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A Review of WTA/WTP Studies

2001; RELX Group (Netherlands); Linguagem: Inglês

10.2139/ssrn.257336

1556-5068

John K. Horowitz, Kenneth E. McConnell,

Energy, Environment, and Transportation Policies

The difference between willingness to pay (WTP) and willingness to accept (WTA) has been widely studied both through theory and experiments. In a typical experiment, a subject is given some item, like a coffee mug, and offered money to return it to the experimenter. The dollar amount the subject asks for is his WTA. Another subject is not given a mug and instead asked to pay for one. The amount he offers is his WTP. Previous authors have shown that WTA is usually substantially larger than WTP and almost all have remarked that the WTA/WTP ratio is much higher than their economic intuition would predict. The pervasiveness of high WTA/WTP ratios and the wide variety of goods that have been used in the experiments have combined to sustain interest in WTA vs. WTP for roughly thirty years.