Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/244444 
Authors: 
Year of Publication: 
2009
Series/Report no.: 
Working Paper No. 1/2009
Publisher: 
Örebro University School of Business, Örebro
Abstract: 
Hypothetical bias is a serious problem of stated preference techniques. The certainty approach calibrates answers by assessing different weights to remedy respondents' valuation. However, very little research has been done to find a link between economic theory and empirical treatment of uncertainty through certainty calibration. We use a combination of dichotomous choice (DC) followed by an open-ended (OE) question to examine the relation between the degree of confidence and the distance between the DC bid and the OE answer. The results show that the OE bid difference is significantly correlated to the certainty level in one of our two contingent valuation (CV) surveys, with the probability of stating the highest confidence value increasing between 5-19 percent per SEK 1000 (~$170/€106) that the answer to the OE question and the bid differ. The second CV survey shows a significant relation for the no-responders.
Subjects: 
Contingent valuation
Hypothetical bias
Calibration
Certainty approach
Value of a statistical life
Traffic safety
Cardiac arrest
JEL: 
H43
I18
R41
Document Type: 
Working Paper

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