Consumer versus citizen preferences in contingent valuation: evidence on the role of question framing*

Rather than individual consumer preferences, responses to referendum‐style contingent valuation surveys on environmental goods may express citizen assessments that take into account benefits to others. We reconsider the consumer versus citizen hypothesis with a focus on the role of framing information. Survey data on conservation areas in Ilomantsi, Finland, are used. Different versions of the valuation question were used to encourage the respondents to take the consumer or the citizen role. The citizen version expectedly resulted in substantially fewer zero‐WTP responses and protests and higher mean and median WTP, suggesting that the framing information has a major effect on the preferences expressed. The findings support the idea of multiple preferences. For a more confident interpretation of contingent valuation responses, future studies should recognise their intended use in survey design and gain information about respondents' motives to determine the presence and type of altruistic motives.     

Does private income support sustainable agroforestry in Spanish dehesa?

Oak woodland dehesa suffers from the aging of trees without a natural regeneration of young oaks coming in to replace them. Recent European Union (EU) policy reforms for rural development focus on supporting multifunctional agriculture that complies with the EU's environmental goals, such as mitigating biodiversity losses and climate change. Such reforms could result in government support for natural woodland regeneration practices in European agroforestry systems, which are recognized for providing valuable environmental services. Managing dehesa cork oak and holm oak woodlands to stimulate the growth of new oaks could be an efficient option for maintaining, and even increasing, the dehesa's current carbon stock and biodiversity. Here we develop and apply a new agroforestry accounting system based on the concept of Hicksian income to a dehesa in the Monfragüe area of western Spain, using primary microeconomic data from a large case study. Private total income and profitability rates are measured for individual goods and services, and for the entire dehesa in a steady state. Our application extends the EU system of accounts for agriculture and forestry by including private amenity consumption by landowners and the gain or loss in human-made and natural capital. We compare an actual typical unsustainable woodland management scenario with an ideal sustainable management scenario in which there is a continuous regeneration and recruitment of holm and cork oaks as predicted by silvicultural models. The results show that, given current land use policy incentives, allowing a slow depletion of oak trees is more profitable for a dehesa private landowner than maintaining the dehesa's trees. As a result many dehesa environmental services are gradually lost. This market failure requires new land use policies that induce private land owners to invest in the renewal of aging oak woodlands. To evaluate the impacts of this new policy, we show how private landowner income is affected when changes are made to achieve sustainable management of dehesa oaks. More research is needed in order to understand how the dehesa's landowner market income and private amenities trade-off can affect the owner's land use preferences and decisions.     

The Impacts of Elicitation Context on Stated Preferences for Agricultural Landscapes

Statements of willingness to pay (WTP) have been shown to be dependent upon the framing of the hypothetical market. In this paper we investigate the effects of variations in the timing and location of choice experiment questions concerned with conservation of a UK national park, as research involving measurement of psychological well‐being suggests potential differences for the same individual dependent upon when and where preferences are elicited. We apply the choice experiment technique to the valuation of changes in upland agricultural and semi‐natural landscapes in the Peak District National Park in the UK, to investigate whether timing and location of elicitation (context) affects the value associated with changes in ecosystem services under different management regimes. Four treatments are employed – using the same sample of individuals answering the same choice scenarios – to measure WTP ex‐ante (off site), in situ (on site), and ex‐post at two different time intervals (off site). We show that our on‐site (in situ) treatment generates very different estimates of preferences than any of the off‐site treatments. That stated preferences associated with environmental goods are so context dependent may have implications for the use of stated preferences in policy analysis in terms of identifying how environmental policy is funded and the divergence in value attributed to sampling different populations.     

20 years of stated preference valuation of non-timber benefits from Fennoscandian forests: A meta-analysis

Stated preference (SP) surveys have been conducted to value non-timber benefits (NTBs) from forests in Norway, Sweden and Finland for about 20 years. The paper first reviews the literature and summarises methodological traditions in SP research in the three countries. Second, a meta-regression analysis is conducted explaining systematic variation in Willingness-to-Pay (WTP). Two important conclusions emerge, with relevance for future research: (1) WTP is found to be insensitive to the size of the forest, casting doubt on the use of simplified WTP/area measures for complex environmental goods; and (2) WTP tends to be higher if people are asked as individuals rather than on behalf of their household.     

Testing hypothetical bias in a framed field experiment

Hypothetical bias is tested based on inter- and intra-respondent comparisons of choice behavior, applying a hypothetical and real choice experiment. The inter-respondent comparison commonly applied in the environmental and agricultural economics literature consists of a control group of buyers who are asked to hypothetically choose between conventional and organic beans and an experimental group of buyers who are endowed to purchase the same beans using an identical experimental design. Hypothetical bias is tested by comparing inter- and intra-respondents’ (i) hypothetical and real choices, (ii) preference parameters of the estimated choice models related to hypothetical and real choices, and (iii) hypothetical and real willingness to pay (WTP). Choices in the experimental group are highly consistent when switching from hypothetical to real choices for this study's homegrown goods. However, after being endowed, the price sensitivity of lower income households drops, suggesting a house money effect. WTP derived from actual purchases is higher than WTP based on hypothetical choices, indicating a negative hypothetical bias, but differences are only significant in the case of the inter-respondent comparison. Actual prices paid by respondents in the field experiment appear to be considerably lower than the estimated WTP values and yield a mixed picture of hypothetical bias.     

Total income and ecosystem service sustainability index: Accounting applications to holm oak dehesa case study in Andalusia-Spain

This research develops the novel concept of an economic ecosystem service sustainability index from the perspective of total income theory, and presents its empirical application at the spatial unit scale of the agroforestry farm. This paper compares the results accrued from applying the refined standard System of National Accounts (rSNA) and the authors’ Agroforestry Accounting System (AAS). The AAS extends the rSNA to capture economic activities without manufactured production costs and substitutes the production cost valuations for exchange values revealed/stated by consumer willingness to pay for consumption of final products without market prices, the aim being to provide more comprehensive figures for total and environmental incomes of the agroforestry farms. Both accounting frameworks are applied to a case study of sixteen large, non-industrial, privately-owned holm oak dehesas (agroforestry farms) in Andalusia-Spain. This dehesa application provides estimates for the economic ecosystem service, total income factorial allocation, total capital and economic ecosystem service sustainability index for the aggregate and individual economic activities of the dehesa, distributed between accounts for the farmer and government institutional sector economic activities. The AAS explicit measurements of the hidden rSNA ecosystem services and environmental incomes of the dehesa allow us to further our scientific understanding of the current and future contributions of environmental income from nature to the total income of society as well as to provide information to the policy makers so that action can be taken to mitigate the depletion and degradation of environmental assets. This dehesa application reveals that environmental income measured by the AAS accounts for 67 % of total income in 2010. The dehesa AAS and rSNA ecosystem services share 34 % and 26 % of total product consumptions, respectively. Coupled with the AAS economic ecosystem service sustainability index of 0.5 and the rSNA economic ecosystem service sustainability index of 0.2, these figures indicate total product over-consumption in 2010. The dehesa case study shows that the AAS ecosystem services and environmental incomes are 2.5 and 8.4 times higher than those of the rSNA, respectively. Once the theoretic robustness of non-market product consumption simulated transaction value is accepted, as in the AAS methodology, the expected official economic ecosystem accounting framework will mainly depend on its ongoing standardization by the United Nations Statistical Division and implementation by individual governments. Thus, the challenge of standardizing and implementing such a framework is more closely linked to governmental policy measures than to the current scientific weakness of non-market product consumption valuations.     

Economic evaluation of ecosystem goods and services under different landscape management scenarios

Human-induced changes in the natural environment are affecting the provision of ecosystem goods and services (EGS). Land use plans rarely include the value of public ecosystem services such as climate regulation and biodiversity due to difficulties in valuing these services. In this study, we assessed total economic value for five important ecosystem goods and services under five future land-use scenarios using varying levels of costs, prices and discount rates. Results indicated that at higher discount rates normally applied to commercial activities, and assuming the current prices for goods and services, net present value (NPV) was highest for landscape management scenarios aimed at maximising agricultural production. Potential income from services such as carbon and biodiversity does not offset projected income lost from agriculture due to land-use changes. At higher discount rates, NPV was negative for the two scenarios aimed at enhancing the longer term ecological sustainability of the landscape. These results indicate that income from carbon sequestration and biodiversity conservation would need to be considerably higher than current levels in order to justify focusing management of this landscape on ecological outcomes. At lower discount rates (at levels normally associated with public investments), the more ecologically appropriate ‘mosaic farming system’ had the highest NPV, indicating that this type of system might be attractive for investors interested in longer term return horizons or wider public benefits. Higher income from carbon or biodiversity, or increased return from timber by using high value tree species, could potentially make more ecologically appropriate systems profitable at higher discount rates.     

Using Geographically Weighted Choice Models to Account for the Spatial Heterogeneity of Preferences

In this paper, we investigate the use of geographically weighted choice models for modelling spatially clustered preferences. We argue that this is a useful way of generating highly‐detailed spatial maps of willingness to pay for environmental conservation, given the costs of collecting data. The data used in this study come from a discrete choice experiment survey of public preferences for the implementation of a new national forest management and protection programme in Poland. We combine these with high‐resolution spatial data related to local forest characteristics. Using locally estimated discrete choice models we obtain location‐specific estimates of willingness to pay (WTP). Variation in these estimates is explained by characteristics of the forests close to where respondents live. These results are compared with those obtained from a more typical, two stage procedure which uses Bayesian posterior means of the mixed logit model random parameters to calculate location‐specific estimates of WTP. We find that there are indeed strong spatial patterns to the benefits of changes to the management to national forests. People living in areas with more species‐rich forests and those living nearer bigger areas of mixed forests have significantly different WTP values than those living in other locations. This kind of information potentially enables a better distributional analysis of the gains and losses from changes to natural resource management, and better targeting of investments in forest quality.     

Examining demand for urban river rehabilitation in Indonesia: Insights from a spatially explicit discrete choice experiment

The demand for urban river rehabilitation can be measured through stated preference surveys such as choice experiments, providing information on the welfare estimates of a particular approach. We deploy such a technique in the context of plans to rehabilitate a major river in Jakarta, Indonesia. The current plan focuses on widening and canalizing the downstream segment of the river within Jakarta’s administrative boundary. We hypothesize that residents would demand (and thus be willing to pay for) additional components of an ecological rehabilitation program in the form of riverside park space and upstream forest conservation outside of Jakarta’s jurisdiction. We develop a spatially-explicit discrete choice experiment in which households register their preferences for channel widening, park space, forest conservation, and a monthly fee to fund the rehabilitation. Using mixed logit models we find significant and substantial demand for both park space and forest conservation, with a lower bound on the total willingness to pay (WTP) of greater than US $4 million per year for park space and nearly US $6 million per year to support reforestation in the upper catchment. These estimates are based on households within the catchment, but we find that demand did not seem to decay with distance so the upper bound on total WTP could be substantially higher. We also find that household income level has a strong effect on marginal WTP for forest conservation, minimal effect on marginal WTP for park space, and that location along the river influenced WTP for park space and channel widening. This provides further evidence that there is substantial demand for river rehabilitation in developing world cities, and that choice experiments can provide information relevant to land use planning.     

NON-COMPENSATORY PREFERENCE STRUCTURES IN NON-MARKET VALUATION OF NATURAL AREA POLICY

Non-compensatory preferences may form a significant component of individuals' values for non-market goods such as natural areas, especially in the context of a reduction in environmental quality. The widespread neglect of such preferences can result in erroneous estimates of changes in economic welfare. Non-market valuation using techniques such as contingent valuation therefore need to take into account the possibility that some individuals hold noncompensatory preferences. The formal structure of the lexicographic noncompensatory ordering is described, and the theoretical implications of an individual holding such preferences over some region of goods space is examined. A method for the empirical identification of non-compensatory preference orderings is outlined.     

Are French consumers ready to pay a premium for eco‐labeled seafood products? A contingent valuation estimation with heterogeneous anchoring

Could the future French eco‐label for fresh seafood products find its place in the French market? This study employs a contingent valuation method to estimate French consumers’ willingness‐to‐pay (WTP) for eco‐labeled fresh seafood products. We exploit original data from a survey carried out in 2010, where 626 participants responded to a double‐bounded dichotomous choice model, through an ascending or descending bid system. Controlling for shift and anchoring effects in random effect probit models, we significantly improve estimation of WTP and its determinants for the three species studied (monkfish, lobster, sole), in particular when using heterogeneous anchoring. We show that WTP is positively correlated to respondents’ income, and also to their environmental concern, to living alone, to living far from the coast, and to trusting NGOs or public institutions more than producer organizations to implement an eco‐label. We also show that the mean price premiums do not differ between species. Finally, on average, the maximum premium consumers accepted to pay is approximately 10% of the product price.     

Willingness to Pay and QALYs: What Can We Learn about Valuing Foodborne Risk?

This paper examines the value of reducing foodborne risk. Previous research on the valuation of health risk has been dominated by the study of mortality risk. However, in most cases foodborne illnesses are non‐fatal, so we focus on individuals' preferences for reducing morbidity risk, while also including a realistic, if remote, chance of death. We use a contingent valuation method on a Swedish sample and we estimate a value of a statistical illness consistent with previous findings in the literature. We also examine how willingness to pay (WTP) varies with the expected change in quality‐adjusted life years (QALYs) and estimate the WTP per QALY. We find that WTP increases with, though less than proportionally to, a change in QALYs. However, our results also suggest that respondents may have found it difficult to evaluate compound risks of both morbidity and mortality simultaneously.     

Consumers’ Willingness to Pay for Sustainable Seafood Made in Europe

Sustainability of increasing relevance also for seafood markets. The aim of this contribution is to analyze consumer preferences and their willingness to pay (WTP) for different sustainability claims, and to identify consumer segments according to their WTP. The contingent valuation method was applied to elicit consumers’ WTP in eight European countries. The WTP varies between seven and almost 20%, depending on attribute and country. Three consumer groups become apparent: the largest group without any additional WTP, a smaller group with a moderate additional WTP of plus 17%, and a very small group with an additional WTP of more than 40%. Clear differences between countries are obvious regarding preferences for different sustainability attributes, particularly in the segment with the highest WTP. A fraction of the consumers is willing to pay significantly higher prices for sustainably produced fish from Europe: given that trustful standards are applied and well communicated.     

Consumer Valuation of Environmentally Friendly Production Practices in Wines,considering Asymmetric Information and Sensory Effects

Agricultural producers and food marketers are increasingly responding to environmentally friendly cues from consumers, even though privately appropriated values associated with a range of food products commonly rank above their public‐good counterparts. Wine can be considered an ideal product to examine these issues given consumers’ highly subjective sensory preferences towards wine, and a winegrape production process that is relatively intensive in the use of chemical inputs for the control of disease and infection. Semi‐dry Riesling wines made from field research trials following environmentally friendly canopy management practices were utilised in a lab experiment to better understand preferences for environmental attributes in wine. A combined sensory and monetary evaluation framework explicitly considered asymmetric order effects. Empirical results revealed that sensory effects dominate extrinsic environmental attributes. Once consumer willingness to pay (WTP) was conditioned on a wine’s sensory attributes, the addition of environmentally friendly information did not affect their WTP; however, adding sensory information significantly influenced WTP initially based only on environmental attributes. The results confirm the idea that promoting environmentally friendly winegrape production practices would increase demand and lead to higher premiums for the products, but are only sustainable if consumers’ sensory expectations are met on quality.     

Convergent validity in contingent valuation: an application to the willingness to pay for national climate change mitigation targets in Germany

This stated preferences survey determines the willingness to pay (WTP) for climate change mitigation policies using a representative sample of the German population. WTP is compared across three valuation question formats in a split sample design: the dichotomous choice (DC) referendum, the dissonance minimizing (DM) referendum and the two‐way payment ladder (TWPL). The influence of multinational cooperation on WTP is assessed by variation in the hypothetical scenarios. We demonstrate that the DM referendum and the TWPL, two question formats that induce similar response incentives, yield equal mean WTPs. Multinational cooperation did not change WTP in any of the question formats. Implications for current contingent valuation practice are discussed.     

A meta-analysis of the willingness to pay for reductions in pesticide risk exposure

We review the empirical valuation literature on pesticide riskexposure and develop a taxonomy of environmental and human healthrisks associated with pesticide usage. Meta-analysis is thenused to investigate the variation in willingness to pay (WTP)estimates for reduced pesticide risk exposure. Our findingsshow that the WTP for reduced risk exposure is 15 per cent greaterfor medium, and 80 per cent greater for high risk levels, ascompared with low risk levels. The income elasticity of reducedpesticide risk exposure is generally not significantly differentfrom zero. Stated preference approaches based on choice experimentsand revealed preference provide lower WTP estimates than contingentvaluation techniques. Survey design, type of safety device (eco-labelling,integrated pest management, or bans) and chosen payment vehicleare important drivers of the valuation results.     

Consumer Willingness to Pay for Low-Pesticide Fresh Produce in Taiwan

Willingness to pay (WTP) for reductions in health risk associated with consuming pesticide residues on vegetables are estimated using the contingent valuation method with in-person interviews of married females in Taiwan. Estimated median WTP for 25 per cent, 50 per cent and 90 per cent reductions in the risk of developing cancer from consuming pesticide residues on a popular Taiwanese vegetable, bok choy, are estimated as 46 per cent, 56 per cent and 75 per cent of the current price of bok choy, respectively. WTP is significantly related to the scope or magnitude of the risk reduction, although it varies less than proportionately to the risk increment. WTP is also significantly related to measures of consumer preferences for health.     

Off-farm labor supply responses to permanent and transitory farm income

A sample of Iowa farm couples is used to evaluate whether off‐farm labor supply decisions respond to permanent and transitory components of farm income. Off‐farm labor supply of both spouses declines in response to increases in permanent farm income. Farm wives also reduce off‐farm labor supply in response to positive transitory farm income shocks. Consequently, one mechanism farm households use to smooth their goods consumption when facing fluctuating farm income is to modify their consumption of leisure. Ability to smooth goods consumption does not imply the absence of liquidity constraints among farm households unless leisure consumption is also smoothed.     

Heterogeneity in male and female farmers’ preference for a profit-enhancing and labor-saving technology: The case of Direct-Seeded Rice (DSR) in India

Labor-saving and income-increasing technologies may affect women farmers differently from men. However, very few studies explicitly account for women's preferences for new technologies. We carried out a discrete choice experiment with 337 female and 329 male farmers in Maharashtra, India, to measure their willingness to pay (WTP) for direct-seeded rice (DSR) with drum seeder and to understand the gender differences in marginal valuations of key attributes. We used the Women's Empowerment in Agriculture Index (WEAI) to collect self-reported data on the role and say of women in different domains of decision making. The respective gender roles of women and men in the family and on the farm are aligned with their preferences. Men have a greater say over how the family spends the cash. Accordingly, men tend to have a higher WTP for attributes that increase income (increase in yield) or reduce cash costs (reduction in seed rate). Women contribute a large share of the labor for transplanting rice, much of which is unpaid work on family farms. Women, therefore, seem to value labor saving more. Women in our sample were more interested in the new technology and had a higher WTP for it.     

淡水养殖系统环境损害成本的条件价值评估——以淀山湖水源保护区为例

水产养殖生态系统为人类提供了巨大的生态服务价值,但也造成一定程度的环境污染。本文利用CVM方法调查了淀山湖区域居民对水产养殖系统环境损害成本的支付意愿。分析结果表明,只有23.5%的居民对解决水产养殖造成的淀山湖生态环境损害存在支付意愿。利用单边界两分式问卷调查发现,对于水产养殖生态系统的环境污染治理的平均支付意愿为15.92元/人·年。据此计算,淀山湖周边三镇水产养殖系统的环境损害成本为每年276.7万元。居民治理水产养殖环境污染的支付意愿受收入、性别等社会经济因素的影响。