Willingness to Pay and Willingness to Accept: have the differences been resolved?

This paper demonstrates that the results recently presented by Shogren et al (1994) are insufficient to reject the endowment effect as a significant cause of the divergence between willingness to pay (WTP) and willingness to accept (WPA) values. A more transparent means of testing for the presence of an endowment effect is discussed and the combined role that the endowment effect and the degree of substitutability may play in this disparity is illustrated. Finally, experimental evidence, drawn from the literature, is shown to support the argument that the endowment effect is a source of the persistent WTP/WTA disparity.