Economics Research Institute Study Paper
Utah State University Department of Economics
In a recent study by John Whitehead in 2002 ("Incentive Incompatibility and StartingPoint Bias in Iterative Valuation Questions"), he proposes incentive-incompatibility and startingpoint- bias tests for iterative willingness-to-pay questions. We show that if restrictions associated with the nature of starting-point bias are not imposed on the estimation, one obtains inconsistent estimates of the structural parameters and may draw inaccurate conclusions regarding the extent of incentive incompatibility and starting-point bias in contingent-valuation survey data.
Aadland, David and Caplan, Arthur J., "A Cautionary Note on Tests for Incentive Incompatibility and Starting-Poing Bias" (2003). Economic Research Institute Study Papers. Paper 265.