WAEA Keynote Address: Strategies for Overcoming Hypothetical Bias in Stated Preference Surveys

• Main Author: John B. Loomis
• Format: Article
• Language: English
• Published: Western Agricultural Economics Association 2014-04-01
• Series: Journal of Agricultural and Resource Economics
• Subjects: choice experiments; conjoint analysis; contingent valuation; hypothetical bias; meta-analysis; nonmarket valuation; stated preference methods
• Online Access: https://ageconsearch.umn.edu/record/168258

In some, but not all, contexts, respondents to stated preference valuation studies state a willingness to pay (WTP) higher than what lab or field experiments indicate is the actual amount they would pay. However, several ex ante survey design strategies and ex post calibration techniques can be used to minimize or eliminate hypothetical bias. This article reviews and presents evidence on the effectiveness of these ex ante and ex post approaches. The ex ante approaches lead to recommendations to modify survey designs to minimize the bias up front. If the analyst desires, ex post calibration of WTP using certainty scales can be used to reduce stated WTP to the point at which it will match actual cash contributions.