Hypothetical bias in choice experiments: Is cheap talk effective at eliminating bias on the intensive and extensive margins of choice?

B.E. Journal of Economic Analysis and Policy

Volumn 12, Issue 1, 2012, Pages

  Bosworth, Ryan ^a   Taylor, Laura O ^b  

^a UTAH STATE UNIVERSITY   (United States)

^b NORTH CAROLINA STATE UNIVERSITY   (United States)

Author keywords

Cheap talk; Choice experiment; Hypothetical bias

Indexed keywords

EID: 84898744690     PISSN: None     EISSN: 19351682     Source Type: Journal    
DOI: 10.1515/1935-1682.3278     Document Type: Review

References (36)

1. Aadland, D. and A. J. Caplan (2006). "Cheap talk reconsidered: New evidence from CVM." Journal of Economic Behavior and Organization 60(4):562-578.
2. Barrage, L. and M. S. Lee (2010). "A penny for your thoughts: Inducing truthtelling in stated preference elicitation. " Economics Letters 106(2):140-142.
3. Bateman, I. J., R. T. Carson, B. Day, M. Hanemann, N. Hanley, T. Hett, M. Jones-Lee, G. Loomes, S. Mourato, E. Özdemiroglu, D. W. Pearce, R. Sugden, and J. Swanson (2002). Economic Valuation with Stated Preferences: A Manual (Edward Elgar, Cheltenham, UK).
4. Bjornstad, D., R. Cummings, and L. Osborne (1997). "A learning design for reducing hypothetical bias in the contingent valuation method." Environmental and Resource Economics 10(3):207-221.
5. Blumenschein, K., G. C. Blomquist, M. Johannesson, N. Horn, and P. Freeman (2008). "Eliciting willingness to pay without bias: Evidence from a field experiment." Economic Journal 118(525):114-137.
6. Bohm, P. (1972). "Estimating demand for public goods: An experiment." European Economic Review 3(2):111-130.
7. Brown, T. C., I. Ajzen, and D. Hrubes (2003). "Further tests of entreaties to avoid hypothetical bias in referendum contingent valuation. " Journal of Environmental Economics and Management 46(2):353-361.
8. Carlsson, F., P. Frykblom, and C. J. Lagerkvist (2005). "Using cheap talk as a test of validity in choice experiments." Economics Letters 89(2):147-152.
9. Carlsson, F., and P. Martinson (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.
10. Carson, R. T., N. E. Flores, and N. F. Meade (2001). "Contingent Valuation: Controversies and Evidence." Environmental and Resource Economics 19(2):173-210.
11. Carson, R. and T. Groves (2007). "Incentive and informational properties of preference questions." Environmental and Resource Economics 37(1):181-210.
12. Carson, R. and J. Louviere (2011). "A Common Nomenclature for Stated Preference Elicitation Approaches." Environmental and Resource Economics 49(4):539-559.
13. Cummings, R. G., G. W. Harrison, E. E. Rutström (1995). "Homegrown Values and Hypothetical Surveys: Is the Dichotomous Choice Approach Incentive-Compatible?" American Economic Review 85(1):260-266.
14. Cummings, R. G. and L. O. Taylor (1998). "Does Realism Matter in Contingent Valuation?" Land Economics 74(2):203-215.
15. Cummings, R. G. and L. O. Taylor (1999). "Unbiased value estimates for environmental goods: A cheap talk design for the contingent valuation method." American Economic Review 89(3):649-665.
16. Haab, T. C. and K. E. McConnell (2002). Valuing Environmental and Natural Resources: The Econometrics of Non-Market Valuation (New Horizons in Environmental Economics), Edward Elgar Pub.
17. Harrison, G. W., M. I. Lau, and E. E. Rutström (2009). "Risk attitudes, randomization to treatment, and self-selection into experiments." Journal of Economic Behavior & Organization 70(3):498-507.
18. Harrison, G. W. and J. A. List (2004). "Field experiments." Journal of Economic Literature 42(4):1009-1055.
19. Harrison, G. W., and E. E. Rutström (2008). "Experimental evidence on the existence of hypothetical bias in value elicitation methods." Handbook of experimental economics results 1:752-767.
20. Holmes, T. P. and W. L. Adamowicz (2003). "Attribute-Based Methods" in A Primer on Nonmarket Valuation. P. A. Champ, K. J. Boyle and T. C. Brown, Springer Netherlands. 3:171-219.
21. Horowitz, J. K., K. E. McConnell, and J. J. Murphy (Forthcoming). Behavioral Foundations of Environmental Economics and Valuation. Handbook on Experimental Economics and the Environment. eds: J. List and M. Price. (Northampton, MA, Edward Elgar).
22. Jacquemet, N., A. G. James, S. Luchini, and J. F. Shogren (2011). "Social Psychology and Environmental Economics: A New Look at Ex Ante Corrections of Biased Preference Evaluation. " Environmental and Resource Economics 48(3):413-433.
23. Jacquemet, N., R.-V. Joule, S. Luchini, and J. F. Shogren (2009). "Preference Elicitation under Oath." Documents de travail du Centre d'Economie de la Sorbonne 09043, Université Panthéon-Sorbonne (Paris 1). Centre d'Economie de la Sorbonne.
24. Landry, C. E. and J. A. List (2007). "Using ex ante approaches to obtain credible signals for value in contingent markets: Evidence from the field." American Journal of Agricultural Economics 89(2):420-429.
25. List, J. A. (2001). "Do explicit warnings eliminate the hypothetical bias in elicitation procedures? Evidence from field auctions for sportscards." American Economic Review 91(5):1498-1507.
26. List, J. A., and C. A. Gallet (2001). "What experimental protocol influence disparities between actual and hypothetical stated values?" Environmental and Resource Economics 20(3):241-254.
27. List, J. A., P. Sinha, and M. Taylor (2006). "Using Choice Experiments to Value Non-Market Goods and Services: Evidence from Field Experiments." Advances in Economic Analysis & Policy 6 (2).
28. Louviere, J. J., D. A. Hensher, and J. D. Swait (2000). Stated Choice Methods: Analysis and Applications. New York, Cambridge University Press.
29. Lusk, J. L. and T. C. Schroeder (2004). "Are choice experiments incentive compatible? A test with quality differentiated beef steaks." American Journal of Agricultural Economics 86(2):467-482.
30. Morrison, M. and T. C. Brown (2009). "Testing the Effectiveness of Certainty Scales, Cheap Talk, and Dissonance-Minimization in Reducing Hypothetical Bias in Contingent Valuation Studies." Environmental and Resource Economics 44(3):307-326.
31. Mozumder, P. and R. P. Berrens (2007). "Investigating hypothetical bias: induced-value tests of the referendum voting mechanism with uncertainty." Applied Economics Letters 14(10):705-709.
32. Murphy, J. J., T. H. Stevens, D. Weatherhead (2005). "Is cheap talk effective at eliminating hypothetical bias in a provision point mechanism?" Environmental & Resource Economics 30(3):327-343.
33. Sloane, N. J. A. (2004) A Library of Othogonal Arrays, available at http://www.research.att.com/~njas/oadir/, last accessed April 19, 2010.
34. Swait, J., and J. Louviere (1993). "The role of the scale parameter in the estimation and comparison of multinomial logit models." Journal of Marketing Research 305-314.
35. Taylor, L. O., M. D. Morrison, K. J. Boyle (2010). "Exchange rules and the incentive compatibility of choice experiments." Environmental and Resource Economics 47(2):197-220.
36. nd Ed. Cambridge University Press