Validity of Willingness to Pay Measures under Preference Uncertainty

Braun, C., Rehdanz, Katrin and Schmidt, Ulrich (2016) Validity of Willingness to Pay Measures under Preference Uncertainty Plos One, 11 (4). DOI http://dx.doi.org/10.1371/journal.pone.0154078.

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Abstract

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.

Document Type: Article
Additional Information: Times Cited: 0 Braun, Carola Rehdanz, Katrin Schmidt, Ulrich
Research affiliation: Kiel University > Kiel Marine Science
Kiel University
OceanRep > The Future Ocean - Cluster of Excellence
Refereed: Yes
DOI etc.: http://dx.doi.org/10.1371/journal.pone.0154078
ISSN: 1932-6203
Projects: Future Ocean
Date Deposited: 18 Mar 2017 12:19
Last Modified: 18 Mar 2017 12:19
URI: http://eprints.uni-kiel.de/id/eprint/36025

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