An empirical comparison of methods to measure willingness to pay by examining the hypothetical bias

In the literature, several methods to measure willingness to pay (WTP) have been proposed. However, there is still little knowledge about their reliability. We empirically test the appropriateness of two methods - open-ended contingent valuation (CV) and limit conjoint analysis (LCA) - for measuring willingness to pay, by examining their hypothetical bias. Significant differences of the WTP values were found between the two methods. Comparing the respective hypothetical biases, LCA performs better than CV, yielding non-significant differences in different purchase situations. Nevertheless, our results may depend on the product category analysed. As a consequence, further studies are needed to determine which factors influence the appropriateness of methods for measuring WTP.