Daily Court Reporter - News OSU study finds that people say they spend more than they do
OSU study finds that people say they spend more than they do
BRANDON KLEIN, Daily Reporter Staff Writer
A researcher from The Ohio State University found that people say they spend more than they actually do.
"People said they'd spend about twice as much, on average, as they actually spent when faced with more realistic circumstances," said Wuyang Hu, a co-lead researcher of the study, in a statement.
"Unfortunately, in many circumstances, it's extremely difficult to observe people's actual behavior, so we have to use these hypothetical, made-up scenarios," Hu said. "The problem is, we know that what people say they will spend and what they actually spend don't always line up."
The focus of the study was about the presence of "hypothetical bias," which describes the underlying cause of the gap.
The phenonmenon is often associated with methods that try to describe human behavior, which is common in environmental valuation, marketing, medical research and other studies.
"Hypothetical bias is really the tip of the iceberg in the entire human behavior puzzle that everyone's trying to crack in economics. Hopefully this brings us a little bit closer to the truth," Hu said.
Ohio State reported that Hu and his co-author, Jerrod Penn of Louisiana State University, selected 132 studies from 500 articles that included hypothetical questions and an experiment that created a real-life spending experience the university stated in a release.
Hu's study provides a meta-analysis, providing an exploration of hypothetical bias' source and the methods to mitigate it.
For example, lawyers struggled to determine the clean-up costs for the 1989 Exxon-Valdez oil spill in Alaska.
"Sometimes people are aware they're being observed. Sometimes they have no idea. But it's not really a grocery store or a conservation group's office where you're making an actual donation. It's an experiment, so we take those so-called 'real' spending observations with a grain of salt as well," Hu said in Ohio State's report.
In addition, the researchers found three effective ways to mitigate hypothetical bias.
Researchers can use cheap talk to address the issue of the study with their subjects; ask subjects to rate their certainty about a given survey response; or emphasize to participants the value of an honest response.
"This means that exploring and testing new mitigation methods and how methods can complement each other continues to be a valuable avenue of future research," Penn stated.
The study appears in the American Journal of Agricultural Economics.
Date Published: July 24, 2018