Scandinavian Working Papers in Economics
Working Papers in Economics,
University of Gothenburg, Department of Economics
No 484: Self-Image and Valuation of Moral Goods: Stated versus Real Willingness to Pay
Olof Johansson-Stenman () and Henrik Svedsäter ()
Additional contact information
Olof Johansson-Stenman: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG
Henrik Svedsäter: Organisational Behaviour, London Business School, United Kingdom
Abstract: Hypothetical bias in stated-preference methods appears sometimes to be very large, and other times non-existent. This is here largely explained by a model where people derive utility from a positive self-image associated with morally commendable behavior. The results of a choice experiment are consistent with the predictions of this model; the hypothetical marginal willingness to pay (MWTP) for a moral good (contributions to a WWF project) is significantly higher than the corresponding real MWTP, whereas no hypothetical bias is present for an amoral good (a restaurant voucher). Moreover, both the theoretical model and the experimental evidence suggest that also the real MWTP for the moral good is biased upwards by being higher within than outside the experimental context.
Keywords: Stated-preference methods; choice experiment; hypothetical bias; self-image; non-market valuation; warm glow
39 pages, January 13, 2011
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