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Willingness to Pay for a Green Energy program: A Comparison of Ex-Ante and Ex-Post Hypothetical Bias Mitigation Approaches

ASU Author/Contributor (non-ASU co-authors, if there are any, appear on document)
John Whitehead Ph.D., Professor (Creator)
Institution
Appalachian State University (ASU )
Web Site: http://www.library.appstate.edu/

Abstract: The most persistently troubling empirical result in the contingent valuation method literature is the tendency for hypothetical willingness to pay to overestimate real willingness to pay. Two approaches, ex-ante and ex-post, have been developed to mitigate or eliminate the overstatement of hypothetical willingness to pay. The ex-ante approach addresses hypothetical bias in the survey design stage while the ex-post approach addresses hypothetical bias with follow-up questions to the hypothetical willingness to pay question. We find that willingness to pay estimates are similar when either the ex-ante or ex-post approach are employed. Our results suggest that the approaches should be considered as complements and not substitutes. Employing both approaches to mitigate hypothetical bias we estimate that the annual benefits of the regional amenities associated with a Green Energy program in North Carolina are $186 million.

Additional Information

Publication
Whitehead, J. C. and Cherry, T. L. (2007) Willingness to Pay for a Green Energy program: A Comparison of Ex-Ante and Ex-Post Hypothetical Bias Mitigation Approaches, Resource and Energy Economics, 29(4): 247-261 (Nov 2007). Published by Elsevier (ISSN: 0928-7655).
Language: English
Date: 2007