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Improving Willingness-to-Pay Elicitation by Including a Benchmark Good (WP-22-11)

Rebecca Dizon-Ross and Seema Jayachandran

The researchers propose and validate a simple way to augment the standard Becker-DeGroot-Marschak method that researchers use to elicit willingness to pay (WTP) for a good. The augmentation is to measure WTP for another good (“benchmark good”), one unrelated to both the good the researcher is interested in and the independent variables of interest, and to use WTP for the benchmark good as a control variable in analyses. The authors illustrate the method and how it can eliminate noise in measured WTP using data collected in Uganda.

This paper is published in AEA Papers and Proceedings.

Rebecca Dizon-Ross, Associate Professor of Economics and Charles E. Merrill Faculty Scholar, University of Chicago

Seema Jayachandran, Breen Family Professor of Economics and IPR Fellow, Northwestern University

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