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Value elicitation for multiple quantities of a quasi-public good using open ended choice experiments and uniform price auctions

Authors

  • Levan Elbakidze,

    Corresponding author
    1. Assistant Professor, Department of Agricultural Economics and Rural Sociology, University of Idaho, Moscow, USA
    • Corresponding author. Tel.: 208-885-7382; fax: 208-885-5759. E-mail address: lelbakidze@uidaho.edu (L. Elbakidze).

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  • Rodolfo M. Nayga Jr.,

    1. Professor and Tyson Endowed Chair, Division of Agriculture, Department of Agricultural Economics and Agribusiness, University of Arkansas, Fayetteville, USA
    2. Adjunct Professor, Department of Food and Resource Economics, Korea University, Seoul, South Korea
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  • Hao Li,

    1. Graduate Student, School of Economic Sciences, Washington State University, PO Box 646210, Pullman, WA, USA
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  • Chris McIntosh

    1. Professor, Department of Agricultural Economics and Rural Sociology, University of Idaho, Moscow, ID 83844-2334, USA
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Abstract

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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