Bias In Willingness Research Articles

Distributional weighting and welfare/equity tradeoffs: a new approach

AbstractThere are increasing calls for concrete suggestions on how to account for distributional impacts in policy analysis. Within the context of benefit-cost analysis, per se, one possibility is to apply “distributional weights,” to inflate costs and benefits experienced by poor or disadvantaged groups. We distinguish between “utility-weights,” intended to correct for the bias in willingness to pay caused by diminishing marginal utility of income, and “equity-weights,” intended to account for the possibility that decision makers might have disproportional concern about the welfare of the poor or other disadvantaged groups. We argue that utility-weights are appropriate and necessary to maintain the legitimacy of BCA as a measure of aggregate welfare, but that equity-weights are inappropriate because they involve moral judgments that should remain in the domain of democratically accountable decision makers, and because they conflate information about both the welfare and equity impacts of policies, making it impossible for decision-makers to apply their own moral values to the assessment of tradeoffs between welfare and equity. We offer concrete suggestions regarding the application of utility-weights and the calculation of a set of metrics to provide intuitively comprehensible and useful information about, and allow decision makers to quantitatively assess the tradeoffs between, welfare and equity caused by specific policies.

Experimental quantity, mental budgeting and food choice: a discrete choice experiment application

Abstract Food discrete choice experiments typically define product alternatives with a researcher-predetermined and sometimes arbitrary quantity. Results reveal that the use of a researcher-prespecified experimental quantity leads to biased welfare estimates. Differences in marginal utility of money are found with a resulting upward bias in willingness to pay estimates when small pre-defined product quantities are used. Higher-income consumers show more evident bias. This evidence cautions the use of a researcher-predetermined quantity to design alternatives in choice tasks and also proposes an alternative experimental design that accounts for these effects by matching the quantity in experiments to consumer’s actual purchase quantity.

Unwilling to Un-Blame: Whites Who Dismiss Historical Causes of Societal Disparities Also Dismiss Personal Mitigating Information for Black Offenders

When will racial bias in blame and punishment emerge? Here, we focus on White people's willingness to “un-blame” Black and White offenders upon learning of their unfortunate life histories or biological impairments. We predicted that personal mitigating narratives of Black (but not White) offenders would be ignored by Whites who are societal-level anti-historicists. Societal-level anti-historicists deny that a history of oppression by Whites has shaped current societal-level intergroup disparities. Thus, our prediction centers on how societal-level beliefs relate to bias against individuals. Our predictions were confirmed in three studies. In one of those studies, we also showed how racial bias in willingness to un-blame can be removed: Societal-level anti-historicists became open to mitigation for Black offenders if they were reminded that the offender began as an innocent baby. Results are discussed in terms of how the rich literature on blame and moral psychology could enrich the study of racial bias.

The Extent of Hypothetical Bias in Willingness to Accept

Hypothetical bias (HB) is often considered a main source of weakness for valuation surveys of any kind and the bias is thought to be even stronger if the valuation process is framed as willingness to accept (WTA) rather than willingness to pay (WTP). Using data collected after reviewing both published and unpublished articles, we conduct a meta‐analysis of whether and to what extent WTA studies may have HB. Out of the eighty‐six records from twenty‐one studies that used WTA elicitation methods in both hypothetical and real elicitations, one study appears to have influenced the perception of extreme HB in WTA. Most exhibit no evidence of HB or evidence that it is a less severe problem for hypothetical WTA studies compared to historic patterns for WTP studies. We then conduct a field experiment eliciting both hypothetical and real WTA for a container of honey. Results show no evidence of HB based on no significant difference in WTA between the two treatments. Our findings challenge the long‐held belief to avoid WTA elicitations for fear of exaggerated economic values and associated HB.

Self-Image and Hypothetical Bias in Willingness to Pay Elicitation: The Case of a Private Good

Stated willingness-to-pay from hypothetical surveys generally exceeds revealed willingness-to-pay from real purchase experiments. One explanation for this hypothetical bias which has been put forward is that participants use high willingness-to-pay statements for public goods to improve their moral self-image. This paper formalizes the argument by building on the reputation model of Benabou and Tirole (2006) and extends it to private goods by applying the concept of ideal self-congruity from consumer research. In the resulting theory people enhance their self-image by showing support for a desired product image. The comparative statics effects for changes in the intrinsic valuation of a good and self-image concerns derived from the formal model are tested in a 2x2 between subject design with 395 participants and a private good. The results indicate that higher self-image concerns lead to an increase in the hypothetical bias while greater valuation for the good leads to a decrease in the bias.

Mitigating hypothetical bias in willingness to pay studies: post-estimation uncertainty and anchoring on irrelevant information.

One possible source of hypothetical bias in willingness to pay (WTP) estimates is response uncertainty, referring to subject's uncertainty about the value of the good under assessment. It has been argued that uncertainty can be measured using the post-valuation 'certainty question' that asks: 'How certain are you about your stated WTP?' and marks the degree of certainty on a quantitative or a qualitative scale. Research has shown that the self-reported certainty evaluations can help mitigate hypothetical bias and obtain increasingly accurate WTP estimates. These study reports present a simple test of reliability of post-valuation certainty assessment and then looks at the empirical evidence for clues regarding the general usefulness of certainty adjustment in mitigating hypothetical bias in WTP studies. We find that the post-estimation uncertainty scores are malleable, i.e., significantly correlated with entirely irrelevant information. We conclude that more robust evidence could justify the routine inclusion of certainty evaluation in WTP studies although in the meantime the interpretation of certainty-adjusted WTP values should be approached cautiously.

Hypothetical Bias in Risk Preferences as a Driver of Hypothetical Bias in Willingness to Pay: Experimental Evidence

This study provides new insight on the established issue of elicitation bias in hypothetical choice settings. In particular, using an experiment that elicits real and hypothetical willingness to pay for the protection of otters, we provide evidence that the observed bias is driven by those who are both uncertain about their value and exhibit hypothetical bias in risk attitudes. This finding provides a reason why calibration approaches based on follow-up certainty questions have proven useful, but also suggests a degree of caution in applying the approach. Our results favour combining uncertainty calibration with CVM-X in which hypothetical bias in risk attitudes is also taken account to correct for hypothetical bias in WTP.

The social benefits and costs of preserving forest biodiversity and ecosystem services

Ecologists recommend preserving more of the old-growth forests in Norway, as half of the species have forests as their main habitat and many are in decline. We investigate benefits and costs over a 50-year period of increasing forest conservation from 1.4% of the productive forest area (the situation in 2007) to 2.8% (doubling), 4.5% (‘ecologists’ minimum’) and 10% (one goal suggested in public debate). The benefits are estimated based on a national contingent valuation (CV) survey of Norwegian households. Two independent measures of total costs are used: (1) the actual compensation amounts paid to forest owners and (2) results from a survey of forest owners’ minimum willingness to accept compensation to preserve. Results show that social benefits outweigh costs of the three conservation plans by a large margin. The middle option of 4.5% has the highest net present value. This result is robust to a range of assumptions, including considerations of potential hypothetical bias in willingness to pay estimates. The results of this cost–benefit analysis reflect the preferences of the general population, the authorities and the forest owners with respect to biodiversity and ecosystem services conservation, and supplement the expert opinion of ecologists.

Testing for hypothetical bias in willingness to support a reforestation program

Abstract This study measures hypothetical bias in CVM-based estimates of willingness to support a forest protection and restoration program in Poland. It does so in two parallel ways: within- and between-subjects. To this end, participants are asked to vote in a referendum on an NGO-led reforestation project for various per-capita cost levels. They do so either directly or, as a surprise continuation, after a hypothetical analogue. Both methods deliver a similar (and substantial) level of hypothetical bias – it is slightly higher, but not significantly so, in the between-subject comparison. This suggests that hypothetical bias in this context is not primarily driven by such factors as consistency seeking or impression management.

A Bayesian examination of information and uncertainty in contingent valuation

A theoretical framework is presented to explain how agents respond to information under uncertainty in contingent valuation surveys. Agents are provided with information signals and referendum prices as part of the elicitation process. Agents use Bayesian updating to revise prior distributions. An information prompt is presented to reduce hypothetical bias. However, we show the interaction between anchoring and the information prompt creates a systematic bias in willingness to pay. We test our hypotheses in an experimental setting where agents are asked to make a hypothetical, voluntary contribution to a public good. Experimental results are consistent with the model.

Change among the Gatekeepers: Men, Masculinities, and Gender Equality in the Global Arena

Change among the Gatekeepers: Men, Masculinities, and Gender Equality in the Global Arena

Hypothetical bias and willingness to accept

We design and implement simple laboratory experiments to measure the bias in willingness to pay settings. Once identified, this bias can be corrected or compared to the bias found in comparable willingness to pay settings.