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A Comparison of Approaches to Mitigate Hypothetical Bias

Published online by Cambridge University Press:  15 September 2016

Patricia A. Champ ,
Rebecca Moore  and
Richard C. Bishop
Patricia A. Champ
Affiliation:
Rocky Mountain Research Station, U.S. Forest Service, in Fort Collins, Colorado
Rebecca Moore
Affiliation:
Warnell School of Forestry and Natural Resources at the University of Georgia in Athens, Georgia
Richard C. Bishop
Affiliation:
Department of Agricultural and Applied Economics at the University of Wisconsin in Madison, Wisconsin, and a consultant at Stratus Consulting Inc. in Boulder, Colorado, and Washington, D.C.
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Abstract

We compare two approaches to mitigating hypothetical bias. The study design includes three treatments: an actual payment treatment, a contingent valuation (CV) treatment with a follow-up certainty question, and a CV treatment with a cheap talk script. Our results suggest that both the follow-up certainty treatment and the cheap talk treatment produce willingness-to-pay (WTP) estimates consistent with the actual payment treatment. However, the follow-up certainty treatment provides response distributions at all offer amounts that are statistically similar to the actual payment treatment, while the cheap talk treatment provides similar responses only at some offer amounts. Furthermore, the cheap talk treatment is effective only for inexperienced individuals. We conclude that the follow-up certainty approach is more consistent than the cheap talk approach for eliminating hypothetical bias.

Keywords

contingent valuationhypothetical biasfollow-up certaintycheap talknonmarket valuation
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 38 , Issue 2 , October 2009 , pp. 166 - 180
Copyright
Copyright © 2009 Northeastern Agricultural and Resource Economics Association 

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