Testing for Inconsistencies in Double Bounded Dichotomous Choice Contingent Valuation Studies

A number of issues have been raised in the contingent valuation (CV) literature regarding the ‘validity’ of CV welfare estimates. This study addressed a number of these concerns within a study looking at the value of an air ambulance service in England. The double bounded dichotomous choice (DBDC) CV approach was used, and data was collected from 800 individuals across England, using a computer assisted telephone interview. Consideration was first given to whether preferences were a function of the sequence of questions. There was evidence of this. We then consider a number of possible causes for such inconsistencies, including framing, cost-based responses, strategic behaviour, yea-saying, and anchoring. These were investigated by considering the effect of path dependency on the responses to the DBDC bids, where responses to ‘ascending’ (positive responses) and ‘descending’ (negative responses) sequences for a number of starting points are compared. Suggestive evidence of cost-based responses, strategic behaviour and yea-saying is provided. Areas for future research are identified.