A BEJEAP Contributions article.

Abstract

Eliciting actual donations toward a public good has been proposed as a means of estimating a lower bound to individuals’ compensating surplus, and can be accomplished using mail/phone surveys or field experiments. This study shows that when warm-glow is present, the elicitation instrument decreases the transaction costs of donating. This presents an obstacle to using the donation mechanism. As a remedy, we propose the use of a multi-donation mechanism where subjects can direct their donation to alternative public goods. Results from a field experiment confirm this instrument-induced bias can be large, suggesting field experiment practitioners should seriously consider how their experimental procedures may alter economic behavior.

Submitted: February 21, 2005 · Accepted: January 13, 2006 · Published: February 27, 2006

Originally published in Contributions to Economic Analysis & Policy.

Recommended Citation

Norwood, Bailey and Lusk, Jayson L. (2006) "Instrument-Induced Bias in Donation Mechanisms: Evidence from the Field," Contributions to Economic Analysis & Policy: Vol. 5 : Iss. 2, Article 3.
Available at: http://www.bepress.com/bejeap/contributions/vol5/iss2/art3