News

05 March 2019

The sensitivity of willingness to pay to an economic downturn

A new paper now available online: Metcalfe, P.J. and Baker, W. (2014) The Sensitivity of Willingness to Pay to an Economic Downturn, Journal of Environmental Economics and Policy. The paper assesses the reliability of values taken before an economic downturn for application during the downturn, via analysis of responses to two near-identical surveys conducted, respectively, before and during the 2008-2010 economic recession. Our main result is that the economic downturn led to lower payment card responses but had no effect on the values elicited via a dichotomous choice (i.e. referendum-type) contingent valuation question. We explore potential explanations for this finding in light of the literature on closed-ended versus open-ended elicitation method comparisons.