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 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 the price attribute, an issue not typically considered in choice experiment applications.
URL
http://www.webmeets.com/files/papers/EAERE/2009/187/WTP-WTA%20Asymmetry%20in%20CEs_EAERE%20submission%20230109.pdf
URL Description
Full text
Language
English
Author
Allan Provins
Author
R. Scarpa
Author
Bruno Lanz
Author
Ece Ozdemiroglu
Author
Ian Bateman
Author
Ken G. Willis

experimental economics; loss aversion; stated choice; choice; decision making; cognitive processes

Body involved
EAERE, Vrije Universiteit (VU University Amsterdam)
Is this item peer reviewed?
No
Body involved role
Organisers
Conference event title
Annual Conference of the European Association of Environmental and Resource Economists (EAERE 2009)
ConferenceLocation
Vrije Universiteit, Amsterdam
Conference number
17th