Reducing Bias in Preference Elicitation for Environmental Public Goods

The recent stated preference literature emphasises the importance of incentive compatible elicitation methods, which depend on respondent beliefs that payment can be collected if provision occurs. We investigate this condition in a randomised field experiment where stated choices are incentivised financially. The objective of the treatment was to make choices salient by making each decision financially relevant and to increase the respondents' beliefs that future payments will be enforced. Our results show that the treatment increases estimates of the marginal utility of income, with the effect being economically and statistically significant for low-income respondents. We develop a stylised theoretical framework that allows us to quantify the bias that is implied by the observed differences between the treated and control groups. We find that failure to account for respondents' doubts about payment coercion in an otherwise well-designed survey inflates the marginal willingness to pay among low-income respondents by a factor of at least 1.72.

This is the peer reviewed version of the following article: [Reducing bias in preference elicitation for environmental public goods*. Australian Journal of Agricultural and Resource Economics (2021)], which has been published in final form at https://doi.org/10.1111/1467-8489.12463. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions: https://authorservices.wiley.com/author-resources/Journal-Authors/licensing/self-archiving.html#3.

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Work Title Reducing Bias in Preference Elicitation for Environmental Public Goods
Access
Open Access
Creators
  1. Daniel A. Brent
  2. Lata Gangadharan
  3. Anke D. Leroux
  4. Paul A. Raschky
Keyword
  1. Field experiment
  2. Quasi-public goods
  3. Non-market goods
  4. Stated preference
  5. Hypothetical bias
License In Copyright (Rights Reserved)
Work Type Article
Publisher
  1. Wiley
Publication Date December 18, 2021
Publisher Identifier (DOI)
  1. 10.1111/1467-8489.12463
Source
  1. Australian Journal of Agricultural and Resource Economics
Deposited May 27, 2022

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Version 1
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  • Created

    May 27, 2022 16:19 by Scholarly Communications and Copyright

  • Added 4216moneybrentgangadharanlerouxraschky-1.pdf

    May 27, 2022 16:19 by Scholarly Communications and Copyright

  • Added Creator Daniel A. Brent

    May 27, 2022 16:19 by Scholarly Communications and Copyright

  • Added Creator Lata Gangadharan

    May 27, 2022 16:19 by Scholarly Communications and Copyright

  • Added Creator Anke D. Leroux

    May 27, 2022 16:19 by Scholarly Communications and Copyright

  • Added Creator Paul A. Raschky

    May 27, 2022 16:19 by Scholarly Communications and Copyright

  • Published

    May 27, 2022 16:19 by Scholarly Communications and Copyright

  • Updated Keyword, Description Show Changes

    July 21, 2022 23:30 by pmk5516

    Keyword
    • Field experiment, Quasi-public goods, Non-market goods, Stated preference, Hypothetical bias
    Description
    • <p>The recent stated preference literature emphasises the importance of incentive compatible elicitation methods, which depend on respondent beliefs that payment can be collected if provision occurs. We investigate this condition in a randomised field experiment where stated choices are incentivised financially. The objective of the treatment was to make choices salient by making each decision financially relevant and to increase the respondents' beliefs that future payments will be enforced. Our results show that the treatment increases estimates of the marginal utility of income, with the effect being economically and statistically significant for low-income respondents. We develop a stylised theoretical framework that allows us to quantify the bias that is implied by the observed differences between the treated and control groups. We find that failure to account for respondents' doubts about payment coercion in an otherwise well-designed survey inflates the marginal willingness to pay among low-income respondents by a factor of at least 1.72.</p>
    • The recent stated preference literature emphasises the importance of incentive compatible elicitation methods, which depend on respondent beliefs that payment can be collected if provision occurs. We investigate this condition in a randomised field experiment where stated choices are incentivised financially. The objective of the treatment was to make choices salient by making each decision financially relevant and to increase the respondents' beliefs that future payments will be enforced. Our results show that the treatment increases estimates of the marginal utility of income, with the effect being economically and statistically significant for low-income respondents. We develop a stylised theoretical framework that allows us to quantify the bias that is implied by the observed differences between the treated and control groups. We find that failure to account for respondents' doubts about payment coercion in an otherwise well-designed survey inflates the marginal willingness to pay among low-income respondents by a factor of at least 1.72.
  • Updated Creator Daniel A. Brent

    April 20, 2023 15:28 by [unknown user]

  • Updated

    April 04, 2024 10:21 by [unknown user]