Working Papers, Swedish National Road & Transport Research Institute (VTI)
No 2006:2:
Cognitive Ability and Scale Bias in the Contingent Valuation Method
Henrik Andersson ()
and Mikael Svensson ()
Abstract: This study investigates whether or not the scale bias
found in contingent valuation (CVM) studies on mortality risk reductions is
a result of cognitive constraints among respondents. Scale bias refers to
insensitivity and non near-proportionality of the respondents' willingness
to pay (WTP) to the size of the risk reduction. Two hundred Swedish
students participated in an experiment where their cognitive ability was
tested before they took part in a CVM-study where they were asked about
their WTP to reduce bus-mortality risk. The results imply that WTP answers
from respondents with a higher cognitive ability are less flawed by scale
bias.
Keywords: Cognitive Ability; Contingent Valuation; Mortality Risk; Near-proportionality; Scale Bias; (follow links to similar papers)
JEL-Codes: D80; I10; Q51; (follow links to similar papers)
31 pages, May 15, 2006
This paper has been revised and has been replaced by Working Paper 2007:1.
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- This paper is published as:
-
Andersson, Henrik and Mikael Svensson, (2008), 'Cognitive Ability and Scale Bias in the Contingent Valuation Method', Environmental and Resource Economics, Vol. 39, No. 4, pages 481-495
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