RT Journal Article
SR Electronic
T1 Are Stated Preferences Good Predictors of Market Behavior?
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 44
OP 45
DO 10.2307/3147104
VO 79
IS 1
A1 Loureiro, Maria L.
A1 McCluskey, Jill J.
A1 Mittelhammer, Ron C.
YR 2003
UL http://le.uwpress.org/content/79/1/44.abstract
AB Using an economic experiment in conjunction with a survey, we analyze whether consumers’ hypothetical willingness-to-pay responses are effective predictors of actual market behavior. We model revealed preferences as a function of socio-demographic characteristics and instrumental variables that represent the intensity of stated preferences. Our findings show that consumers who state that they are willing to pay a premium, which is equal to or greater than a positive lower bound, have a higher likelihood of actually buying the product in question. This implies that consumers’ actions in the economic experiment validate their survey responses. (JEL Q13, Q26)