What is the causal impact of information and knowledge in stated preference studies?

Needham, K., Czajkowski, M., Hanley, N. and LaRiviere, J. (2018) What is the causal impact of information and knowledge in stated preference studies? Resource and Energy Economics, 54, pp. 69-89. (doi: 10.1016/j.reseneeco.2018.09.001)

Abstract

This paper reports the results of a stated preference experiment designed to test how information about a good’s attributes provided in a survey affects knowledge, and how knowledge affects preferences for that good. A novel experimental design allows us to elicit subjects’ ex ante knowledge levels about a public good’s attributes, exogenously vary how much new objective information about these attributes we provide to subjects, elicit subjects’ valuation for the good, and elicit posterior knowledge states about the same attributes. We find evidence of incomplete learning and fatigue: as subjects are told more information, their marginal learning rates decrease. Consistent with previous work, ex ante knowledge does affect stated willingness to pay. However, we find no significant marginal impact of knowledge on the mean nor the variance of willingness to pay for changes in the environmental good conditional on ex ante knowledge. Our results are consistent with a number of conceptual models of information processing and preferences, including confirmation bias, costly search, and timing differences in learning and preference formation.

• Item Type: Articles
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Czajkowski, Dr Mikolaj and Simpson, Dr Katherine and Hanley, Professor Nicholas
• Authors: Needham, K., Czajkowski, M., Hanley, N., and LaRiviere, J.
• College/School: College of Social Sciences > Adam Smith Business School > Economics; College of Medical Veterinary and Life Sciences > School of Biodiversity, One Health & Veterinary Medicine
• Journal Name: Resource and Energy Economics
• Publisher: Elsevier
• ISSN: 0928-7655
• ISSN (Online): 1873-0221
• Published Online: 06 September 2018
• Copyright Holders: Copyright © 2018 The Authors
• First Published: First published in Resource and Energy Economics 54: 69-89
• Publisher Policy: Reproduced under a Creative Commons License