Design which includes WTP and WTA tasks sequentially

[izakro]

Dear all,
We are trying to estimate the Value of Lost Load (VoLL) for the Ministry of Energy.
The Ministry is interested in both values of WTA (for the interruption in electricity supply) and WTP to avoid it.
The question is: does it make any sense to ask the same respondents to answer, say, 3 scenarios of WTP followed by 3 of scenarios WTA
(the order can be determined randomly).
I have noticed that some studies have taken this approach but I'm not sure.
Thanks in advance,
R.

[Michiel Bliemer]

WTP consists of asking decision-makers how much they are willing to pay to avoid a negative or to accept a positive outcome, while WTA goes for compensation and asks how much a decision-maker would like to be paid to accept a negative outcome or to forego a positive one. Whether you ask for WTP or WTA is a matter of framing.

Framing effects often occur, for example you can frame a choice task in such a way that you say something in a positive way ("your health with increase") or in a negative way ("you have a lower risk of dying"). Framing may influence choice behaviour. So WTA and WTP could be considered as asking the same question using positive or negative framing and they may give different results.

If you are interested in investigating what is the best way to convince consumers/producers to get the best outcome, then you could consider both WTA and WTP. However, if the Ministry of Energy already has a specific framing in mind to explain things to consumers/producers, then perhaps best use that. For example, in the transport domain, it is more natural to speak of WTP a toll to save travel time instead of WTA more travel time at a lower toll cost.

Michiel

[izakro]

Thank you Michiel. That helped a lot.