New paper in JEEM
Our paper “Convergent Validity in Incentive-Compatible Contingent Valuation: Bid-vector and elicitation format effects” is now published in the Special Issue on Non-Market Valuation in the Journal of Environmental Economics and Management (JEEM). It was quite a long road, starting with a discussion of which elicitation format we should use in our study. Every co-author had a different opinion, and in the end we couldn’t settle on just one. The only way forward was to apply all of them in a pre-registered experimental design and see whether they converged. This process really shows how great research papers are often the product of curiosity, rather than a strict response to an advertised research call. I’m really glad about how it worked out in the end.
The paper essentially tests whether three “theory-driven” ways of asking people about their willingness to pay, a simple yes/no vote, a payment card, and an open-ended question, actually agree with each other once you try to make them all incentive-compatible. We ran a large pre-registered survey (over 12,000 people across six European countries) asking about willingness to pay for an EU-wide biodiversity program, and we also varied the range of amounts people were shown. We find that the formats don’t agree: people’s stated willingness to pay differs substantially depending on which format they got, and even within the same format, it changes depending on which range of amounts was shown. Some of this comes down to behavioral factors (people tend to just keep saying “yes” as the amounts get higher in the simple yes/no format), but some of it also comes down to how the underlying statistics are modeled, which was a bit of a surprising twist for us.
The paper can be found here.