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Warm glow, free‐riding and vehicle neutrality in a health‐related contingent valuation study
Author(s) -
Hackl Franz,
Pruckner Gerald J.
Publication year - 2005
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.933
Subject(s) - free riding , valuation (finance) , willingness to pay , economics , payment , contingent valuation , neutrality , criticism , glow discharge , econometrics , microeconomics , actuarial science , law , physics , political science , accounting , finance , plasma , quantum mechanics , incentive
Abstract Criticism of contingent valuation (CV) stresses warm glow and free‐riding as possible causes for biased willingness to pay figures. We present an empirical framework to study the existence of warm glow and free‐riding in hypothetical WTP answers based on a CV survey for the measurement of health‐related Red Cross services. Both in conventional double‐bounded and spike models we do not find indication of warm glow phenomena and free‐riding behaviour. The results are very robust and insensitive to the applied payment vehicles. Theoretical objections against CV do not find sufficient empirical support. Copyright © 2004 John Wiley & Sons, Ltd.