Question

Suppose there is a faith-based organization providing a group activity to learn about HIV transmission and attempt to prevent it. The pastor at the faith-based organization decided to start asking for donations for participation, but she wanted to get some idea of how much she should expect to receive. To do this, she designed a contingent market valuation survey for her group approach to HIV prevention. She decided to ask the following question to the members of the congregation:

“If we are going to continue to offer the group discussion service to prevent HIV transmission, we need to be able to fund the activity. While we will never ask the participants to pay, we may ask for increased donations and we may have to give up other activities if we are going to maintain this activity but donations are not increased. Would you be willing to donate $500 per year (that is just $10 extra per week) for this cause?”

Following this, she used an iterative bidding process to try to ascertain the exact dollar amount she would get from each member of the congregation. The average income of the congregation members is only $5,000 per family member per year (i.e. $20,000 per year for a family of four).

Question: Please comment on each of the following types of bias with respect to the pastor’s efforts to correctly ascertain the amount she would likely get in donations: starting point bias, vehicle bias, hypothetical bias, and one other bias of your choosing. Note you are not trying to estimate how much the pastor will be able to collect from families. Also note that the income information is provided to help you think about particular biases these individuals may have.

Answer 1