Do Consumers Really Know How Much They Are Willing to Pay?

Previous research reveals willingness‐to‐pay (WTP) obtained through consumer surveys and experiments is often influenced by arbitrary information that, from a normative perspective, should have no influence on WTP. This article utilizes data collected from a split‐sample online survey to determine whether the bias induced from arbitrary anchors can be mitigated with a preference elicitation approach designed to facilitate the preference‐discovery process by revealing tradeoffs and consequences implied by stated WTP. The approach forces internal consistency between statements of value and preference orderings. We compare the WTP elicited using the new approach to two more simplified elicitation devices by determining sensitivity to an arbitrary anchor and by determining predictive validity relative to a holdout choice. Our results indicate that the imposition of internal consistency yields more stable estimates of WTP; however, there is no evidence to support the hypothesis that the method provides WTP estimates that lead to a higher degree of predictive validity .     

THE DECREASING INFLUENCE OF DOMESTIC MARKET STRUCTURE ON RACIAL EARNINGS DIFFERENTIALS: 1984 TO 1996

This study investigates the market concentration/racial earnings discrimination relationship in two periods: 1984–90 and 1991–96. In each period, the racial wage gap and the residual wage gap are compared for union and nonunion workers in monopolistic and competitive industries. The authors find no evidence of market structure–driven discrimination for union workers in either period. However, from the first to the second period they find evidence of increased racial earnings differentials for nonunion workers, yet market structure–driven discrimination decreases. The authors suggest that concentration has become a less effective measure of market power and firms' latitude to discriminate. (JEL J31, J71 )     

HOURS OF SLEEP AND FATIGUE IN MOTOR CARRIAGE

Using data from the Trucking Industry Program Survey of Drivers, the article examines hours of sleep and fatigue among truck drivers. The analysis finds that hours of sleep are inversely related to work time. Using a logit model of falling asleep at the wheel, the authors find hours of sleep, time spent driving, and hours of service violations significantly affect the likelihood of dozing at the wheel. These findings suggest that altering work rules and pay schemes could mitigate the safety problems caused by fatigue. (JEL L9 , I18 )