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Overheating Willingness to Pay: Who Gets Warm Glow and What It Means for Valuation

Published online by Cambridge University Press:  15 September 2016

Matthew G. Interis  and
Timothy C. Haab
Matthew G. Interis*
Affiliation:
Department of Agricultural Economics at Mississippi State University
Timothy C. Haab
Affiliation:
Department of Agricultural, Environmental, and Development Economics at Ohio State University
*
Correspondence: Department of Agricultural Economics, P.O. Box 5187, Mississippi State, MS 39762, Phone 662.325.4787, Email interis@agecon.msstate.edu.
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Abstract

In traditional contingent valuation, the researcher seeks the amount a respondent is willing, ceteris paribus, to pay to obtain something. But if a respondent receives a “warm glow” from a yes response, ceteris is not paribus. In estimating willingness to pay (WTP) to reduce environmental impacts from consumption of transportation fuel, we find that respondents who were relatively less environmentally focused in the past receive greater warm-glow benefits from a “yes” response and have greater “warm” WTP (WTP that includes warm-glow benefits). Yet respondents who were relatively more environmentally focused in the past have greater “cold” WTP (WTP excluding warm-glow benefits).

Keywords

contingent valuationwarm glowwillingness to pay
Type
Research Article
Information
Agricultural and Resource Economics Review , Volume 43 , Issue 2 , August 2014 , pp. 266 - 278
Copyright
Copyright © 2014 Northeastern Agricultural and Resource Economics Association 

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