Efficacy of hypothetical bias mitigation techniques: A cross-country comparison

Abstract

Hypothetical Bias (HB) remains challenging for practitioners of stated preference approaches. One elusive idea is the extent to which country and culture may affect HB's magnitude and the efficacy of mitigation methods. This paper implements both real and hypothetical elicitation in the United States and China in the context of a field survey and experiment for battery recycling containers to establish the extent of HB. It compares multiple HB mitigation strategies, namely Cheap Talk, Ex Ante Consequentiality, and Certainty Follow-up in the two countries. Results show that a significant amount of actual HB exists. The ex ante methods are ineffective at reducing HB in both countries. The Certainty Follow-up method can be effective but can overcorrect, especially for the Chinese sample. Results also indicate that comparing the efficacy of different mitigation strategies based on only hypothetical scenarios (potential HB) across countries may lead to erroneous conclusions. This study calls for treating country and cultural differences more seriously when conducting international valuation work.