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2004•RePEc: Research Papers in EconomicsRequires access

Does Uncertainty Affect the Divergence between WTP and WTA Measures

Murat Işık

Open publisher page 10 citations

Abstract

Many empirical studies have demonstrated large discrepancies between willingness to accept (WTA) and willingness to pay (WTP) measures. This paper examines the extent to which uncertainty about the environmental quality improvement can lead to a divergence between WTP and WTA measures. Indirect utility function parameters and uncertainty about the environmental quality change affect the extent to which WTP and WTA measures can differ. These results have implications for design and implementation of contingent valuation surveys.

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What this paper is about

Many empirical studies have demonstrated large discrepancies between willingness to accept (WTA) and willingness to pay (WTP) measures. This paper examines the extent to which uncertainty about the environmental quality improvement can lead to a divergence between WTP and WTA measures. Indirect utility function parameters and uncertainty about the environmental quality change affect the extent to which WTP and WTA measures can differ. These results have implications for design and implementation of contingent valuation surveys.

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OpenAlex reports 10 citations for this work. Citation counts describe recorded attention and do not establish research quality.

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Available abstract

Many empirical studies have demonstrated large discrepancies between willingness to accept (WTA) and willingness to pay (WTP) measures. This paper examines the extent to which uncertainty about the environmental quality improvement can lead to a divergence between WTP and WTA measures. Indirect utility function parameters and uncertainty about the environmental quality change affect the extent to which WTP and WTA measures can differ. These results have implications for design and implementation of contingent valuation surveys.

Key concepts: Willingness to pay, Willingness to accept, Contingent valuation, Affect (linguistics), Economics, Divergence (linguistics), Environmental quality, Econometrics

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