Effects of study design characteristics on the WTA-WTP disparity: a meta analytical framework

Abstract

We investigate the effects of certain factors related to study design and elicitation techniques on the WTA-WTP disparity. These factors are: explicit statement of the price, iterative bidding, within/between-subjects nature of the design, and out-of-pocket payments. We adopt a meta analytic approach to generalize from prior studies. This enables us to examine our hypotheses as well as other factors discussed in the literature. Our findings suggest that iterative bidding and within-subjects designs decrease the WTA-WTP disparity, whereas out-of-pocket payments increases the disparity-compared to tax reductions and other indirect payments. The effect of explicitly stating the price of the good to the respondents seems to be insignificant.