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Title: The endowment effect and WTA: a quasi-experimental test

Author: MacDonald, H.F.; Bowker, J. Michael;

Date: 1993

Source: J. Agr. and Applied Econ., Vol. 26(2): 545-551

Publication Series: Miscellaneous Publication

Description: This paper reports a test of the endowment effect in an economic analysis of localized air pollution. Regression techniques are used to test the significance of perceived property rights on household WTP for improved air quality versus WTA compensation to forgo an improvement in air quality. Our experimental contributes to the research into WTP/WTA divergence by providing a new basis for supporting the existence of an endowment effect. Our results are in contrast to recent work by shogren et al. which supports the substitution proposition of Hanemann while rejecting the endowment effect.

Keywords: contingent valuation, endowment effect, property rights, substitution effect

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MacDonald, H.F.; Bowker, J. Michael 1993. The endowment effect and WTA: a quasi-experimental test. J. Agr. and Applied Econ., Vol. 26(2): 545-551


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