Factors Explaining Hypothetical Bias: How to Improve Models for Meta-Analyses

Using a set of 462 observations from 87 public and private goods economic valuation studies, this study reviews and updates meta-analyses on hypothetical bias using a metaregression hierarchical mixed-effect (MRHME) model that corrects the effects of the unobservable characteristics, within-study error correlation, and potential heteroskedasticity specific to each study. The findings indicate that the MRHME model is more efficient than the log-linear models used in previous meta-analyses. Moreover, this modeling approach and the use of interaction variables by type of goods highlight significant differences relative to previous meta-analyses in the explanatory variables’ effects, significance levels, magnitudes, and signs.