Improving Willingness-to-Pay Elicitation by Including a Benchmark Good
- (pp. 551-55)
Abstract
We propose and validate a simple way to augment the standard Becker-DeGroot-Marschak method that researchers use to elicit willingness to pay (WTP) for a good. The augmentation is to measure WTP for another good ("benchmark good"), one unrelated to both the good the researcher is interested in and the independent variables of interest, and to use WTP for the benchmark good as a control variable in analyses. We illustrate the method and how it can eliminate noise in measured WTP using data collected in Uganda.Citation
Dizon-Ross, Rebecca, and Seema Jayachandran. 2022. "Improving Willingness-to-Pay Elicitation by Including a Benchmark Good." AEA Papers and Proceedings, 112: 551-55. DOI: 10.1257/pandp.20221053Additional Materials
JEL Classification
- D12 Consumer Economics: Empirical Analysis
- D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
- O12 Microeconomic Analyses of Economic Development