Contrasting NOAA guidelines with learning design contingent valuation (LDCV): Preference learning versus coherent arbitrariness

Bateman, Ian J., Burgess, Diane, Hutchinson, W. George and Matthews, David I. (2008) Contrasting NOAA guidelines with learning design contingent valuation (LDCV): Preference learning versus coherent arbitrariness. Journal of Environmental Economics and Management, 55 (2). pp. 127-141.

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Abstract

We extend the contingent valuation (CV) method to test three differing conceptions of individuals’ preferences as either (i) a-priori well-formed or readily divined and revealed through a single dichotomous choice question (as per the NOAA CV guidelines [K. Arrow, R. Solow, P.R. Portney, E.E. Leamer, R. Radner, H. Schuman, Report of the NOAA panel on contingent valuation, Fed. Reg. 58 (1993) 4601–4614]); (ii) learned or ‘discovered’ through a process of repetition and experience [J.A. List, Does market experience eliminate market anomalies? Q. J. Econ. (2003) 41–72; C.R. Plott, Rational individual behaviour in markets and social choice processes: the discovered preference hypothesis, in: K. Arrow, E. Colombatto, M. Perleman, C. Schmidt (Eds.), Rational Foundations of Economic Behaviour, Macmillan, London, St. Martin's, New York, 1996, pp. 225–250]; (iii) internally coherent but strongly influenced by some initial arbitrary anchor [D. Ariely, G. Loewenstein, D. Prelec, ‘Coherent arbitrariness’: stable demand curves without stable preferences, Q. J. Econ. 118(1) (2003) 73–105]. Findings reject both the first and last of these conceptions in favour of a model in which preferences converge towards standard expectations through a process of repetition and learning. In doing so, we show that such a ‘learning design CV’ method overturns the ‘stylised facts’ of bias and anchoring within the double bound dichotomous choice elicitation format.

Item Type: Article
Faculty \ School: Faculty of Science > School of Environmental Sciences
Depositing User: Rachel Snow
Date Deposited: 28 Feb 2011 14:54
Last Modified: 21 Apr 2020 17:56
URI: https://ueaeprints.uea.ac.uk/id/eprint/25324
DOI: 10.1016/j.jeem.2007.08.003

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