Uncertainty and framing in a valuation task

Stephane Luchini, Verity Watson

Research output: Contribution to journalArticle

9 Citations (Scopus)

Abstract

Many stated preference studies report framing effects in responses to valuation questions. Framing in stated preference studies occurs when respondents use irrelevant information contained in the question to help them value the good. This may occur because respondents are uncertain or do not hold well-formed preferences for the good in question. We investigate if respondent certainty explains framing effects in a contingent valuation study, using data from a double bounded dichotomous elicitation format and a follow-up certainty question. We investigate if respondent certainty influences anchoring and the shift effect. We find evidence that the anchoring effect is stronger for respondents who are less certain about their response to the contingent valuation question compared to respondents who are very certain. However, the shift effect is significant and negative only for respondents who are very certain. Our results indicate that certain respondents are more consistent with the predictions of rational behaviour than uncertain respondents.
Original languageEnglish
Pages (from-to)204-214
Number of pages11
JournalJournal of Economic Psychology
Volume39
Early online date22 Aug 2013
DOIs
Publication statusPublished - Dec 2013

Keywords

  • framing effects
  • certainty
  • contingent valuation

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