Journal
AGRICULTURAL ECONOMICS
Volume 45, Issue 2, Pages 253-265Publisher
WILEY
DOI: 10.1111/agec.12044
Keywords
Q51; Willingness to pay. Animal welfare; C91; Experimental auctions; Choice experiments; R22; Demand schedule
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Funding
- USDAs Federal State Marketing Improvement Program [12-25-G-0886]
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Choice experiments and experimental auctions have become popular mechanisms for estimating willingness to pay (WTP). However, these methods have primarily been used for estimating WTP for single units of goods. We analyze the results from experimental auctions and choice experiments in the context of multiple quantities of a quasi-public good (animal welfare product). We show that the use of WTP values for a single unit of a product, a common practice in experimental valuation literature, can result in underestimation of aggregate demand. We use and compare open ended choice experiments (OECE), second price Vickrey auctions, and random Nth price auctions as mechanisms for valuing WTP. Our results also suggest that individual level demand estimates from OECE are less elastic than demand estimates from uniform price auctions.
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