Economic theory suggests that willingness to pay for two goods independently offered should remain unchanged when the survey instrument changes slightly. Four survey treatments consisting of comprehensive good and a subset of that good were used. The surveys alternated in the question ordering and in the embedded good which accompanied the comprehensive good. We tested for sequencing and instrument context effects using both a combined and split sample designs. In the combined sample case we found some evidence to sequencing effects in the data containing the first subset good. Likelihood ratio tests indicated that sequencing did not effect scale or location of parameters. In the test for instrument context effects, evidence was found indicating context does effect willingness to pay estimates.
Additional publication details
Two valuation questions in one survey: Is it a recipe for sequencing and instrument context effects?