We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
An experimental examination of intrinsic values as a source of the WTA-WTP disparity.
- Authors
Boyce, Rebecca R.; Brown, Thomas C.; McClelland, Gary H.; Peterson, George L.; Schulze, William D.
- Abstract
The experimental evidence suggests that the disparity between willingness to accept compensation to give something up (WTA) exceeds willingness to pay to obtain the same thing (WTP) by a factor of about two. However, field studies of the value of environmental goods have shown disparities between WTA and WTP of factors from two to more than ten. The framing effect caused by a difference in implicit property rights when shifting from WTP to WTA may contribute to the disparity between these measures. These results raise the question of the source of differing amounts of loss aversion for different commodities. The results also imply that WTA values may be valid welfare measures which should be incorporated into benefit-cost analysis. However, the conceptual model developed admits the possibility that lexicographic moral preferences may exist for commodities that have intrinsic value. In this case, moral values can imply infinite WTA values even though WTP values can be small or zero. It is difficult to see how such infinite individual WTA values can be incorporated into benefit-cost analysis or he used for damage assessments in litigation.
- Subjects
FINANCE; WILLINGNESS to pay; COMMERCIAL products; COST effectiveness; MORALE; ACTIONS &; defenses (Law); DAMAGES (Law); VALUE (Economics)
- Publication
American Economic Review, 1992, Vol 82, Issue 5, p1366
- ISSN
0002-8282
- Publication type
Article