On Misrepresentation of Altruistic Preferences in Discrete-Choice Experiments

The purpose of this note is to address a problem faced in using stated preference methods to estimate willingness to pay (WTP) for a project. The considered problem occurs under pure altruism. Even though an agent is equipped with well-behaved preferences, a conventional closedended (binary) valuati...

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Bibliographic Details
Published in:Journal of agricultural and resource economics 2021-01, Vol.46 (1), p.126-133
Main Authors: Johansson, Per-Olov, Kriström, Bengt
Format: Article
Language:English
Subjects:
Altruism
Consumption
Economics
Experiments
Income
Institutional and Behavioral Economics
Nationalekonomi
Preferences
Public good
Tax rates
Taxation
Teaching/Communication/Extension/Profession
Valuation
Willingness to pay
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Summary:The purpose of this note is to address a problem faced in using stated preference methods to estimate willingness to pay (WTP) for a project. The considered problem occurs under pure altruism. Even though an agent is equipped with well-behaved preferences, a conventional closedended (binary) valuation question may induce her to overrate or underrate her true WTP. On the other hand, an open-ended valuation format seemingly provides a correct answer, but such a format fails to be incentive compatible.
ISSN:1068-5502
2327-8285
2327-8285
DOI:10.22004/ag.econ.303599