Using Ex Ante Approaches to Obtain Credible Signals for Value in Contingent Markets: Evidence from the Field

10 Pages Posted: 24 Apr 2020

See all articles by Craig E. Landry

Craig E. Landry

UGA Ag & Applied Economics

John A. List

University of Chicago - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: May 2007

Abstract

While contingent valuation remains the only option available for measurement of total economic value of nonmarketed goods, the method has been criticized due to its hypothetical nature. We analyze field experimental data to evaluate two ex ante approaches to attenuating hypothetical bias, directly comparing value statements across four distinct referenda: hypothetical, “cheap talk,” “consequential,” and real. Our empirical evidence suggests two major findings: hypothetical responses are significantly different from real responses; and responses in the consequential and cheap talk treatments are statistically indistinguishable from real responses. We review the potential for each method to produce reliable results in the field.

Keywords: hypothetical bias, referendum, stated preference

Suggested Citation

Landry, Craig and List, John A., Using Ex Ante Approaches to Obtain Credible Signals for Value in Contingent Markets: Evidence from the Field (May 2007). American Journal of Agricultural Economics, Vol. 89, Issue 2, pp. 420-429, 2007, Available at SSRN: https://ssrn.com/abstract=3583764 or http://dx.doi.org/10.1111/j.1467-8276.2007.01017.x

Craig Landry (Contact Author)

UGA Ag & Applied Economics ( email )

Athens, GA 30602-7509
United States

John A. List

University of Chicago - Department of Economics ( email )

1126 East 59th Street
Chicago, IL 60637
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

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Germany

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