Resolving Questions About Bias in Real and Hypothetical Referenda

13 Pages Posted: 12 Sep 2013

See all articles by Anthony Burton

Anthony Burton

Government of New Zealand - Treasury

Katherine Silz Carson

US Air Force Academy

Susan M. Chilton

University of Newcastle - Economics

W. George Hutchinson

Queen's University Belfast

Date Written: December 1, 2007

Abstract

Despite 10 years of research on behavior in hypothetical referenda, conflict remains in the literature on whether or not the mechanism generates biased responses compared to real referenda, and the nature and source of any such bias. Almost all previous inquiry in respect of this issue has concentrated on bias at the aggregate level. This paper reports a series of three experiments which focuses on bias at the individual level and how this can translate to bias at the aggregate level. The authors argue that only an individual approach to hypothetical bias is consistent with the concept of incentive compatibility. The results of these experiments reflect these previous conflicting findings but go on to show that individual hypothetical bias is a robust result driven by the differing influence of pure self-interest and other-regarding preferences in real and hypothetical situations, rather than by a single behavioral theory such as free riding. In a hypothetical situation these preferences cause yea-saying and non-demand revealing voting. This suggests that investigation of individual respondents in other hypothetical one-shot binary choices may also provide us with insights into aggregate behavior in these situations.

Keywords: Experimental economics, real referenda, hypothetical referenda, demand revelation, hypothetical bias, non-market valuation

JEL Classification: C91, Q51

Suggested Citation

Burton, Anthony and Carson, Katherine Silz and Chilton, Susan M. and Hutchinson, W. George, Resolving Questions About Bias in Real and Hypothetical Referenda (December 1, 2007). Environmental and Resource Economics, Vol. 38, No. 4, 2007. Available at SSRN: https://ssrn.com/abstract=2324296

Anthony Burton

Government of New Zealand - Treasury

No. 1, The Terrace
Wellington, 6011
New Zealand

Katherine Silz Carson (Contact Author)

US Air Force Academy ( email )

HQ USAFA/DFEG
2354 Fairchild Drive, Suite 6K110
USAF Academy, CO 80840-6299
United States

Susan M. Chilton

University of Newcastle - Economics ( email )

Newcastle-upon-Tyne NE1 7RU
United Kingdom

W. George Hutchinson

Queen's University Belfast ( email )

David Leir Building
Belfast, BT9 5AG
Ireland

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