Donation payment mechanisms and contingent valuation: An empirical study of hypothetical bias

Donation payment mechanisms are well suited for some contingent valuation s tudies. In an effort to better understand the discrepancy that has been con sistently found between actual and hypothetical donations, we investigate a n approach to estimating actual willingness to donate using contingent dona tions with a follow-up question in which respondents rate the level of cert ainty about their response to the contingent donation question. The approac h allows us to estimate the magnitude of the hypothetical bias and identify the respondents responsible for the bias. Identification of the respondent s responsible for the hypothetical bias is the first step toward developing an understanding of the causes and possible remedies. In this study we fin d that most of the respondents (80%) to the contingent donation question pr ovide a response consistent with how we predict they would respond in an ac tual donation situation.