Alternative value elicitation formats in contingent valuation: Mechanism design and convergent validity

To date, much of the theoretical work on the incentive properties of contingent valuation surveys has focused on the oft-recommended single binary choice (SBC), referendum format. This work has identified conditions under which an SBC elicitation is incentive compatible, and empirical evidence lends support to the predictive power of the theory. Nevertheless, researchers and practitioners commonly use alternative elicitation formats, and defend their design choices based on efficiency and other criteria. In this study, we demonstrate that it is possible to identify conditions under which alternative elicitation formats are incentive compatible, using as examples open ended (OE) and payment card (PC) question formats. We then implement theory-informed value elicitations in the context of a flood control policy for New York City. We fail to reject convergent validity in mean willingness to pay when comparing the theory-driven OE format with SBC, but reject convergent validity between the theory-driven PC and SBC formats. As an informative counterfactual, we find that a “standard” OE elicitation congruent with prior work leads to significantly lower values and a lower proportion of respondents who view the elicitation as consequential.