The Endowment Effect and WTA: A Quasi-Experimental Test
نویسنده
چکیده
This paperreporrsa test of the endowmenteffect in an economicanalysisof localizedair pollution. Regressiontechniquesare used to test the significanceof perceivedproperty rights on householdWTP for improvedair qualityversus WTA compensationto forgo an improvementin air quality. Ourexperimentcontributesto the researchintothe WTP/WTAdivergenceby providing a new basis for supportingthe existenceof an endowmenteffect, Our results are in contrast to recent work by Shogren et al. which supports the substitutionproposition of Hanemannwhile rejectingthe endowmenteffect.
منابع مشابه
Cognitive Consistency, the Endowment Effect and
We exhibit three non-standard cases of preference reversal (PR) between choices and valuations of bets. The endowment effect arises as a surprising consequence of the WTA/WTP disparity when the probabilities of winning get close to certainty. We consider a new theory of choice under risk, cognitive consistency (CC) theory, which can predict both standard and non-standard cases of PR, the WTA/WT...
متن کاملDivision of the Humanities and Social Sciences California Institute of Technology Pasadena, California 91125 the Willingness to Pay/willingness to Accept Gap, the "endowment Effect," Subject Misconceptions and Experimental Procedures for Eliciting Valuations
We conduct experiments to explore the possibility that subject misconceptions, as opposed to a particular theory of preferences referred to as the “endowment effect,” account for reported gaps between willingness to pay (“WTP”) and willingness to accept (“WTA”). Two facts are evident in the literature. First, there is no consensus regarding the nature or robustness of the WTA-WTP gap. Secondly,...
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The WTP-WTA gap refers to the often observed difference between the price an individual states he is willing to sell an item (WTA), and the price he states he is willing to pay for the same item (WTP). A common explanation for the gap is the so-called endowment effect, first proposed by Thaler (1980). In the literature the endowment effect is explained very simply by appealing to the concept of...
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OBJECTIVES Our main objective was to compare willingness to accept (WTA) and willingness to pay (WTP) in a discrete choice experiment on hearing aid provision. Additionally, income effect and endowment effect were explored as possible explanations for the disparity between WTA and WTP, and the impact of using a WTA and/or WTP format to elicit monetary valuations on the net benefit of the new or...
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