Willingness to pay for quality in experimental auction markets and stated choice surveys

Abstract

The principal objective of this thesis is to investigate the willingness to pay for quality. The thesis consists of four papers exploring Norwegian consumer preferences for imported and hormone-treated beef. The first paper presents an analysis of a stated choice survey using a mixed logit model. Target markets for imported and hormone-treated beef are identified, and microsimulations are used to predict market shares and illuminate substitutions patterns. The second paper presents an analysis of an experimental auction market conducted to elicit realistic willingness to pay values for imported and hormone-treated beef. The third paper presents a new method for calibrating hypothetical willingness to pay values estimated from stated choice surveys with willingness to pay values obtained from experimental auctions. The fourth paper presents a new method for incorporating the results of an experimental auction into the joint logit model normally used to combine revealed and stated choice data. The new methods proposed in the third and fourth paper are illustrated with the data analyzed in the first and second papers.