Environmental and Resource Economics

, Volume 65, Issue 4, pp 789–811 | Cite as

Hypothetical Bias in Risk Preferences as a Driver of Hypothetical Bias in Willingness to Pay: Experimental Evidence

  • Jinkwon Lee
  • Uk Hwang


This study provides new insight on the established issue of elicitation bias in hypothetical choice settings. In particular, using an experiment that elicits real and hypothetical willingness to pay for the protection of otters, we provide evidence that the observed bias is driven by those who are both uncertain about their value and exhibit hypothetical bias in risk attitudes. This finding provides a reason why calibration approaches based on follow-up certainty questions have proven useful, but also suggests a degree of caution in applying the approach. Our results favour combining uncertainty calibration with CVM-X in which hypothetical bias in risk attitudes is also taken account to correct for hypothetical bias in WTP.


Contingent valuation method Hypothetical bias Risk attitudes Laboratory experiment CVM-X 



Contingent valuation method


Hypothetical bias in Task i (i = 1,2)


Open-end CVM


Willingness to pay


Hypothetical treatment for Task i (i = 1,2)


Real treatment for Task i (i = 1,2)


Subjects with no hypothetical bias in Task i (i = 1,2)


Subjects with hypothetical bias in Task i (i = 1,2)

JEL Classification

Q51 D81 C91 

Supplementary material

10640_2015_9926_MOESM1_ESM.docx (222 kb)
Supplementary material 1 (docx 221 KB)


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Copyright information

© Springer Science+Business Media Dordrecht 2015

Authors and Affiliations

  1. 1.School of EconomicsSogang UniversitySeoulSouth Korea
  2. 2.School of Economics and TradeKyungpook National UniversityDaeguSouth Korea

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