Which Response Format Reveals the Truth about Donations to a Public Good?

Abstract

Several contingent valuation studies have found that the open-ended format yields lower estimates of willingness to pay (WTP) than does the closed-ended, or dichotomous choice, format. In this study, WTP for a public environmental good was estimated under four conditions: actual payment in response to open-ended and closed-ended requests, and hypothetical payment in response to open-ended and closed-ended requests. The experimental results, showing that the response format mattered far more for hypothetical than for actual payments, support conclusions about the reasons that the dichotomous choice format yields larger estimates of hypothetical WTP, conclusions that hinge on the hypothetical nature of contingent valuation.