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Quick and easy? Respondent evaluations of the Becker–DeGroot–Marschak and multiple price list valuation mechanisms

Asioli, D. ORCID: https://orcid.org/0000-0003-2274-8450, Mignani, A. and Alfnes, F. (2020) Quick and easy? Respondent evaluations of the Becker–DeGroot–Marschak and multiple price list valuation mechanisms. Agribusiness. ISSN 0742-4477

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To link to this item DOI: 10.1002/agr.21668

Abstract/Summary

This article is the first to investigate respondents’ ease of understanding and answering valuation questions related to the Becker–DeGroot–Marschak (BDM) and multiple price list (MPL) mechanisms. Using a between-subjects design, we elicit willingness to pay (WTP) for healthy snack bars using two mechanisms, ask questions about ease of understanding and answering the valuation questions, and record the response times to the valuation questions. We do not find significant differences in estimated WTP and response times between the two methods. However, the respondents in the MPL sessions found it easier to understand this mechanism and decide on a response than those in the BDM sessions. As a result of our findings, we recommend that MPL is adopted over BDM when there is limited opportunity to explain or learn the method prior to the valuation or when one is concerned that a complicated design can affect the willingness to participate and thereby create selection bias. Both concerns will often apply when small and medium size agribusinesses conduct market testing of their products in stores or field markets.

Item Type:Article
Refereed:Yes
Divisions:Faculty of Life Sciences > School of Agriculture, Policy and Development > Economic and Social Sciences Division > Agricultural and Food Investigational Team (AFIT)
ID Code:92681
Publisher:Wiley

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