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Warm glow, free-riding and vehicle neutrality in a health-related contingent valuation study
Franz Hackl1, Gerald J Pruckner
1Department of Economics, Johannes Kepler University of Linz, Austria. franz.hackl@jku.at
Abstract:
Criticism of contingent valuation (CV) stresses warm glow and free-riding as possible causes for biased willingness to pay figures. We present an empirical framework to study the existence of warm glow and free-riding in hypothetical WTP answers based on a CV survey for the measurement of health-related Red Cross services. Both in conventional double-bounded and spike models we do not find indication of warm glow phenomena and free-riding behaviour. The results are very robust and insensitive to the applied payment vehicles. Theoretical objections against CV do not find sufficient empirical support.
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