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Predicting versus testing: a conditional cross‐forecasting accuracy measure for hypothetical bias *
Author(s) -
Volinskiy Dmitriy,
Adamowicz Wiktor,
Veeman Michele
Publication year - 2011
Publication title -
australian journal of agricultural and resource economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.683
H-Index - 49
eISSN - 1467-8489
pISSN - 1364-985X
DOI - 10.1111/j.1467-8489.2011.00552.x
Subject(s) - measure (data warehouse) , econometrics , context (archaeology) , preference , statistics , divergence (linguistics) , computer science , mathematics , data mining , paleontology , linguistics , philosophy , biology
A measure of hypothetical bias, or the divergence between stated and revealed preferences, based on conditional cross‐forecasting accuracy is suggested, based on out‐of‐sample prediction accuracy when estimates from stated preference data are used in place of those from actual choices, and vice versa. We describe an application of this measure to assess hypothetical bias in the context of an inquiry into people’s willingness to pay to avoid canola oil produced from genetically modified plants. The analysis suggests the presence of groupwise hypothetical bias in these choice data.