Pennies from Heaven? A Test of the Social Budget Constraint in a Willingness to Accept Compensation Elicitation Format

The paper analyses the effect of a social budged constraint on compensation claims in a contingent valuation (CV) survey with a willingness to accept (WTA) format. One starting point of the work is that the CV literature generally recommends to use the willingness to pay question rather than the WTA format. Being based on a deficient realisation of WTA surveys, such recommendations ignore the significance of the social budget constraint in WTA hypothetical markets. The experiment showed clearly that explicit mention of a social budget constraint in the WTA question format has a significant effect on the compensations claimed.