Edward Leamer and Josh Lustig
Michael Kemp, Edward Leamer, James Burrows and Powell Dixon
This chapter presents findings from a study exploring a variety of tactics intended to enhance respondent awareness of budget constraints in answering CV questions, including methods that value a composite good and allocate a total value across different parts of the composite. The research used, as a test bed, a prominent 1995 survey concerning the prevention and remediation of marine oil spills off the central California coast (the “COS study”). Approximately 2400 California households were surveyed online in 2014. Analysis of the responses to split-sample variants of the questionnaire produced the following conclusions: (1) the study evidenced a very marked lack of sensitivity to a huge scope difference (between the COS good and a much larger composite good); (2) the composite good estimate of WTP allocated to marine oil spills was markedly smaller than the single-focus estimate; (3) sizeable proportions of respondents reported various types of cognition difficulties in their responses, and the resulting WTP estimates are sensitive to those difficulties; (4) respondents presented a single-focus COS referendum after completing a budget allocation exercise were slightly less favorable to COS than those not given the budget exercise; (5) a sizeable proportion of respondents experienced cognition difficulties with part-whole relationships; and (6) within-questionnaire “wording additions” intended to enhance budget awareness had a relatively small effect on WTP estimates.