On Inferring Demand for Health Care in the Presence of Anchoring, Acquiescence, and Selection Biases
29 Pages Posted: 19 Mar 2008 Last revised: 22 May 2022
Date Written: March 2008
Abstract
In the contingent valuation literature, both anchoring and acquiescence biases pose problems when using an iterative bidding game to infer willingness to pay. Anchoring bias occurs when the willingness to pay estimate is sensitive to the initially presented starting value. Acquiescence bias occurs when survey respondents exhibit a tendency to answer 'yes' to questions, regardless of their true preferences. More generally, whenever a survey format is used and not all of those contacted participate, selection bias raises concerns about the representativeness of the sample. In this paper, we estimate students' willingness to pay for student health care at Stanford University while accounting for all of these biases. As there is no cost sharing for students, we assess willingness to pay by having a random sample of students play an online iterative bidding game. Our main results are that (1) demand for student health care is elastic by conventional standards; (2) ignoring anchoring bias would lead to a substantially biased measure of the demand elasticity; (3) there is evidence for acquiescence bias in student answers to the opening question of the iterative bidding game and failure to address this leads to the biased conclusion that demand is inelastic; and (4) standard selection correction methods indicate no bias from selective non-response and newer bounding methods support this conclusion of elastic demand.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
A Test for Anchoring and Yea-Saying in Experimental Consumption Data
By Arthur van Soest and Michael D. Hurd
-
A Test for Anchoring and Yea-Saying in Experimental Consumption Data
By Arthur van Soest and Michael D. Hurd
-
Models for Anchoring and Acquiescence Bias in Consumption Data
By Arthur van Soest and Michael D. Hurd
-
Models for Anchoring and Acquiescence Bias in Consumption Data
By Arthur van Soest and Michael D. Hurd
-
The Link between Individual Expectations and Savings: Do Nursing Home Expectations Matter?
By Kristin J. Kleinjans and Jinkook Lee
-
Optimal Decision Processes: On the Choice Between Environmental Valuation Methods
-
How Do Lower-Income Families Think About Retirement?
By Helen Levy and Kristin Seefeldt
-
How Do Lower-Income Families Think About Retirement?
By Helen Levy and Kristin Seefeldt