How Does the Cost Vector Affect Payment Consequentiality in a Binary Choice Contingent Valuation Survey?

Payment consequentiality should improve the validity of welfare estimates in stated preference surveys according to a growing body of research. In this article, we study whether the type of amounts (precision, parity) that make up the cost vector affects payment consequentiality. Our experiment cons...

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Bibliographic Details
Published in:Land economics 2024-05, Vol.100 (2), p.245-255
Main Authors: Mahieu, Pierre-Alexandre, Crastes dit Sourd, Romain, Gastineau, Pascal, Chèze, Benoît, Taylor, Andrea
Format: Article
Language:English
Subjects:
Cognitive science
Contingent valuation
Costs
Payments
Quantitative Finance
Renewable energy
Surveys
Welfare
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Summary:Payment consequentiality should improve the validity of welfare estimates in stated preference surveys according to a growing body of research. In this article, we study whether the type of amounts (precision, parity) that make up the cost vector affects payment consequentiality. Our experiment consists of a binary choice survey on renewable energy where the cost amounts range between €0.5 and €25. For small amounts, we find that precision increases payment consequentiality. For larger amounts, even numbers perform better than odd numbers. Our results suggest that the type of cost amount (e.g., even/odd, general/precise) should be carefully considered by the analyst.
ISSN:0023-7639
1543-8325
DOI:10.3368/le.100.2.111821-0135R1