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Chapter 7: Consequentiality and Contingent Values: An Emerging Paradigm
7 Consequentiality and contingent values: an emerging paradigm Gregory L. Poe and Christian A. Vossler In recent years a new paradigm has emerged with respect to the concept of ‘hypothetical bias’ in contingent valuation. Following Bohm’s (1972) seminal public goods experiments, empirical criterion validity tests of contingent valuation have sought to compare hypothetical (‘stated’) survey responses against the criterion of actual (‘revealed’) economic commitments to public goods: ‘Hypothetical bias is said to exist when values that are elicited in a hypothetical context, such as a survey, differ from those elicited in a real context, such as a market’ (Harrison and Ruström, 2008, p. 752). Whereas occasional research has found that hypothetical, stated values can be lower than actual commitments, reviews of hypothetical versus actual public goods contributions (for example, Harrison and Ruström, 2008; Murphy and Stevens, 2004) and meta-analyses of these data suggest ‘that people tend to overstate their actual willingness to pay in hypothetical situations’ (List and Gallet, 2001, p. 241; see also Little and Berrens, 2004; Murphy et al., 2005). These conclusions translate into what appears to be the conventional wisdom regarding contingent valuation (CV): ‘A fundamental concern of any CV study is hypothetical bias. Respondents have a well-established tendency to state willingness to pay values that are significantly greater than those revealed in real-market interactions’ (Aadland et al., 2007). In a series of conference presentations, working papers, and a journal article, Richard Carson and Theodore Groves and co-authors (for example, Carson and Groves, 2007; Carson...
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