Skip to main content
SpringerLink
Log in

Social desirability and the WTP–WTA disparity in common goods

  • Published:
Environment, Development and Sustainability Aims and scope Submit manuscript

Abstract

This study explores the role of social desirability bias in the willingness to pay (WTP)–willingness to accept (WTA) disparity debate. In the context of a valuation scenario involving air quality in Athens, Greece, we examine whether the well-known WTP–WTA disparity is in place and whether social desirability could be related to this gap by introducing different magnitudes of bias on the two welfare measures. To do so, we contrast the results obtained from the contingent valuation method with those from the inferred valuation method that is believed to mitigate social desirability bias. On the policy side, the study shows that estimates of welfare loss associated with the Greek government’s decision to equalize the tax on diesel fuel and heating oil, which had serious side-effects on air quality, vary greatly with respect to the value measure and method of elicitation.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3

Similar content being viewed by others

Notes

  1. The ‘Laffer Curve’ is the inverted U-shaped relation between tax rate and tax revenue and has been discussed in the literature ever since Wanniski’s (1978) paper.

References

  • Arrow, K., Solow, R., Portney, P. R., Leamer, E. E., Radner, R., & Schuman, H. (1993). Report of the NOAA panel on contingent valuation. Federal Register, 58(10), 4601–4614.

    Google Scholar 

  • Bateman, I., & Great Britain. Department for Transport. (2002). Economic valuation with stated preference techniques: A manual. Cheltenham: Edward Elgar.

    Google Scholar 

  • Börger, T. (2012). Social desirability and environmental valuation. Frankfurt a. M.: Peter Lang International Academic Publishers.

    Google Scholar 

  • Cameron, T. A. (1988). A new paradigm for valuing non-market goods using referendum data: Maximum likelihood estimation by censored logistic regression. Journal of environmental economics and management, 15(3), 355–379.

    Google Scholar 

  • Cameron, T. A., & James, M. D. (1987). Efficient estimation methods for “closed-ended” contingent valuation surveys. The Review of Economics and Statistics, 69(2), 269–276.

    Google Scholar 

  • Carlsson, F., Daruvala, D., & Jaldell, H. (2010). Do you do what you say or do you do what you say others do? Journal of Choice Modelling, 3(2), 113–133.

    Google Scholar 

  • Crowne, D., Marlowe, D., & Bordin, E. S. (1960). A new scale of social desirability independent of psychopathology. Journal of Consulting Psychology, 24(4), 349–354.

    CAS  Google Scholar 

  • Desaigues, B., Ami, D., Bartczak, A., Braun-Kohlova, M., Chilton, S., Czajkowski, M., et al. (2011). Economic valuation of air pollution mortality: A 9-country contingent valuation survey of value of a life year (VOLY). Ecological Indicators, 11(3), 902–910.

    Google Scholar 

  • Drichoutis, A. C., Lusk, J. L., & Pappa, V. (2016). Elicitation formats and the WTA/WTP gap: A study of climate neutral foods. Food Policy, 61, 141–155.

    Google Scholar 

  • Epley, N., & Dunning, D. (2000). Feeling “holier than thou”: Are self-serving assessments produced by errors in self- or social prediction? Journal of Personality and Social Psychology, 79(6), 861–875.

    CAS  Google Scholar 

  • European Environment Agency. (2015). Air quality in Europe. Report, No. 5/2015. Luxembourg: Publications Office of the European Union.

  • Fisher, R. J. (1993). Social desirability bias and the validity of indirect questioning. Journal of Consumer Research, 20(2), 303–315.

    Google Scholar 

  • Florou, K., Papanastasiou, D., Pikridas, M., Kaltsonoudis, C., Louvaris, E., Gkatzelis, E., et al. (2016). The contribution of wood burning and other pollution sources to wintertime organic aerosol levels in two Greek cities. Atmospheric Chemistry and Physics, 17, 3145–3163.

    Google Scholar 

  • Foundation for Economic & Industrial Research—IOBE. (2013). The equalization of the special consumption tax of heating oil to that of motor fuel: An assessment and suggestions for improvement of the economic aid programme of heating oil consumers. (in Greek). http://iobe.gr/docs/research/RES_04_10092013PRE_GR.pdf. Retrieved 29 July 2019.

  • Gallardo, R. K., & Wang, Q. (2013). Willingness to pay for pesticides’ environmental features and social desirability bias: The case of apple and pear growers. Journal of Agricultural and Resource Economics, 38(1), 124–139.

    Google Scholar 

  • Gerasopoulos, E., Liakakou, E., Psiloglou, V., Stavroulas, J., Fourtziou, L., Roukounakis, N., et al. (2014). “Smog events over Athens during winter 2013–2014: Pollution measurements and chemical characterization”, EGU2014. Vienna: Austria.

    Google Scholar 

  • Hammitt, J. K., & Zhou, Y. (2006). The economic value of air-pollution-related health risks in China: A contingent valuation study. Environmental & Resource Economics, 33(3), 399–423.

    Google Scholar 

  • Hanemann, M., & Kanninen, B. (2001). The statistical analysis of discrete-response CV data. In Valuing environmental preferences: Theory and practice of the contingent valuation method in the US, EU, and developing countries, p. 302.

  • Hanemann, W. (1991). Willingness to pay and willingness to accept: How much can they differ? The American Economic Review, 81(3), 635–647.

    Google Scholar 

  • Hanemann, W. (1994). Valuing the environment through contingent valuation. Journal of Economic Perspectives, 8(4), 19–43.

    Google Scholar 

  • Hanemann, W. M. (1984). Welfare evaluations in contingent valuation experiments with discrete responses. American Journal of Agricultural Economics, 66(3), 332–341.

    Google Scholar 

  • Hausman, J. (2012). Contingent valuation: From dubious to hopeless. Journal of Economic Perspectives, 26(4), 43–56.

    Google Scholar 

  • Hellenic Statistical Authority—ELSTAT. (2014). Population—Housing census revision of 2011. Release date: 12.9.2014.

  • Hellenic Statistical Authority—ELSTAT. (2018). Household budget survey 2017. Release date: 4.10.2018.

  • Horowitz, J. K., & McConnell, K. E. (2002). A review of WTA/WTP studies. Journal of Environmental Economics and Management, 44(3), 426–447.

    Google Scholar 

  • Istamto, H., & Lebret, (2014). Willingness to pay to avoid health risks from road-traffic-related air pollution and noise across five countries. Science of the Total Environment, 497–498, 420–429.

    Google Scholar 

  • Johansson-Stenman, O., & Martinsson, P. (2006). Honestly, why are you driving a BMW? Journal of Economic Behavior & Organization, 60(2), 129–146.

    Google Scholar 

  • Johnston, R. J., Boyle, K. J., Adamowicz, W., Bennett, J., Brouwer, R., Cameron, T. A., et al. (2017). Contemporary guidance for stated preference studies. Journal of the Association of Environmental and Resource Economists, 4(2), 319–405.

    Google Scholar 

  • Kahneman, D., Knetsch, J., & Thaler, R. (1990). Experimental tests of the endowment effect and the coase theorem. Journal of Political Economy, 98(6), 1325–1348.

    Google Scholar 

  • Kalli, K. F., Pikridas, M., & Pandis, S. N. (2013). Wintertime air pollution and the Greek financial crisis. Vienna: EGU.

    Google Scholar 

  • Kurt, D., & Inman, J. J. (2013). Mispredicting others’ valuations: Self-other difference in the context of endowment. Journal of Consumer Research, 40(1), 78–89.

    Google Scholar 

  • Leggett, C. G., Kleckner, N. S., Boyle, K. J., Dufield, J. W., & Mitchell, R. C. (2003). Social desirability bias in contingent valuation surveys administered through in-person interviews. Land Economics, 79(4), 561–575.

    Google Scholar 

  • Lusk, J., & Norwood, B. F. (2009a). Bridging the gap between laboratory experiments and naturally occurring markets: An inferred valuation method. Journal of Environmental Economic and Management, 58(2), 236–250.

    Google Scholar 

  • Lusk, J. L., & Norwood, B. F. (2009b). An inferred valuation method. Land Economics, 85(3), 500–514.

    Google Scholar 

  • Masclet, D., Noussair, C., Tucker, S., & Villeval, M. C. (2003). Monetary and nonmonetary punishment in the voluntary contributions mechanism. American Economic Review, 93(1), 366–380.

    Google Scholar 

  • Mitchell, R., & Carson, R. T. (1989). Using surveys to value public goods: The contingent valuation method. Washington, D.C.: Resources for the Future.

    Google Scholar 

  • OECD. (2017). Government at a Glance 2017. Paris: OECD Publishing. https://doi.org/10.1787/gov_glance-2017-en. Retrieved 29 July 2019.

  • Olynk, N. J., Tonsor, G. T., & Wolf, C. A. (2010). Consumer willingness to pay for livestock credence attribute claim verification. Journal of Agricultural and Resource Economics, 35(2), 261–280.

    Google Scholar 

  • Paulhus, D. L (1991). Measurement and control of response bias. Measures of personality and social psychological attitudes (pp. 17–59). San Diego: Academic Press, xiv, 753 pp.

  • Plott, C., & Zeiler, K. (2007). Exchange asymmetries incorrectly interpreted as evidence of endowment effect theory and prospect theory? The American Economic Review, 97(4), 1449–1466.

    Google Scholar 

  • Portney, P. (1994). The contingent valuation debate: Why economists should care. Journal of Economic Perspectives, 8(4), 3–17.

    Google Scholar 

  • Randall, A., & Stoll, J. (1980). Consumer’s surplus in commodity space. The American Economic Review, 70(3), 449–455.

    Google Scholar 

  • Ryan, A. M., & Spash, C. L. (2010). Measuring beliefs supportive of environmental action and inaction: A reinterpretation of the awareness of consequences scale.

  • Saffari, A., Daher, N., Samara, C., Voutsa, D., Kouras, A., Manoli, E., et al. (2013). Increased biomass burning due to the economic crisis in Greece and its adverse impact on wintertime air quality in Thessaloniki. Environmental Science and Technology, 47(23), 13313–13320.

    CAS  Google Scholar 

  • Sayman, S., & Öncüler, A. (2005). Effects of study design characteristics on the WTA–WTP disparity: A meta analytical framework. Journal of Economic Psychology, 26(2), 289–312.

    Google Scholar 

  • Stachtiaris, S., Drichoutis, A., & Klonaris, S. (2013). Preference reversals in contingent and inferred valuation methods. European Review of Agricultural Economics, 40(2), 379–404.

    Google Scholar 

  • Stober, J. (2001). The social desirability scale-17 (sds-17): Convergent validity, discriminant validity, and relationship with age. European Journal of Psychological Assessment, 17(3), 222–232.

    Google Scholar 

  • Thaler, R. (1980). Toward a positive theory of consumer choice. Journal of Economic Behavior & Organization, 1(1), 39–60.

    Google Scholar 

  • Tunçel, T., & Hammitt, J. K. (2014). A new meta-analysis on the WTP/WTA disparity. Journal of Environmental Economics and Management, 68(1), 175–187.

    Google Scholar 

  • Tversky, A., & Kahneman, D. (1991). Loss aversion in riskless choice: A reference-dependent model., 106(4), 1039–1061.

    Google Scholar 

  • Vlachokostas, C., Achillas, C., Slini, T., Moussiopoulos, N., Banias, G., & Dimitrakis, I. (2011). Willingness to pay for reducing the risk of premature mortality attributed to air pollution: A contingent valuation study for Greece. Atmospheric Pollution Research, 2(3), 275–282.

    Google Scholar 

  • Wang, H., & Mullahy, J. (2006). Willingness to pay for reducing fatal risk by improving air quality: A contingent valuation study in Chongqing, China. Science of the Total Environment, 367(1), 50–57.

    CAS  Google Scholar 

  • Wang, K., Wu, J., Wang, R., Yang, Y., Chen, R., Maddock, J. E., et al. (2015). Analysis of residents’ willingness to pay to reduce air pollution to improve children’s health in community and hospital settings in Shanghai, China. Science of the Total Environment, 533, 283–289.

    CAS  Google Scholar 

  • Wang, Y., & Zhang, Y. (2009). Air quality assessment by contingent valuation in Ji’nan, China. Journal of Environmental Management, 90(2), 1022–1029.

    CAS  Google Scholar 

  • Wanniski, J. (1978). Taxes, revenues, and the Laffer curve. The Public Interest, 50, 3.

    Google Scholar 

  • Zhao, J., & Kling, C. (2000). Willingness-to-pay, compensating variation, and the cost of commitment. In CARD Working Paper Series. Iowa State University, Center for Agricultural and Rural Development.

Download references

Author information

Authors and Affiliations

  1. Department of Economics, University of Ioannina, Ioannina, Greece

    Achilleas Vassilopoulos

  2. ICRE8: International Centre for Research on the Environment and the Economy, Athens, Greece

    Achilleas Vassilopoulos

  3. Imperial College of London, South Kensington, London, SW7 1NA, UK

    Niki Avgeraki

  4. Department of Agricultural Economics and Rural Development, Agricultural University of Athens, Athens, Greece

    Stathis Klonaris

Authors
  1. Achilleas Vassilopoulos
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Niki Avgeraki
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Stathis Klonaris
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Achilleas Vassilopoulos.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Vassilopoulos, A., Avgeraki, N. & Klonaris, S. Social desirability and the WTP–WTA disparity in common goods. Environ Dev Sustain 22, 6425–6444 (2020). https://doi.org/10.1007/s10668-019-00490-6

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10668-019-00490-6

Keywords

Search

Navigation