PT  - JOURNAL ARTICLE
AU  - Liu, Pengfei
AU  - Swallow, Stephen K.
TI  - Incentive Compatibility and the Consequences when it is Missing: Experiments with Water Quality Credits Purchase
AID  - 10.3368/le.97.4.050920-0064R1
DP  - 2021 Oct 08
TA  - Land Economics
PG  - 050920-0064R1
4099  - http://le.uwpress.org/content/early/2021/09/28/le.97.4.050920-0064R1.short
4100  - http://le.uwpress.org/content/early/2021/09/28/le.97.4.050920-0064R1.full
AB  - This paper implemented four treatments to elicit preferences for a non-market good, including (1) a hypothetical referendum, (2) a real referendum lacking incentive compatibility, (3) a real choice with incentive compatibility, and (4) a hybrid approach based on (2) and (3). We develop a method to estimate the probability that observed choices do not identify the highest-utility alternative in a choice question. We find that in the hypothetical referendum, the estimated percentage of individuals choosing the alternative that gives the highest utility is the lowest among the treatments. Adding policy consequentiality or payment consequentiality increases the percentage of truthful responses.