WTP vs. WTA: Christmas Presents and the Endowment Effect

Abstract

SummaryUsing data on the valuation of Christmas gifts received by students enrolled in different fields at a German university, we investigate whether the endowment effect, the difference between asking and bidding prices, differs between males and females, students of economics and other fields and whether it varies with the market price of the object under consideration. Our estimation results suggest that female students display a significantly higher endowment effect, indicating that experimental studies on the endowment effect are highly sensitive towards the choice of the subject pool. The results further indicate that the endowment effect depends on the market price of the object. Finally, even though the point estimates hint towards both, a lower WTP and WTA of economic students, these differences are not statistically significant at conventional levels.