Validity of willingness to pay measures under preference uncertainty
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Recent studies in the marketing literature developed a new method for eliciting willingness to pay (WTP) with an open-ended elicitation format: the Range-WTP method. In contrast to the traditional approach of eliciting WTP as a single value (Point-WTP), Range-WTP explicitly allows for preference uncertainty in responses. The aim of this paper is to apply Range-WTP to the domain of contingent valuation and to test for its theoretical validity and robustness in comparison to the Point-WTP. Using data from two novel large-scale surveys on the perception of solar radiation management (SRM), a little-known technique for counteracting climate change, we compare the performance of both methods in the field. In addition to the theoretical validity (i.e. the degree to which WTP values are consistent with theoretical expectations), we analyse the test-retest reliability and stability of our results over time. Our evidence suggests that the Range-WTP method clearly outperforms the Point-WTP method.
Braun , C , Rehdanz , K & Schmidt , U 2016 , ' Validity of willingness to pay measures under preference uncertainty ' , PLoS One , vol. 11 , no. 4 . https://doi.org/10.1371/journal.pone.0154078
© 2016 Braun et al. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
DescriptionThis paper is part of the project ACCEPT, which is funded by the German Federal Ministry for Education and Research (grant number 01LA1112A). The publication of this article was funded by the Open Access fund of the Leibniz Association. All data is available on the project homepage (https://www.ifw-kiel.de/forschung/umwelt/projekte/accept) and from Figshare (https://dx.doi.org/10.6084/m9.figshare.3113050.v1).
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