A field experiment involving cash and hypothetical charitable donations

An important focus for concern about Contingent Valuation (CV) is that hypothetical payments for non-market goods are biased upwards in comparison to cash payments. Lack of realism, through its influence on incentives to mis-report payments, may explain the divergence. This paper reports on a study which attempts to overcome this problem by emulating a real fund-raising solicitation by the Isle of Eigg Trust for both real and hypothetical donations. In contrast to previous results, the mean cash donation was higher (pound 3.71) than the man CV donation (pound 3.41). A third survey, which used a neutral CV design, implemented by a research organization, obtained a mean donation which was much higher (pound 6.21) than the cash equivalent.