From evidence to calibration for starting point bias: willingness to pay for treated mosquito nets in Gujarat, India
Author: Bhatia, M. R.
Source: Applied Economics, Volume 37, Number 1, January 20, 2005 , pp. 1-7(7)
Abstract:This study uses a bidding format to assess households' willingness to pay (WTP) for treated mosquito nets (TMNs). It tests for starting point bias by allocating respondents randomly to three different starting bids (Rs 50, Rs 75 and Rs 100) and following this response with one further closed bid offer and a final open-ended WTP question. There is a clear presence of starting point bias. By undertaking a simulated market experiment (SME), this study attempts to measure the magnitude and direction of the bias so that the necessary calibration factor can be calculated with which to adjust the mean willingness to pay value. It was observed that the true mean WTP adjusted for starting point bias (Rs 56.26) is not very different from the unadjusted mean WTP of Rs 57.38. It is concluded that the presence of starting point bias, even in carefully designed WTP studies using a bidding format, cannot be ruled out. However, the existence of starting point bias itself does not reflect the magnitude of the problem. It is recommended that future WTP studies using a bidding format not only look for starting point bias but also attempt to measure its magnitude.
Document Type: Research Article
Affiliations: Department of Social Policy London School of Economics Houghton Street London WC2A 2AE UK, Email: M.R.Bhatia@lse.ac.uk
Publication date: 2005-01-01