Vol.:(0123456789) Environment, Development and Sustainability https://doi.org/10.1007/s10668-019-00490-6 1 3 Social desirability and the WTP–WTA disparity in common goods Achilleas Vassilopoulos 1,2  · Niki Avgeraki 3  · Stathis Klonaris 4 Received: 10 May 2018 / Accepted: 3 October 2019 © Springer Nature B.V. 2019 Abstract This study explores the role of social desirability bias in the willingness to pay (WTP)– willingness to accept (WTA) disparity debate. In the context of a valuation scenario involv- ing air quality in Athens, Greece, we examine whether the well-known WTP–WTA dispar- ity is in place and whether social desirability could be related to this gap by introducing diferent magnitudes of bias on the two welfare measures. To do so, we contrast the results obtained from the contingent valuation method with those from the inferred valuation method that is believed to mitigate social desirability bias. On the policy side, the study shows that estimates of welfare loss associated with the Greek government’s decision to equalize the tax on diesel fuel and heating oil, which had serious side-efects on air quality, vary greatly with respect to the value measure and method of elicitation. Keywords WTP–WTA disparity · Social desirability bias · Smog · Greece · Air quality · Contingent valuation · Inferred valuation 1 Introduction Within the realm of stated preference methods, contingent valuation (CV) method is the most frequently used and is considered a more appropriate method for evaluating the non- market value of goods, such as health status and air quality that cannot be tradable in the marketplace (Hanemann 1994; Portney 1994; Johnston et al. 2017). The CV method has its * Achilleas Vassilopoulos avas@uoi.gr Niki Avgeraki elpiniki.avgeraki15@imperial.ac.uk Stathis Klonaris s.klonaris@aua.gr 1 Department of Economics, University of Ioannina, Ioannina, Greece 2 ICRE8: International Centre for Research on the Environment and the Economy, Athens, Greece 3 Imperial College of London, South Kensington, London SW7 1NA, UK 4 Department of Agricultural Economics and Rural Development, Agricultural University of Athens, Athens, Greece