Title
Investigating willingness to pay : willingness to accept asymmetry in choice experiments
Description
We examine discrepancies between WTP and WTA responses within a choice experiment frame. We test linear and non-linear forms for the utility function allowing for both declining marginal utility and loss aversion with respect to each attribute. Findings show that there are significant non-linearities in the utility function even when the range of attribute levels is relatively small. This in turn implies that the WTP-WTA ratio varies according to the particular provision change under consideration. An important source for the WTP-WTA disparity observed is found to be significant loss-aversion in all the attributes including the price, an issue not typically considered in choice experiment applications.
URL
http://www.eftec.co.uk/UKNEE/envecon/2009_documents/envecon2009_ECONOMIC_VALUATIOM_Provins_et_al.pdf
URL Description
Full text
Language
English
Author
Bruno Lanz
Author
Ece Ozdemiroglu
Author
Ken Willis
Author
Allan Provins
Author
Ian Bateman
Author
Ken G. Willis

experimental economics; economics; choice; decision making; human behaviour

Notes
Conference was held at The Royal Society, London.
Body involved
UK Network of Environmental Economists (UKNEE)
Is this item peer reviewed?
No
Body involved role
Organiser
Conference event title
Envecon 2009 : applied environmental economics
ConferenceLocation
London
Conference number
7th
ConferenceDate
20 March 2009
Harvard
Lanz, Bruno et al Investigating willingness to pay : willingness to accept asymmetry in choice experiments. Envecon 2009 : applied environmental economics, 7th, London, 2009.
Vancouver
Lanz Bruno et al. Investigating willingness to pay : willingness to accept asymmetry in choice experiments. Envecon 2009 : applied environmental economics, 7th, London, 2009.