External Validity of Contingent Valuation: Comparing Hypothetical and Actual Payments

Mandy Ryan (Corresponding Author), Emmanouil Mentzakis, Suthi Jareinpituk, John Cairns

Research output: Contribution to journalArticle

3 Citations (Scopus)
9 Downloads (Pure)

Abstract

Whilst contingent valuation is increasingly used in economics to value benefits, questions remain concerning its external validity i.e. do hypothetical responses match actual responses? We present results from the first within sample field test. Whilst Hypothetical No are always an Actual No, Hypothetical Yes exceed Actual Yes responses. A constant rate of response reversals across bids/prices could suggest theoretically consistent option value responses. Certainty calibrations (verbal and numerical response scales) minimize hypothetical-actual discrepancies offering a useful solution. Helping respondents resolve uncertainty may reduce the discrepancy between hypothetical and actual payments, and thus lead to more accurate policy recommendations.
Original languageEnglish
Pages (from-to)1467-1473
Number of pages7
JournalHealth Economics
Volume26
Issue number11
Early online date9 Oct 2016
DOIs
Publication statusPublished - Nov 2017

Keywords

  • contingent valuation
  • external validity
  • certainty

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