External validity of contingent valuation: comparing hypothetical and actual payments
External validity of contingent valuation: comparing hypothetical and actual payments
Whilst contingent valuation is increasingly used in economics to value benefits, questions remain concerning its external validity that is do hypothetical responses match actual responses? We present results from the first within sample field test. Whilst Hypothetical No is always an Actual No, Hypothetical Yes exceed Actual Yes responses. A constant rate of response reversals across bids/prices could suggest theoretically consistent option value responses. Certainty calibrations (verbal and numerical response scales) minimise hypothetical–actual discrepancies offering a useful solution. Helping respondents resolve uncertainty may reduce the discrepancy between hypothetical and actual payments and thus lead to more accurate policy recommendations.
1467-1473
Ryan, Mandy
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Mentzakis, Emmanouil
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Jareinpituk, Suthi
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Cairns, John
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November 2017
Ryan, Mandy
92290d80-9a03-4b84-a695-9b3573319e52
Mentzakis, Emmanouil
c0922185-18c7-49c2-a659-8ee6d89b5d74
Jareinpituk, Suthi
d32de71f-62ea-4ff9-8925-1e702a330033
Cairns, John
bab5dd87-f5f1-4b7c-9c44-2b1c766b3a69
Ryan, Mandy, Mentzakis, Emmanouil, Jareinpituk, Suthi and Cairns, John
(2017)
External validity of contingent valuation: comparing hypothetical and actual payments.
Health Economics, 26 (11), .
(doi:10.1002/hec.3436).
Abstract
Whilst contingent valuation is increasingly used in economics to value benefits, questions remain concerning its external validity that is do hypothetical responses match actual responses? We present results from the first within sample field test. Whilst Hypothetical No is always an Actual No, Hypothetical Yes exceed Actual Yes responses. A constant rate of response reversals across bids/prices could suggest theoretically consistent option value responses. Certainty calibrations (verbal and numerical response scales) minimise hypothetical–actual discrepancies offering a useful solution. Helping respondents resolve uncertainty may reduce the discrepancy between hypothetical and actual payments and thus lead to more accurate policy recommendations.
Text
ExternalValidity_HE.pdf
- Accepted Manuscript
More information
Accepted/In Press date: 8 September 2016
e-pub ahead of print date: 9 October 2016
Published date: November 2017
Organisations:
Economics
Identifiers
Local EPrints ID: 403621
URI: http://eprints.soton.ac.uk/id/eprint/403621
ISSN: 1099-1050
PURE UUID: 223d4af9-ca2a-4de1-b22a-00e5ca17a468
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Date deposited: 07 Dec 2016 13:56
Last modified: 16 Mar 2024 04:10
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Contributors
Author:
Mandy Ryan
Author:
Suthi Jareinpituk
Author:
John Cairns
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