Working Papers, Swedish National Road & Transport Research Institute (VTI)
No 2008:7:
Hypothetical bias and certainty calibration in a value of time experiment
Jan-Erik Swärdh ()
Abstract: This study is the first to analyze hypothetical bias in a
willingness to pay for time context as well as the first to test certainty
calibration of the value of time. Hypothetical and real actions are
compared in an experimental setting where the subjects are given an offer
to leave the experiment in advance by paying a given amount of cash. The
results show a weak tendency of positive hypothetical bias in the
willingness to pay for value of time, though this effect is not different
from zero at conventional significance levels. However, certainty
calibration, by using the information from a follow-up question where the
subjects are self-stating their preference certainty of their hypothetical
choice, provides evidence of a significant positive hypothetical bias for
non-certain subjects whereas this bias is eliminated for certain
subjects.
Keywords: Value of time; Hypothetical bias; Certainty calibration; Preference certainty; (follow links to similar papers)
JEL-Codes: C20; C91; D80; (follow links to similar papers)
27 pages, July 2, 2008
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