysis and Policy 6: 1-37.
42. Little, J. and Berrens, E. (2004). Explaining disparities between actual and hypothetical stated values: further investigation using meta-analysis. Economics Bulletin 3(6): 1-13.
43. Loomis, J., Bell, P., Cooney, H. and Asmus, C. (2009).Acomparison of actual and hypothetical willingness to pay of parents and non-parents for protecting infant health: the case of nitrates in drinking water. Journal of Agricultural and Applied Economics 41(3): 697- 712.
44. Louviere, J. J., Hensher, D. A. and Swait, J. D. (2000). Stated Choice Methods. Analysis and Applications. Cambridge: Cambridge University Press.
45. Lusk, J. L. (2003). Willingness to pay for golden rice. American Journal of Agricultural Economics 85(4): 840-856.
46. Lusk, J. L., Fields, D. and Prevatt, W. (2008). An incentive compatible conjoint ranking mechanism. American Journal of Agricultural Economics 90(2): 487-498. (Pubitemid 351524221)
47. Lusk, J. L., Norwood, F. B. and Pruitt, J. R. (2006). Consumer demand for ban on antibiotic drug use in pork production. American Journal of Agricultural Economics 88(4): 1015- 1033. (Pubitemid 44575318)
48. Lusk, J. L. and Schroeder, T. C. (2004). Are choice experiments incentive compatible?Atest with quality differentiated beef steaks. American Journal of Agricultural Economics 86(2): 467-482. (Pubitemid 38546647)
49. Michaud, C., Llerena, D. and Joly, I. (2013). Willingness to pay for environmental attributes of non-food agricultural products: a real choice experiment. European Review of Agricultural Economics 40(2): 313-329.
50. Murphy, J. J., Allen, P. G., Stevens, T. H. and Weatherhead, D. (2005a). A meta-analysis of hypothetical bias in stated preference valuation. Environmental and Resource Economics 30(3): 313-325. (Pubitemid 40560742)
51. Murphy, J. J., Stevens, T. and Weatherhead, D. (2005b). Is cheap talk effective at eliminating hypothetical bias in a provision point mechanism? Environmental and Resource Economics 30(3): 327-343. (Pubitemid 40560743)
52. Norwood, F. B. and Lusk, J. L. (2011). Social desirability bias in real, hypothetical, and inferred valuation experiments. American Journal of AgriculturalEconomics 93(2):528-534.
53. Poe, G. L., Giraud, K. L. and Loomis, J. B. (2005). Computational methods for measuring the difference of empirical distributions. American Journal of Agricultural Economics 87(2): 353-365. (Pubitemid 40687066)
54. Ready, R. C., Champ, P. A. and Lawton, J. L. (2010). Using respondent uncertainty to mitigate hypothetical bias in a stated choice experiment. Land Economics 86: 363-381.
55. Revelt, D. and Train, K. (1998). Mixed logit with repeated choices: households' choices of appliance efficiency level. The Review of Economics and Statistics 80(4): 647-657. (Pubitemid 128344306)
56. Scarpa, R., Notaro, S., Louviere, J. J. and Raffaelli, R. (2011). Exploring scale effects of best/ worst rank ordered choice data to estimate benefits of tourism in Alpine grazingcommons. American Journal of Agricultural Economics 93(3): 813-828.
57. Silva, A., Nayga, R., Jr, Campbell, B. L. and Park, L. J. (2011). Revisiting cheap talk with new evidence from a field experiment. Journal of Agricultural and Resource Economics 36(2): 280-291.
58. Smith, P., Martino, D., Cai, Z., Gwary, D., Janzen, H., Kumar, P., McCarl, B., Ogle, S., O'Mara, F., Rice, C., Scholes, B., Sirotenko, O., Howden, M., McAllister, T., Pan, G., Romanenkov, V., Schneider, U., Towprayoon, S., Wattenbach, M. and Smith, J. (2008). Greenhouse gas mitigation in agriculture. Philosophical Transactions of the Royal Society B 363: 789-813. (Pubitemid 351437374)
59. Thaler, R. and Johnson, E. (1990). Gambling with the house money and trying to break even: the effects of prior outcomes on risky choice. Management Science 36: 643-660.
60. Tonsor, G. T. and Shupp, R. S. (2011). Cheap talk scripts and online choice experiments: looking beyond themean. American Journal of Agricultural Economics 93(4): 1015-1031.
61. Train, K. (2009). Discrete Choice Methods with Simulation. 2nd edn. New York: Cambridge University Press.
62. Yue, C. and Tong, C. (2009). Organic or local? Investigating consumer preference for fresh produce using a choice experiment with real economic incentives. HortScience 44(2): 366-371.