Premium
Experimental Results on Expressed Certainty and Hypothetical Bias in Contingent Valuation
Author(s) -
Blumenschein Karen,
Johannesson Magnus,
Blomquist Glenn C.,
Liljas Bengt,
O'Conor Richard M.
Publication year - 1998
Publication title -
southern economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 58
eISSN - 2325-8012
pISSN - 0038-4038
DOI - 10.1002/j.2325-8012.1998.tb00136.x
Subject(s) - contingent valuation , valuation (finance) , certainty , economics , willingness to pay , econometrics , null hypothesis , actuarial science , microeconomics , mathematics , geometry , finance
Use of the contingent valuation method is controversial among economists because it is based on hypothetical rather than real choices. Previous experiments have suggested that the commonly used dichotomous choice contingent valuation method leads to hypothetical bias, i.e., overestimates the real willingness to pay. We carried out an experiment to compare the dichotomous choice contingent valuation method with real purchase decisions for a consumer good. We confirm previous findings that hypothetical yes responses overestimate real purchase decisions, but we cannot reject the null hypothesis that definitely sure yes responses correspond to real purchase decisions.