Why do people non-demand reveal in hypothetical double referenda for public goods?

Abstract

Hypothetical Contingent Valuation (CV) Surveys used to elicit values for environmental and other public goods often employ variants of the referendum mechanism due to the cognitive simplicity and familiarity of respondents with this voting format. One variant, the double referendum mechanism, requires respondents to state twice how they would vote for a given policy proposal given their cost of the good. Data from these surveys often exhibit anomalies inconsistent with standard economic models of consumer preferences. There are a number of published explanations for these anomalies, mostly focusing on problems with the second vote. This paper investigates which aspects of the hypothetical task affect the degree of non-demand revelation and takes an individual-based approach to identifying people most likely to non- demand reveal. A clear profile emerges from our model of an individual most likely to non-demand reveal as one who faces a negative surplus i.e. a net loss in the second vote and invokes non-self interested, non-financial motivations during the decision process.