An Experimental Validation of Hypothetical WTP for a Recyclable Product
[ABSTRACT READ IN FULL at the IDEAS RePEc article record, which prints the publisher abstract entire; full text not read] Camacho-Cuena, E., Garcia-Gallego, A., Georgantzis, N., & Sabater-Grande, G. (2004). 'An Experimental Validation of Hypothetical WTP for a Recyclable Product.' Environmental and Resource Economics, 27(3), 313-335. doi:10.1023/B:EARE.0000017657.08513.74. The closest thing in the literature to an incentive-compatible test of what people will actually pay for recyclability, and the finding is the opposite of the easy story. In their words: 'Using a within-subject experiment, we compare hypothetical and real willingness to pay (WTP) for an improvement in the recyclability of a product. Subjects are faced with a real payment scenario after they have responded to a hypothetical question. Contrary to most of the results obtained in similar studies, at a population level, there are no significant median differences between actual and hypothetical stated values of WTP. However, within-subject comparisons between hypothetical and actual values indicate that subjects stating a low (high) hypothetical WTP tend to underestimate (overestimate) the value of their actual contributions.' So at the level of a population what people said they would pay for better recyclability was what they then paid, while individually they were wrong in both directions, with the enthusiasts overstating and the sceptics understating, which cancels in the median and does not cancel for any individual. State all three limits: laboratory, no sample size obtainable, and 2004.
[ABSTRACT READ IN FULL at the IDEAS RePEc article record, which prints the publisher abstract entire; full text not read] Camacho-Cuena, E., Garcia-Gallego, A., Georgantzis, N., & Sabater-Grande, G. (2004). 'An Experimental Validation of Hypothetical WTP for a Recyclable Product.' Environmental and Resource Economics, 27(3), 313-335. doi:10.1023/B:EARE.0000017657.08513.74. The closest thing in the literature to an incentive-compatible test of what people will actually pay for recyclability, and the finding is the opposite of the easy story. In their words: 'Using a within-subject experiment, we compare hypothetical and real willingness to pay (WTP) for an improvement in the recyclability of a product. Subjects are faced with a real payment scenario after they have responded to a hypothetical question. Contrary to most of the results obtained in similar studies, at a population level, there are no significant median differences between actual and hypothetical stated values of WTP. However, within-subject comparisons between hypothetical and actual values indicate that subjects stating a low (high) hypothetical WTP tend to underestimate (overestimate) the value of their actual contributions.' So at the level of a population what people said they would pay for better recyclability was what they then paid, while individually they were wrong in both directions, with the enthusiasts overstating and the sceptics understating, which cancels in the median and does not cancel for any individual. State all three limits: laboratory, no sample size obtainable, and 2004.
Written from the aBSTRACT READ IN FULL at the IDEAS RePEc article record, which prints the publisher abstract entire; full text not read.
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Camacho-Cuena, E., Garcia-Gallego, A., Georgantzis, N., & Sabater-Grande, G. (2004). An Experimental Validation of Hypothetical WTP for a Recyclable Product. Environmental and Resource Economics, 27(3), 313-335. doi:10.1023/B:EARE.0000017657.08513.74