Research / BFI Working Paper•Mar 07, 2022
Improving Willingness-to-Pay Elicitation by Including a Benchmark Good
Rebecca Dizon-Ross, Seema Jayachandran
We propose and validate a simple way to augment the standard Becker-DeGroot-Marschak method that researchers use to elicit willingness to pay (WTP) for a good. The augmentation is to measure WTP for another good (“benchmark good”), one unrelated to both the good the researcher is interested in and the independent variables of interest, and to use WTP for the benchmark good as a control variable in analyses. We illustrate the method and how it can eliminate noise in measured WTP using data collected in Uganda.