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Fitted prices with seasonal effects for Fuji apples of two top grades.

Fitted prices with seasonal effects for Fuji apples of two top grades.

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... example, the WAXF#2 seasonal dummy coefficients are 0.41, 0.42, and 0.43 for Jan.-Feb., Mar.-Apr., and May-June fruits from CA storage, indicating their prices increase one cent every two months after the New Year. The seasonal patterns of prices are shown in Figure 1 for grades WAXFP and WAXF#1. ...

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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. (09-WP 486)