RT Journal Article
SR Electronic
T1 Incentive Incompatibility and Starting-Point Bias in Iterative Valuation Questions
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 285
OP 297
DO 10.2307/3147274
VO 78
IS 2
A1 John C. Whitehead
YR 2002
UL http://le.uwpress.org/content/78/2/285.abstract
AB We test for incentive incompatibility and starting-point bias to describe the effects of iterative valuation questions on willingness to pay. We compare double-, triple-, and multiple-bounded models with data from two surveys with similar designs of the valuation questions. We find that incentive incompatibility is present in both sets of data and starting-point bias is present in one. The efficiency of the willingness-to-pay estimate is improved in only one set of data. The potential loss from using iterative questions without controlling for both incentive incompatibility and starting-point bias is biased willingness-to-pay estimates. (JEL Q26)