Learning design contingent valuation (LDCV): NOAA guidelines, preference learning and coherent arbitrariness

I.J. Bateman, D. Burgess, George Hutchinson, D.I. Matthews

Research output: Contribution to journalArticlepeer-review

134 Citations (Scopus)

Abstract

We extend the contingent valuation (CV) method to test three differing conceptions of individuals' preferences as either (i) a-priori well-formed or readily divined and revealed through a single dichotomous choice question (as per the NOAA CV guidelines [K. Arrow, R. Solow, P.R. Portney, E.E. Learner, R. Radner, H. Schuman, Report of the NOAA panel on contingent valuation, Fed. Reg. 58 (1993) 4601-4614]); (ii) learned or 'discovered' through a process of repetition and experience [J.A. List, Does market experience eliminate market anomalies? Q. J. Econ. (2003) 41-72; C.R. Plott, Rational individual behaviour in markets and social choice processes: the discovered preference hypothesis, in: K. Arrow, E. Colombatto, M. Perleman, C. Schmidt (Eds.), Rational Foundations of Economic Behaviour, Macmillan, London, St. Martin's, New York, 1996, pp. 225-250]; (iii) internally coherent but strongly influenced by some initial arbitrary anchor [D. Ariely, G. Loewenstein, D. Prelec, 'Coherent arbitrariness': stable demand curves without stable preferences, Q. J. Econ. 118(l) (2003) 73-105]. Findings reject both the first and last of these conceptions in favour of a model in which preferences converge towards standard expectations through a process of repetition and learning. In doing so, we show that such a 'learning design CV method overturns the 'stylised facts' of bias and anchoring within the double bound dichotomous choice elicitation format. (C) 2007 Elsevier Inc. All rights reserved.
Original languageEnglish
Pages (from-to)127-141
Number of pages15
JournalJournal of Environmental Economics and Management
Volume55
Issue number2
DOIs
Publication statusPublished - Nov 2008

Bibliographical note

Commissioning Body / Publisher: Journal of Environmental Economics and Management
Pagination / Size: 36

ASJC Scopus subject areas

  • Economics and Econometrics
  • Management, Monitoring, Policy and Law

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