Comparing Open-Ended Choice Experiments and Experimental Auctions: An Application to Golden Rice

• Published in: American journal of agricultural economics 2009-08, Vol.91 (3), p.837-853
• Main Authors: Corrigan, Jay R, Depositario, Dinah Pura T, Nayga, Jr, Rodolfo M, Wu, Ximing, Laude, Tiffany P
• Format: Article
• Language: English
• Subjects: Agricultural economics; Auctions; Bidding; choice experiments; Comparative analysis; consumer behavior; Consumer demand; Consumer surplus; Cultivars; Demand analysis; demand elasticities; Estimates; Estimation; Evaluation; experimental auctions; food prices; Freshwater; Genetically altered foods; Genetically modified foods; Golden rice; Marketing; Oryza sativa; Price elasticity; Rational choice; Rice; Studies; Sumer; Surplus; Transgenic plants; valuation; vitamin A; vitamin deficiencies; Willingness to pay
• ISSN: 0002-9092; 1467-8276
• DOI: 10.1111/j.1467-8276.2009.01267.x

We use two experimental valuation methods to estimate consumer demand for genetically modified golden rice. The first is an open-ended choice experiment (OECE) where participants name the quantities of golden rice and conventional rice demanded at each of several price combinations, one of which will be randomly chosen as binding. This allows us to estimate market demand by aggregating demand across participants. This estimate of market demand also allows us to estimate own-price elasticity and consumer surplus for golden rice. Comparing willingness-to-pay (WTP) estimates from the OECE with those from a uniform-price auction, we find that OECE WTP estimates exhibit less affiliation across rounds, and the effects of positive and negative information under the OECE are more consistent with prior expectations and existing studies. We also find that, while auction WTP estimates more than double across five rounds, OECE WTP estimates are stable across rounds and are always roughly equal to those from the final auction round.