Consequentiality, Elicitation Formats, and the Willingness-To-Pay for Green Electricity: Evidence from Germany

Abstract

Based on hypothetical responses originating from a large-scale survey among about 6,000 German households, this study investigates the discrepancy in willingness-to-pay (WTP) estimates for green electricity across single-binary-choice and open-ended valuation formats. Recognizing that respondents self-select into two groups distinguished by their belief in their answers’ consequences for policy making, we employ a switching regression model that accounts for the potential endogeneity of respondents’ belief in consequences and biases from sample selectivity. Contrasting with the received literature, we find WTP bids that tend to be higher among those respondents who obtained questions in the open-ended format, rather than single-binary-choice questions.