Cognitive Dissonance as a Means of Reducing Hypothetical Bias

Frode Alfnes, Chengyan Yue, Helen H. Jensen
February 2009  [09-WP 486]

Download Full Text

Suggested citation:

Alfnes, F., C. Yue, and H.H. Jensen. 2009. "Cognitive Dissonance as a Means of Reducing Hypothetical Bias." Working paper 09-WP 486. Center for Agricultural and Rural Development, Iowa State University.


Hypothetical bias is a persistent problem in stated preference studies. We propose and test a method for reducing hypothetical bias based on the cognitive dissonance literature in social psychology. A central element of this literature is that people prefer not to take inconsistent stands and will change their attitudes and behavior to make them consistent. We find that participants in a stated preference willingness-to-pay study, when told that a nonhypothetical study of similar goods would follow, state significantly lower willingness to pay than participants not so informed. In other words, participants adjust their stated willingness to pay to avoid cognitive dissonance from taking inconsistent stands on their willingness to pay for the good being offered.

Keywords: apples; cognitive consistency; hypothetical bias; instrument calibration; willingness to pay.

JEL classification: C91; Q13; Q51