A Comparison of Auction and Choice Experiment: An Application to Consumer Willingness to Pay for Rice with Improved Storage Management

Experimental auction and discrete choice experiment are two popular value elicitation methods. Theoretically they should yield the same results but empirical results have been mixed (e.g., Lusk and Schroeder 2004, 2006; Corrigan et al. 2010.) This study uses both methods to determine consumers’ willingness to pay (WTP) for rice with improved insect control and for rice stored using Integrated Pest Management (IPM). This study investigates two potential reasons – anchoring and information – for why some studies have found apparent inconsistencies between auction and choice experiment results. Results indicate that consumers’ WTP derived in the auction and choice experiments are significantly different. Consumers’ average bids in the auction are higher than their willingness to pay calculated from the choice experiments. Further, anchoring in the choice experiment appears to be an explanation for the discrepancy. Providing consumers with more product information help consumers behave more consistent in terms of having same preference ranking for different rice samples in the auction and the choice experiments, but their average does not substantially affect the discrepancy.