The Adding-Up Test in an Incentivized Value Elicitation Mechanism: The Role of the Income Effect

Levan Elbakidze, Rodolfo M. Nayga, Jr

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

In the context of testing the construct validity of stated preference studies, some researchers advocate the use of an “adding-up test” designed to gauge whether elicited values are sufficiently sensitive to a change in the scope (i.e. size) of a good. Crucial to the applicability of this test in practice, which relies on endowing a subsample of respondents with a good free of charge, is that the income effects due to endowment are negligible. In this study, we apply the adding-up test in an experimental value elicitation format to examine the potential effect of endowment as part of the test design on the adding-up property of elicited values. The results show that the adding-up property can be affected by free provision of part of the bundle.

Original languageEnglish
Pages (from-to)1-20
Number of pages20
JournalEnvironmental and Resource Economics
DOIs
Publication statusAccepted/In press - 2017 Aug 11
Externally publishedYes

Keywords

  • Adding-up test
  • Experimental valuation
  • Income effect
  • Willingness to pay

ASJC Scopus subject areas

  • Aerospace Engineering
  • Management, Monitoring, Policy and Law

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