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2012-10-15 | Peer Reviewed

Self-image and valuation of moral goods: Stated versus actual willingness to pay

Johansson-Stenman, Olof and Henrik Svedsäter. 2012. “Self-image and valuation of moral goods: Stated versus actual willingness to pay.” Journal of Economic Behavior and Organization 84: 879-891.
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Hypothetical bias in stated-preference methods appears sometimes to be very large, and other times non-existent. This is here largely explained by a model where people derive utility from a positive self-image associated with morally commendable behavior.

The results of a choice experiment are consistent with the predictions of this model; the hypothetical marginal willingness to pay (MWTP) for a moral good (contributions to a WWF project) is significantly higher than the corresponding real-money MWTP, whereas no hypothetical bias is seen for an amoral good (a restaurant voucher). Moreover, the evidence suggests that also the real-money MWTP for the moral good is biased upwards, in the sense that it appears to be higher within than outside the experimental context.