Economic Preferences or Attitude Expressions?: An Analysis of Dollar Responses to Public Issues

Daniel Kahneman; Ilana Ritov; David Schkade

doi:10.1023/A:1007835629236

Journal of Risk and Uncertainty

December 1999, Volume 19, Issue 1–3, pp 203–235

Economic Preferences or Attitude Expressions?: An Analysis of Dollar Responses to Public Issues

Authors
Authors and affiliations

Daniel Kahneman
Ilana Ritov
David Schkade

Article

200 Citations
1 Shares
500 Downloads

Abstract

Participants in contingent valuation surveys and jurors setting punitive damages in civil trials provide answers denominated in dollars. These answers are better understood as expressions of attitudes than as indications of economic preferences. Well-established characteristics of attitudes and of the core process of affective valuation explain several robust features of dollar responses: high correlations with other measures of attractiveness or aversiveness, insensitivity to scope, preference reversals, and the high variability of dollar responses relative to other measures of the same attitude.

preferences attitudes contingent valuation psychology and economics utility assessment

Preview

Unable to display preview. Download preview PDF.

References

Anderson, Norman. (1996). A Functional Theory of Cognition. Mahwah, NJ: Erlbaum.Google Scholar
Arrow, Kenneth. (1982). “Risk Perception in Psychology and Economics,” Economic Inquiry 20, 1–9.Google Scholar
Baron, Jonathan and Joshua Greene. (1996). “Determinants of Insensitivity to Quantity in Valuation of Public Goods: Contribution, Warm Glow, Budget Constraints, Availability, and Prominence,” Journal of Experimental Psychology: Applied 2, 107–125.Google Scholar
Barsalou, Lawrence. (1992). Cognitive Psychology: An Overview for Cognitive Scientists. NJ: Erlbaum.Google Scholar
Bartels, Larry M. (1998). “Democracy With Attitudes,” Paper presented at the annual meeting of American Political Science Association, Boston.Google Scholar
Carson, Richard, Michael Hanemann, Raymond Kopp, John Krosnick, Robert Mitchell, Stanley Presser, Paul Ruud, and V. Kerry Smith. (1994). Prospective Interim Lost Use Value Due to DDT and PCB Contamination in the Southern California Bight. La Jolla, CA: Natural Resource Damage Assessment.Google Scholar
Carson, Richard and Robert Mitchell. (1993). “The Issue of Scope in Contingent Valuation Studies,” American Journal of Agricultural Economics 75, 1263–1267.Google Scholar
Carson, Richard and Robert Mitchell. (1995). “Sequencing and Nesting in Contingent Valuation Surveys,” Journal of Environmental Economics and Management 28, 155–173.Google Scholar
Chapman, Gretchen, and Brian Bornstein. (1996). “The More You Ask for the More You Get: Anchoring in Personal Injury Verdicts,” Applied Cognitive Psychology 10, 519–540.Google Scholar
Cummings, Ronald, Glenn Harrison, and Elizabeth Rutstrom. (1995). “Homegrown Values and Hypothetical Surveys: Is the Dichotomous Choice Approach Incentive-Compatible?” American Economic Review 85, 260–266.Google Scholar
DeKay, Michael and Gary McClelland. (1996). “Probability and Utility Components of Endangered Species Preservation Programs,” Journal of Experimental Psychology: Applied 2, 60–83.Google Scholar
Desvousges, William, F. Reed Johnson, Richard Dunford, Kevin Boyle, Sarah Hudson, and K. Nicole Wilson. (1992). Measuring Non-Use Damages Using Contingent Valuation: An Experimental Evaluation of Accuracy. Research Triangle Institute Monograph 92–1.Google Scholar
Diamond, Peter. (1996). “Testing the Internal Consistency of Contingent Valuation Surveys.” Journal of Environmental Economics and Management 30, 337–347.Google Scholar
Diamond, Peter, John Hausman, Gregory Leonard, and Michael Denning. (1993). “Does Contingent Valuation Measure Preferences? Experimental Evidence.” In J. A. Hausman ed., Contingent Valuation: A Critical Assessment. Amsterdam: North-Holland.Google Scholar
Diamond, Peter and John Hausman. (1994). “Contingent Valuation: Is Some Number Better Than No Number?” Journal of Economic Perspectives 8, 45–64.Google Scholar
Eagly, Alice and Shelley Chaiken. (1993). The Psychology of Attitudes. Fort Worth, TX: Harcourt Brace.Google Scholar
Eagly, Alice and Shelley Chaiken. (1996). “Attitude Structure and Function.” In Gilbert, D., S. Fiske, and G. Lindzey eds., The Handbook of Social Psychology, 4th ed. New York: McGraw-Hill.Google Scholar
Fazio, Russell, David Sanbonmatsu, Martha Powell, and Frank Kardes. (1986). “On the Automatic Activation of Attitudes.” Journal of Personality and Social Psychology 50, 229–238.Google Scholar
Fischhoff, Baruch. (1991). “Value Elicitation: Is There Anything in There?” American Psychologist 46, 835–847.Google Scholar
Foster, Vivien, Ian J. Bateman, and David Harley. (1997). “Real and Hypothetical Willingness to Pay for Environmental Preservation: A Non-Experimental Comparison,” Journal of Agricultural Economics 48, 123–138.Google Scholar
Frederick, Shane and Baruch Fischhoff. (1998). “Scope In Sensitivity in Elicited Valuations,” Risk Decision and Policy 3, 109–123.Google Scholar
Green, Donald, Karen Jacowitz, Daniel Kahneman, and Daniel McFadden. (1998). “Referendum Contingent Valuation, Anchoring, and Willingness to Pay for Public Goods.” Resource and Energy Economics 20, 85–116.Google Scholar
Griffin, Dale and Amos Tversky. (1992). “The Weighing of Evidence and the Determinants of Confidence,” Cognitive Psychology 24, 411–435.Google Scholar
Hanemann, Michael. (1994). “Valuing the Environment Through Contingent Valuation,” Journal of Economic Perspectives 8, 19–43.Google Scholar
Hastie, Reid, David Schkade, and John Payne. (1999). “Juror Judgments in Civil Cases: Effects of Plaintiff's Request and Plaintiff's Identity on Punitive Damage Awards.” Law and Human Behavior 23, 445–470.Google Scholar
Hoehn, John and Alan Randall. (1987). “Too Many Proposals Pass the Benefit Cost Test,” American Economic Review 79, 544–551.Google Scholar
Hsee, Chris. (1996). “The Evaluability Principle: An Explanation for Preference Reversals between Joint and Separate Evaluations of Alternatives,” Organizational Behavior and Human Decision Processes 67, 247–257.Google Scholar
Jacowitz, Karen and Daniel Kahneman. (1995). “Measures of Anchoring in Estimation Tasks,” Personality and Social Psychology Bulletin 21, 1161–1166.Google Scholar
Jones-Lee, Michael, Graham Loomes, and P. Philips. (1995). “Valuing the Prevention of Non-Fatal Road Injuries: Contingent Valuation vs. Standard Gambles,” Oxford Economic Papers 47, 676–695.Google Scholar
Kahneman, Daniel. (1986). “Valuing Environmental Goods: An Assessment of the Contingent Valua-tion Method.” In R. Cummings, D. Brookshire, and W. Schulze eds. Valuing Environmental Goods: An Assessment of the Contingent Valuation Method. Totowa, NJ.Google Scholar
Kahneman, Daniel. (1995). “Extension Neglect and Violations of Monotonicity in Judgment and Preference: Three Examples,” Bartlett Lecture to the Experimental Psychology Society UK.Google Scholar
Kahneman, Daniel, Barbara Fredrickson, Charles Schreiber, and Don Redelmeier. (1993). “When More Pain Is Preferred to Less,” Psychological Science 4, 401–405.Google Scholar
Kahneman, Daniel and Jack Knetsch. (1992). “Valuing Public Goods: The Purchase of Moral Satisfaction,” Journal of Environmental Economics and Management 22, 57–70.Google Scholar
Kahneman, Daniel, Jack Knetsch, and Richard Thaler. (1991). “The Endowment Effect, Loss Aversion, and Status Quo Bias,” Journal of Economic Perspectives, 5, 193–206.Google Scholar
Kahneman, Daniel and Dale Miller. (1986). “Norm Theory: Comparing Reality to Its Alternatives,” Psychological Review 93, 136–153.Google Scholar
Kahneman, Daniel and Ilana Ritov. (1994). “Determinants of Stated Willingness to Pay for Public Goods: A Study in the Headline Method,” Journal of Risk and Uncertainty 9, 5–38.Google Scholar
Kahneman, Daniel, David Schkade, Elana Ritov and Cass Sunstein. (1999). “Reversals of judgement; The effect of cross-category comparisons intendedly absolute scales,” manuscript order review.Google Scholar
Kahneman, Daniel, David Schkade, and Cass Sunstein. (1998). “Shared Outrage and Erratic Awards: The Psychology of Punitive Damages,” Journal of Risk and Uncertainty 16, 49–86.Google Scholar
Kahneman, Daniel and Amos Tversky. (1972). “Subjective Probability: A Judgment of Representativeness.” Cognitive Psychology 3, 430–454.Google Scholar
Kahneman, Daniel and Amos Tversky. (1973). “On the Psychology of Prediction.” Psychological Review 80, 237–254.Google Scholar
Kahneman, Daniel and Amos Tversky. (1979). “Prospect Theory: An Analysis of Decision under Risk,” Econometrica 47, 263–291.Google Scholar
Kahneman, Daniel, Peter Wakker, and Rakesh Sarin. (1997). “Back to Bentham? Explorations of Experienced Utility,” Quarterly Journal of Economics 112, 375–405.Google Scholar
Kemp, Michael and Christopher Maxwell. (1993). “Exploring a Budget Context for Contingent Valua-tion.” In Hausman ed., Contingent Valuation: A Critical Assessment. Amsterdam: North-Holland.Google Scholar
Koehler, Jonathan. (1996). “The Base-Rate Fallacy Reconsidered: Descriptive, Normative, and Methodological Challenges.” Behavioral and Brain Sciences 19, 1–53.Google Scholar
Levav, Jonathan. (1996). “Questioning Contingent Valuation: Maximality and Violations of Monotonicity in Willingness-to-Pay for Public Goods,” Unpublished undergraduate thesis, Princeton University.Google Scholar
Lodge, Milton. (1981). “Magnitude Scaling: Quantitative Measurement of Opinions.” InJ. Sullivan ed., Quantitative Applications in the Social Sciences, Vol. 25. Beverly Hills, CA: Sage Publications.Google Scholar
Loomis, John, Armando Gonzalez-Caban, and Robin Gregory. (1994). “Do Reminders of Substitutes and Budget Constraints Influence Contingent Valuation Estimates?” Land Economics 70, 499–506.Google Scholar
McFadden, Daniel. (1994). “Contingent Valuation and Social Choice,” American Journal of Agricultural Economics 76, 689–708.Google Scholar
McFadden, Daniel. (1999). “Rationality for Economists,” Journal of Risk and Uncertainty 19, 73–106.Google Scholar
McFadden, Daniel and Gregory Leonard. (1993). “Issues in the Contingent Valuation of Environmental Goods: Methodologies for Data Collection and Analysis.” In Hausman ed., Contingent Valuation: A Critical Assessment. Amsterdam: North-Holland.Google Scholar
Mitchell, Robert and Richard Carson. (1989). Using Surveys to Value Public Goods. Washington, DC: Resources for the Future.Google Scholar
Neill, Helen. (1995). “The Context for Substitutes in CVM Studies: Some Empirical Observations,” Journal of Environmental Economics and Management 29, 393–397.Google Scholar
Nickerson, Carol. (1995). “Does Willingness-to-Pay Reflect the Purchase of Moral Satisfaction? A Reconsideration of Kahneman and Knetsch,” Journal of Environmental Economics and Management 28, 126–133.Google Scholar
NOAA panel report. U.S. Department of Commerce, National Oceanic and Atmospheric Administra-tion. (1993). “Natural Resource Damage Assessments under the Oil Pollution Act of 1990,” Federal Register 58, 4601–4614.Google Scholar
Novemsky, Nathan and Shirit Kronzon. (1999). “How Are Base-Rates Used, When They Are Used: A Comparison of Bayesian and Additive Models of Base-Rate Use,” Journal of Behavioral Decision Making 12, 55–69.Google Scholar
Osgood, Charles, George Suci, and Percy Tannenbaum. (1957). The Measurement of Meaning. Urbana: University of Illinois Press.Google Scholar
Payne, John, James Bettman, and Eric Johnson. (1992). “Behavioral Decision Research: A Constructive Processing Perspective.” Annual Review of Psychology 43, 87–131.Google Scholar
Payne, John W., James R. Bettman, and David A. Schkade. (1999). “Measuring Constructed Preferences: Towards a Building Code.” Journal of Risk and Uncertainty 19, 243–270.Google Scholar
Payne, John, David Schkade, William Desvousges, and Chris Aultman. (1999). “Valuation of Multiple Environmental Programs: A Psychological Analysis,” Unpublished manuscript, Duke University.Google Scholar
Pratto, F. (1994). “Consciousness and Automatic Evaluation.” In Paula M. Niedenthal and Shinobu Kitayama Eds., The Heart's Eye: Emotional Influences in Perception and Attention. Academic Press, Inc, San Diego, CA.Google Scholar
Quattrone, George and Amos Tversky. (1984). “Causal Versus Diagnostic Contingencies: On Self-Deception and the Voter's Illusion,” Journal of Personality and Social Psychology 46, 237–248.Google Scholar
Randall, Alan and John Hoehn. (1996). “Embedding in Market Demand Systems,” Journal of Environmental Economics and Management 30, 369–380.Google Scholar
Ritov, Ilana, Jonathan Baron, and John Hershey. (1993). “Framing Effects in the Evaluation of Multiple Risk Reduction,” Journal of Risk and Uncertainty 6, 145–159.Google Scholar
Ritov, Ilana. (1996). “Anchoring in a Simulated Competitive Market Negotiation,” Organizational Behavior and Human Decision Processes 67, 16–25.Google Scholar
Rosch, Eleanor and Barbara Lloyd. (1978). Cognition and Categorization. Hillsdale, NJ: Erlbaum.Google Scholar
Rottenstreich, Yuval and Amos Tversky. (1997). “Unpacking, Repacking, and Anchoring: Advances in Support Theory,” Psychological Review, 104, 406–415.Google Scholar
Rutherford, Murray, Jack Knetsch, and Thomas Brown. (1998). “Assessing Environmental Losses: Judgments of Importance and Damage Schedules,” Harvard Environmental Law Review, 22, 51–101.Google Scholar
Schreiber, Charles and Daniel Kahneman. (2000). “Beyond the Peak and End Hypothesis: Exploring the Relation between Real-Time Pleasure and Retrospective Evaluations,” Journal of Experimental Psychology.Google Scholar
Seip, Kalle and Jon Strand. (1992). “Willingness to Pay for Environmental Goods in Norway: A Contingent Valuation Study with Real Payment,” Environmental and Resource Economics 2, 91–106.Google Scholar
Slovic, Paul. (1995). “The Construction of Preference,” American Psychologist, 50, 364–371.Google Scholar
Smith, V. Kerry. (1992). “Arbitrary Values, Good Causes, and Premature Verdicts,” Journal of Environmental Economics and Management 22, 71–89.Google Scholar
Strack, Fritz and Thomas Mussweiler. (1997). “Explaining the Enigmatic Anchoring Effect: Mechanisms of Selective Accessibility,” Journal of Personality and Social Psychology 73, 437–446.Google Scholar
Stevens, Stanley S. (1975). Psychophysics. Introduction to Its Perceptual, Neural, and Social Prospects. Wiley: NY.Google Scholar
Sunstein, Cass, Daniel Kahneman, and David Schkade. (1998). “Assessing Punitive Damages,” Yale Law Journal 107, 2071–2153.Google Scholar
Tesser, Abraham and Leonard Martin. (1996). “The Psychology of Evaluation.” In E. T. Higgins, and A. Kruglanski eds., Social Psychology: Handbook of Basic Principles, pp. 400–432. New York: Guilford Press.Google Scholar
Thaler, Richard. (1992). The Winner's Curse: Paradoxes and Anomalies of Economic Life. New York: The Free Press.Google Scholar
Tversky, Amos and Daniel Kahneman. (1971). “Belief in the Law of Small Numbers,” Psychological Bulletin 76, 105–110.Google Scholar
Tversky, Amos and Daniel Kahneman. (1982). “Evidential Impact of Base Rates.” In D. Kahneman, P. Slovic, and A. Tversky eds., Judgment under Uncertainty: Heuristics and Biases. New York: Cambridge University Press.Google Scholar
Tversky, Amos and Daniel Kahneman. (1983). “Extensional vs. Intuitive Reasoning: The Conjunction Fallacy in Probability Judgment,” Psychological Review 90, 293–3l5.Google Scholar
Tversky, Amos and Daniel Kahneman. (1986). “Rational Choice and the Framing of Decisions,” Journal of Business 59, 251–278.Google Scholar
Tversky, Amos and Richard Thaler. (1992). “Preference Reversals.” In R. H. Thaler ed., The Winner's Curse: Paradoxes of Economic Life. New York: The Free Press.Google Scholar
Varey, Carol and Daniel Kahneman. (1992). “Experiences Extended Across Time: Evaluation of Moments and Episodes,” Journal of Behavioral Decision Making 5, 169–185.Google Scholar
Varian, Hal. (1984). Microeconomic Analysis. New York: Norton.Google Scholar
Wilson, Thomas, Christopher Houston, Kathryn Etling, and Nancy Brekke. (1996). “A New Look at Anchoring Effects: Basic Anchoring and Its Antecedents,” Journal of Experimental Psychology: General 125, 387–402.Google Scholar
Zaller, John. (1992). The Nature and Origins of Mass Opinion. Cambridge, UK: Cambridge University Press.Google Scholar

Copyright information

Authors and Affiliations

Daniel Kahneman
- 1
Ilana Ritov
- 2
David Schkade
- 3

1.Woodrow Wilson School of Public PolicyPrinceton UniversityPrinceton
2.Hebrew UniversityJerusalem
3.University of TexasAustin

Personalised recommendations

Actions

Unlimited access to the full article
Instant download
Include local sales tax if applicable

Subscribe to Journal

Get Access to

Journal of Risk and Uncertainty

for the whole of 2017

Economic Preferences or Attitude Expressions?: An Analysis of Dollar Responses to Public Issues

Abstract

Preview

Copyright information

Authors and Affiliations

Personalised recommendations

Cookies