What Differences Do Certainty and Cheap Talk Make in Eliciting Willingness to Pay for Education?

Hypothetical estimates of willingness to pay tend to overstate real willingness to pay. Several methods to mitigate this so called hypothetical bias have been developed. This paper contributes by presenting the first simultaneous comparison of three common hypothetical bias mitigation methods as well as their interactions. In addition, the study represents the first use of the contingent valuation method to value higher education. The findings of the study suggest that models adjusting for certainty according to definitely sure yes responses are most similar to the model that adjusts for certainty at a level of 8 or higher. These calibrations yield point estimates of mean willingness to pay only a quarter to a third of estimates that do not account for certainty. Surprisingly the cheap talk treatment leads to yes respondents indicating responses with a higher level of certainty and higher mean willingness to pay.