<abstract xmlns="http://www.w3.org/1999/xhtml"><p>Whether respondents disclose their preferences truthfully in surveys that are used to assess the values of public goods remains a crucial question for the practical application of stated preference methods. The literature suggests that in order to elicit true preferences, respondents should see a valuation survey as consequential: they must believe in the actual consequences that may follow from the survey result. Drawing on recent empirical findings, we develop a model depicting the importance of the consequentiality requirement for truthful preference disclosure in a survey that evaluates a public policy project based on a referendum-format value elicitation question. First, we show that a respondent’s belief that his vote may influence the outcome of the referendum plays a central role for revealing his preferences truthfully. Second, we find that the subjectively perceived probabilities of the successful provision of the public good and of the collection of the payment related to the project implementation not only need to be positive but also to be in a particular relationship with each other. This relationship varies in respondents’ preferences towards risk.</p></abstract>

Whether respondents disclose their preferences truthfully in surveys that are used to assess the values of public goods remains a crucial question for the practical application of stated preference methods. The literature suggests that in order to elicit true preferences, respondents should see a valuation survey as consequential: they must believe in the actual consequences that may follow from the survey result. Drawing on recent empirical findings, we develop a model depicting the importance of the consequentiality requirement for truthful preference disclosure in a survey that evaluates a public policy project based on a referendum-format value elicitation question. First, we show that a respondent’s belief that his vote may influence the outcome of the referendum plays a central role for revealing his preferences truthfully. Second, we find that the subjectively perceived probabilities of the successful provision of the public good and of the collection of the payment related to the project implementation not only need to be positive but also to be in a particular relationship with each other. This relationship varies in respondents’ preferences towards risk.

A Consequential Contingent Valuation Referendum: Still Not Enough to Elicit True Preferences for Public Goods!

Central European Economic Journal

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Whether respondents disclose their preferences truthfully in surveys that are used to assess the values of public goods remains a crucial question for the...

Value of g(b)	Value of g(b) for b = 0	Incentive properties of the referendum
Case 1:p_s(v) = 0 and 0 < p_p(v) ≤ 1 g(b) = P_p(b + c)[U(–c\r) – U(0\|r)]	g(0) = p_p(v)[U(–c\|r) – U(0\|r)] < 0	EU_y < EU_N′ incentives to vote “no”
Case 1: p_s(v) = 1 and 0 < p_p(v).≤1 g(b) = [1 – p_p(b + c)] U(b +c\|r) + p_p(b + c) U(b\|r) – U(0\|r)	g(0) = [1–p_p(v)[U(c\|r) – U(0\|r)] > 0	EU_y > EU_N′ incentives to vote “yes”
Case 1: p_p(v) = 0 and 0 < p_s(v) < 1 g(b) = p(b + c)[U(b + c\|r) – U(0\|r)]	g(0) = p_s(v)[U(c\|r) – U(0\|r)] > 0	EU_y > EU_N′ incentives to vote “yes”
Case 1:p_p(v) = 1 and 0 < p_s(v) < 1 g(b) = [1 – p_s(b + c)] U(–c\|r) + p_s(b + c)U(b\r) – U(0\|r)	g(0) = [1 – p_s(v)][U(–c\r) – U(0\|r)] < 0	EU_y < EU_N′ incentives to vote “no”

	Payment collected (p_p,i (ν_i))	Payment not collected (1 – p_p(ν_i))
The good successfully provided (p_s,i(ν_i))	U_i (ν_i– c_i\|r_i)	U_i (ν_i\r_i)
The good not successfully provided (1 – p_S,i(ν_i))	U_i (–c_i\r_i)	U_i(0\|r_i)

A Consequential Contingent Valuation Referendum: Still Not Enough to Elicit True Preferences for Public Goods!

Online veröffentlicht: 21. März 2018

Seitenbereich: 73 - 90

DOI: https://doi.org/10.1515/ceej-2017-0012

Schlüsselwörter
contingent valuation, stated preferences, incentive compatibility, advisory referendum, payment consequentiality, provision consequentiality

© 2017 E. Zawojska

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Incentive properties of an advisory CV referendum when one of ps and pp is equal to 0 or 1 and the other probability takes a different value

Individual i’s utility upon the authorities’ decision to implement the project

A Consequential Contingent Valuation Referendum: Still Not Enough to Elicit True Preferences for Public Goods!

Online veröffentlicht: 21. März 2018

Seitenbereich: 73 - 90

DOI: https://doi.org/10.1515/ceej-2017-0012

Schlüsselwörtercontingent valuation, stated preferences, incentive compatibility, advisory referendum, payment consequentiality, provision consequentiality

© 2017 E. Zawojska

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Incentive properties of an advisory CV referendum when one of ps and pp is equal to 0 or 1 and the other probability takes a different value

Individual i’s utility upon the authorities’ decision to implement the project

Schlüsselwörter
contingent valuation, stated preferences, incentive compatibility, advisory referendum, payment consequentiality, provision consequentiality