A new meta-analysis on the WTP/WTA disparity

Tuncel, Tuba and Hammitt, James K. (2014) A new meta-analysis on the WTP/WTA disparity. Journal of Environmental Economics and Management, 68 (1). pp. 175-187.

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Official URL: http://tse-fr.eu/pub/28509

Abstract

This study reports a new meta-analysis of papers that elicit willingness-to-pay (WTP) and willingness-to-accept compensation (WTA) measures of value for the same good. We investigate the effects of type of good and several survey-design features on the WTP/WTA disparity, measured as the logarithm of the ratio of mean WTA to mean WTP. Confirming Horowitz and McConnell׳s (2002) pioneering meta-analysis, we find the disparity is smaller for ordinary private goods than for public and non-market goods, that it is not solely an artifact of using hypothetical transactions or other weak experimental or survey methods, and that it is smaller for studies using student subjects. In addition, we find that the disparity is smaller when subjects have experience valuing the good in real markets or through repeated experimental trials. In contrast to Horowitz and McConnell, we find the disparity is significantly smaller in studies using incentive-compatible elicitation mechanisms. The disparity is smaller in more recent studies, an effect that is attributable only in part to changes in study characteristics.

Item Type: Article
Language: English
Date: July 2014
Refereed: Yes
Uncontrolled Keywords: willingness to pay, willingness to accept, stated-preference
JEL codes: D61 - Allocative Efficiency; Cost-Benefit Analysis
Q51 - Valuation of Environmental Effects
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 16 Mar 2015 14:50
Last Modified: 15 May 2019 10:04
OAI ID: oai:tse-fr.eu:28509
URI: http://publications.ut-capitole.fr/id/eprint/16582

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