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 todetermine consumers’ willingness to pay (WTP) for rice with improved insect control and forrice stored using Integrated Pest Management (IPM).This study investigates two potential reasons – anchoring and information – for why somestudies have found apparent inconsistencies between auction and choice experiment results.Results indicate that consumers’ WTP derived in the auction and choice experiments aresignificantly different. Consumers’ average bids in the auction are higher than their willingnessto pay calculated from the choice experiments. Further, anchoring in the choice experimentappears to be an explanation for the discrepancy. Providing consumers with more productinformation help consumers behave more consistent in terms of having same preference rankingfor different rice samples in the auction and the choice experiments, but their average does notsubstantially affect the discrepancy.