Effect of Question Format on WTP in CV Studies

Abstract

As it is well known, there are different ways to ask willingness to pay (WTP) questions in contingent valuation (CV) surveys, which are known as elicitation methods. Presently four types o f elicitation methods are commonly used in CVM studies e.g., open-ended (OE), bidding game (BG), single-bound dichotomous-choice (1DC) and double-bound dichotomous-choice (2DC). Among them especially dichotomous-choice (DC) format is the most widely used one. Follow-up questions are also used to increase the precision o f the estimate with DC question. The NOAA blue ribbon panel advocated this method as the most appropriate one in most circumstances (Arrow et al. 1993). While among others bidding game (BG) approach has been almost deserted because it tends to result in a starting point bias. However, all these methods o f asking questions have their relative advantages and disadvantages and none is free from criticisms. In this context, this study is a modest attempt to study the impact o f different elicitation methods onwillingness to pay o f the same respondents by using the CVM study data o f two environmental assessment case studies.