Prior knowledge, familiarity and stated policy consequentiality in contingent valuation

ABSTRACT

Stated preference surveys are more likely to be demand revealing if the respondent views their responses as consequential i.e. the respondent cares about the policy in question, believes their response will affect the provision of the good and that they will be required to pay the stated amount. In this paper, we contribute to the growing literature on the subject by examining the influence of a respondent’s prior knowledge about the good being valued on stated policy consequentiality. We find that consistent with previous research, willingness to pay varies according to stated consequentiality; and that stated consequentiality itself varies according to a number of observables. Consequentiality and willingness to pay appear to be related on a continuum but this estimate is revised downwards for respondents with a high a priori knowledge of the good. Additionally, we enquire which observed variables influence respondents stated policy consequentiality and share our concerns that a single Likert scale question does not adequately capture a respondent’s belief over consequentiality.

KEYWORDS:

• Stated preferences
• contingent valuation
• consequentiality
• willingness to pay
• benefit–cost analysis

SUBJECT CLASSIFICATION CODES:

• Q51: D83
• H41

Acknowledgements

This study was part of the lead author’s PhD supported by MASTS (Marine Alliance for Science and Technology for Scotland), along with Scottish Natural Heritage and the Scottish Environment Protection Agency.

Disclosure statement

No potential conflict of interest was reported by the authors.

ORCID

Katherine Needham http://orcid.org/0000-0003-2487-2033

Nick Hanley http://orcid.org/0000-0002-1362-3499