Real payment priming to reduce potential hypothetical bias

Abstract

Stated Preference (SP) valuation methods are often challenged by the existence of Hypothetical Bias (HB), often as individuals overstating their willingness to pay for a good or service in a hypothetical elicitation. A relatively new method shown to effectively reduce this upward bias is priming. However, these existing priming methods rely on relatively lengthy word or sentence tasks in order to prime respondents. Such tasks are costly in terms of survey time and participant effort, resulting in cognitive overload with benefits limited only to the elicitation. We propose a “real payment priming” method, which takes advantage of a real valuation, where actual payment would occur, prior to a hypothetical valuation. Results show that priming through real payment on one good effectively reduces potential HB in the subsequent hypothetical valuation on another good. Our method enables a wider scope of applications particularly when researchers have multiple valuation tasks, obviating the need for an extra priming task, or that the two goods are identical or similar.