Self-image and valuation of moral goods: Stated versus actual willingness to pay

Hypothetical bias in stated-preference methods appears sometimes to be very large, and other times non-existent. This is here largely explained by a model where people derive utility from a positive self-image associated with morally commendable behavior. The results of a choice experiment are consistent with the predictions of this model; the hypothetical marginal willingness to pay (MWTP) for a moral good (contributions to a WWF project) is significantly higher than the corresponding real-money MWTP, whereas no hypothetical bias is seen for an amoral good (a restaurant voucher). Moreover, the evidence suggests that also the real-money MWTP for the moral good is biased upwards, in the sense that it appears to be higher within than outside the experimental context.

► Observed hypothetical bias in stated-preference studies is sometimes large and sometimes non-existent.
► The variation is explained by a model where people derive utility from a positive self-image.
► The results of a choice experiment are consistent with the predictions of the model.
► A substantial hypothetical bias is obtained for a moral good (contributions to a WWF project).
► No hypothetical bias is present for an amoral good (a restaurant voucher).