Economics, Center for Agricultural and Rural Development
Journal or Book Title
Journal of Environmental Economics and Management
First Page or Article ID Number
We investigate the extent to which dichotomous choice referenda responses are shaped by whether the individual believes the survey itself will ultimately impact policy. Using survey data from the Iowa Lakes Project, we test this supposition. Specifically, we employ a Bayesian treatment effect model in which the degree of perceived consequentiality, measured as an ordinal response, is permitted to have a structural impact on willingness to pay (WTP) for a hypothetical environmental improvement. We test whether the estimated WTP distributions are the same for each value of the ordinal response.
In our survey data, a subsample of individuals were randomly assigned supporting information suggesting that their responses to the questionnaires were important and will have an impact on policy decisions. In conjunction with a Bayesian posterior simulator, we use this source of exogenous variation to identify the structural impacts of consequentiality perceptions on willingness to pay, while controlling for the potential of confounding on unobservables. We find evidence consistent with a “knife-edge” result, namely that the willingness to pay distributions are equal among those believing the survey to be at least minimally consequential, and different for those believing that the survey is irrelevant for policy purposes.
Herriges, Joseph; Kling, Catherine L.; Liu, Chih-Chen; and Tobias, Justin, "What are the consequences of consequentiality?" (2010). Economics Publications. 559.