Humboldt-Universität zu Berlin - Quarterly Journal of International Agriculture

Quarterly Journal of International Agriculture No. 4/06

Do expected income changes bias contingent valuation willingness-to-pay figures?

Franz Hackl and Gerald J. Pruckner
University of Linz, Austria


This paper shows that expectations about future income changes may bias respondents’ answers in contingent valuation (CV) studies. A practicable ex post approach to control for these biases is proposed: based on the interviewees’ individual assessment of the personal future income situation, expected income changes can be econometrically corrected for in CV. This is illustrated by CV data on an Austrian national park, the creation of which causes expected income losses and gains in the forestry and tourism sector.

Keywords: contingent valuation, environmental cost-benefit analysis, expected income changes, applied welfare measures

JEL: D6, H4, Q2

Vol. 45 (2006), No. 4: 421-435