Abstract
This paper focuses on the welfare effects of information computed from experimental methods eliciting willingness-topay. First, a theoretical model shows that the size of the welfare variation is related to the elasticity of the demand under the absence of information about a characteristic. Second, our estimates indicate that consumer demand from a laboratory auction is more price-elastic than time-series demand for similar products. As a result, the welfare change directly derived from individual willingness-to-pay is overestimated compared to the welfare change linked to an approach combining time-series demand with the mean willingness-to-pay premium.
| Original language | English |
|---|---|
| Pages (from-to) | 1585-1593 |
| Number of pages | 9 |
| Journal | Economics Bulletin |
| Volume | 30 |
| Issue number | 2 |
| State | Published - 2010 |