Understanding the consequences of consequentiality: Testing the validity of stated preferences in the field

Vossler, Christian and Watson, Sharon (2012): Understanding the consequences of consequentiality: Testing the validity of stated preferences in the field. Published in: Journal of Economic Behavior & Organization , Vol. 86, (February 2013): pp. 137-147.

Abstract

This study pursues the external validation of stated preference methods by comparing survey responses from verified voters with the outcome of a parallel public referendum on a conservation and preservation program to be funded by a local property tax surcharge. The majority of respondents were unaware of the upcoming referendum, and the experimental design allows us to control for referenda-related information effects as well as respondents’ perceptions regarding the consequentiality (i.e. the potential policy impact) of their survey votes. We find the survey under-predicts “yes” referendum votes at the precinct-level. These differences go away, however, if we focus only on respondents who perceived their survey vote to be consequential. Negative hypothetical bias among inconsequential survey respondents is also evident in the estimation of willingness to pay, and controlling for consequentiality increases construct validity.

• Item Type: MPRA Paper
• Language: English
• Keywords: stated preferences; voting; external validity; consequentiality; field experiment
• Subjects: C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C93 - Field Experiments; H - Public Economics > H4 - Publicly Provided Goods > H41 - Public Goods; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q51 - Valuation of Environmental Effects

References

Blumenschein, K., Blomquist, G.C., Johannesson, M., Horn, N., Freeman, P. 2008. Eliciting willingness to pay without bias: Evidence from a field experiment. The Economic Journal 118, 114-137.

Bulte, E., Gerking, S., List, J.A., de Zeeuw, A. 2005. The effect of varying the causes of environmental problems on stated WTP values: Evidence from a field study. Journal of Environmental Economics and Management 49, 330-342.

Cameron, T.A., James, M.D. 1987. Efficient estimation methods for use with “closed-ended” contingent valuation survey data. The Review of Economics and Statistics 69, 269-276.

Carson, R.T., Flores, N.E., Meade, N.F. 2001. Contingent valuation: Controversies and evidence. Environmental and Resource Economics 19, 173-210.

Carson, R.T., Groves, T. 2007. Incentive and informational properties of preference questions. Environmental and Resource Economics 37, 181-210.

Carson, R., Groves, T., List, J., Machina, M. 2004. Probabilistic influence and supplemental benefits: a field test of the two key assumptions underlying stated preferences. Working paper, Department of Economics, University of California, San Diego.

Carson, R.T., Hanemann, W.M., Mitchell, R.C. 1986. The use of simulated political markets to value public goods. Working paper, Department of Economics, University of California, San Diego.

Champ, P.A., Bishop, R.C., Brown, T.C., McCollum, D.W. 1997. Using donation mechanisms to value nonuse benefits from public goods. Journal of Environmental Economics and Management 33, 151-162.

Champ, P.A., Brown, T.C. 1997. A comparison of contingent and actual voting behavior. Proceedings from W-133 Benefits and Cost Transfer in Natural Resource Planning, 10th Interim Report.

Dillman, D.A., Smyth, J.D., Christian, L.M. 2008. Internet, Mail, and Mixed-Mode Surveys: The Tailored Design Method, 3rd ed. New York: John Wiley & Sons.

Farquharson, R. 1969. Theory of Voting. New Haven, Connecticut: Yale University Press.

Herriges, J., Kling, C., Liu, C.-C., Tobias, J. 2010. What are the consequences of consequentiality? Journal of Environmental Economics and Management 59(1), 67-81.

Johnston, R.J. 2006. Is hypothetical bias universal? Validating contingent valuation responses using a binding public referendum. Journal of Environmental Economics and Management 52, 469-481. Landry, C.E., List, J.A. 2007. Using ex ante approaches to obtain credible signals for value in contingent markets: evidence from the field. American Journal of Agricultural Economics 89, 420-432.

List, J.A., Gallet, C.A. 2001. What experimental protocol influence disparities between actual and hypothetical stated values? Evidence from a meta-analysis. Environmental and Resource Economics 20, 241-54.

Lopes, J. 2010. Middleborough voters approve Community Preservation Act. Middleborough Gazette, November 4.

Nepal, M., Berrens, R.P., Bohara, A.K. 2009. Assessing perceived consequentiality: Evidence from a contingent valuation survey on global climate change. International Journal of Ecological Economics and Statistics 14(P09), 14-29.

Schläpfer, F. 2006. Survey protocol and income effects in the contingent valuation of public goods: A meta-analysis. Ecological Economics 57, 415-429.

Schläpfer, F., Roschewitz, A., Hanley, N. 2004. Validation of stated preferences for public goods: a comparison of contingent valuation survey response and voting behavior. Ecological Economics 51(1-2), 1-16.

Vossler, C.A., Doyon, M., Rondeau, D. 2012. Truth in consequences: Theory and field evidence on discrete choice experiments. American Economic Journal: Microeconomics 4(4), 145-171.

Vossler, C.A., Evans, M.F. 2009. Bridging the gap between the field and the lab: Environmental goods, policy maker input, and consequentiality. Journal of Environmental Economics and Management. 58(3), 338-345.

Vossler, C.A., Kerkvliet, J. 2003. A criterion validity test of the contingent valuation method: Comparing hypothetical and actual voting behavior for a public referendum. Journal of Environmental Economics and Management 45(3), 631-649.

Vossler, C.A., Kerkvliet, J., Polasky, S., Gainutdinova, O. 2003. Externally validating contingent baluation: An open-space survey and referendum in Corvallis, Oregon. Journal of Economic Behavior and Organization 51(2), 261-277.

Wooldridge, J.M. 2010. Econometric Analysis of Cross Section and Panel Data, 2nd Ed. Cambridge, Massachusetts: The MIT Press.