An examination of the disparity between hypothetical and actual willingness to pay using the contingent valuation method: the case of red kite conservation in the United Kingdom

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Abstract

This paper reports the findings of a field experiment that explores the criterion validity of the contingent valuation (CV) method. The empirical experiment examined the disparity between hypothetical and actual willingness to pay (WTP) bids for Red Kite conservation in Wales. Hypothetical WTP was elicited using an open-ended CV instrument, while the actual WTP value was determined from actual donations to the Welsh Kite Trust—a charity set up to aid the conservation of Red Kites in Wales. The survey results indicate that hypothetical WTP was three times greater than the mean value of actual donations; this finding is consistent with a number of other criterion validity experiments. However, we also demonstrate equality of hypothetical and actual WTP among those who actually express a payment amount. Further investigations identify that an underlying cause of this disparity stems from the respondents of the CV survey overstating their intention of pay. This observation has potentially significant implication for CV design in that it suggests that the emphasis in design should be placed much more fully on initially determining whether people would actually pay at all.
Original languageEnglish
Pages (from-to)159-169
Number of pages11
JournalCanadian Journal of Agricultural Economics
Volume55
Issue number2
Early online date07 May 2007
DOIs
Publication statusPublished - 01 Jun 2007

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