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Duke Economics Working Paper #96-04

Buying Time: Real and Hypothetical Offers

V. Kerry Smith and Carol Mansfield

Abstract

This paper provides the results of a field test of contingent valuation estimates within a willingness to accept framework. Using dichotomous choice questions in telephone-mail-telephone interviews, we compare responses to real and hypothetical offers to survey respondents for the opportunity to spend time in a second set of interviews on an undisclosed topic. Five hundred and forty people were randomly split between the real and hypothetical treatments. Our findings indicate no significant differences between people's choices with real and hypothetical offers. Choice models indicate the size of the offer and income were significant determinants of respondents' decisions, and these models were not significantly different between real and hypothetical offers.

Key Words: Contingent value, real and hypothetical offer, willingness to accept, experiment.

JEL: C93, D12, Q2

Published in Journal of Environmental Economics and Management, Vol. 36, No. 3, November 1998, pp. 209-224.