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.     

Public preferences for pasture landscapes in Germany—A latent class analysis of a nationwide discrete choice experiment

Biodiversity, landscape aesthetics and grazing livestock have considerable relevance for agricultural production, however rarely considered in public landscape preferences research. This paper studies public preferences for pasture usage by the means of a discrete choice experiment using a representative sample of 449 individuals from Germany. Graphical representations of the choice sets were used to assess the preferences for the presence of livestock and typical pasture landscape elements. To account for preference heterogeneity, the paper utilised a latent-class logit model. Four different latent classes were identified. The results showed different preferences between the latent classes, not only in terms of the magnitude of the estimated parameters, but also in terms of the parameter signs. This indicated that there are multiple types of preferred pasture landscapes. Within the groups, the preference for livestock presence did not depend on its density. Furthermore, it was found that point elements were more important for the landscape preference than linear elements. The class membership probabilities were influenced by multiple sociodemographic variables, including the individual’s residence.     

Understanding Heterogeneous Consumer Preferences in Chinese Milk Markets: A Latent Class Approach

We examine heterogeneous consumer preferences in Chinese milk markets. Using a discrete choice experiment, we examine how the brand, quality certification, traceability label and price influence consumers' milk choices. We identify four consumer segments using a latent class model: price conscious (9.8%), balanced thinking (19.8%), health conscious (57.5%), and environment conscious (12.9%) consumers. These four segments have distinct preferences: price conscious consumers prefer green certification; balanced thinking consumers have the highest willingness to pay for traceability labels; health conscious consumers have strong brand awareness; and environment conscious consumers prefer organic certification and traceability labels and use price as a quality signal. Such diversity of consumer preference can be explained by four psychological factors: price consciousness, food safety concerns, health consciousness and environmental concerns.     

Mixed integration of individual background,attitudes and tastes for landscape management

This paper discusses the design and analysis of a choice experiment regarding preferences for possible transformations of a mountain landscape traditionally used for grazing. Visual impacts related to changing a mountain landscape associated with a new ski resort development are evaluated versus an option with less environmental impact, such as a health spa or “no development”. A multi-level latent class framework is applied to simultaneously obtain those groups of people who choose similarly and are grouped locally, but are also defined by their location, assuming that their choices are representative of what they like and would choose. Groups from the mountains are classified into one specific grand class. Some individuals who live in urban areas have attitudes and beliefs similar to those who live in the mountains, and they also are classified into that same grand class. The model also identifies seven lower-level groups of individuals, each with their own structure of preferences.     

Public preferences for biodiversity conservation and climate-change mitigation: A choice experiment using ecosystem services indicators

Potential conflicts exist between biodiversity conservation and climate-change mitigation as trade-offs in multiple-use land management. This study aims to evaluate public preferences for biodiversity conservation and climate-change mitigation policy considering respondents’ uncertainty on their choice. We conducted a choice experiment using land-use scenarios in the rural Kushiro watershed in northern Japan. The results showed that the public strongly wish to avoid the extinction of endangered species in preference to climate-change mitigation in the form of carbon sequestration by increasing the area of managed forest. Knowledge of the site and the respondents’ awareness of the personal benefits associated with supporting and regulating services had a positive effect on their preference for conservation plans. Thus, decision-makers should be careful about how they provide ecological information for informed choices concerning ecosystem services tradeoffs. Suggesting targets with explicit indicators will affect public preferences, as well as the willingness of the public to pay for such measures. Furthermore, the elicited-choice probabilities approach is useful for revealing the distribution of relative preferences for incomplete scenarios, thus verifying the effectiveness of indicators introduced in the experiment.     

How Sure Can You Be? A Framework for Considering Delivery Uncertainty in Benefit Assessments Based on Stated Preference Methods

The economic valuation of benefits resulting from environmental policies and interventions often assumes that environmental outcomes are certain. In fact, these outcomes are typically uncertain. This article proposes a methodological approach to incorporate delivery uncertainty into benefit estimation based on stated preference methods. In the study design of a choice experiment survey on land‐based climate change mitigation, we explicitly include delivery uncertainty as the risk that a proposed mitigation project fails to deliver emission savings. We find that respondents’ preferences do not change significantly after being confronted with choices that included risk of failure. However, failure risk itself does have an important impact on the preferences for delivering emission reductions. We show that delivery uncertainty can have a large impact on stated preference estimation of benefits of public programmes. This result should condition conclusions drawn from ex‐ante environmental cost‐benefit analyses that make use of such benefit estimates.     

Linking Consumers’ Food Choice Motives to their Preferences for Insect‐based Food Products: An Application of Integrated Choice and Latent Variable Model in an African Context

Consumers’ attitudes, perceptions, personalities and motives play important roles in shaping their food choices. These factors are not fully observed by analysts, so they should be treated as latent variables. A number of economic studies treat such variables as direct measures of consumers’ food choice behaviour, even though this might introduce measurement error and endogeneity bias. We investigate the latent link between consumers’ preferences and food choice motives (FCMs) in an African context. We use an integrated choice and latent variable (ICLV) model specification for data analysis to recognise the latent nature of the FCMs and address the measurement and bias problems. The data originate from an incentivised discrete choice experiment conducted in Kenya to elicit consumers’ preferences for insect‐based foods. Our findings show that consumers’ preferences and choices are influenced by their latent motivational orientation. The results illustrate the benefit of the ICLV approach in accounting for consumers’ latent preference constructs in food choice and valuation research.     

Are bilateral conservation policies for the Białowieża forest unattainable? Analysis of stated preferences of Polish and Belarusian public

Transboundary nature protected areas constitute a considerable proportion of all the existing spatial forms of biodiversity protection. One prominent example is the Białowieża Forest, shared by Poland and Belarus. There is a considerable literature on allocation of funds to preserving nature shared by several countries. Some of this literature assess the funding schemes and the impacts on biodiversity within the EU. A particular challenge for the Białowieża Forest is that the larger part of it is outside the EU border. There has been less research on the economic benefits that citizens attach to protected transboundary land nature on the other side of the border. We are trying to fill the gap by finding out and comparing preferences towards increased protection of domestic and foreign segments of the transboundary Białowieża Forest, stated by samples of Polish and Belarusian citizens. The results of a discrete choice experiment show an almost unilateral preference for nature conservation, passive protection of forest land, on the domestic side. Whilst Polish respondents on average are willing to pay for an increased area under protection, on their side of the border, most Belarusians seem to be satisfied with the status quo. Taken at face value, there is even an apparent mutual disutility derived from the perspective of co-financing bilateral passive protection programmes in the Białowieża Forest. By use of latent class analyses of responses, a group of the Polish sample willing to contribute to the transboundary conservation is identified and described, and compared against the non-cooperative groups on both sides of the border. The results can to some extent be explained by a strict border division with a high fence, by differences in welfare or by behavioural reasons. However, it cannot be ruled out that the affected populations simply do not perceive the Białowieża Forest as a binational public good.     

Modeling preference heterogeneity in stated choice data: an analysis for public goods generated by agriculture

Stated choice models based on the random utility framework are becoming increasingly popular in the applied economics literature. The need to account for respondents' preference heterogeneity in such models has motivated researchers in agricultural, environmental, health, and transport economics to apply random parameter logit and latent class models. In most of the published literature these models incorporate heterogeneity in preferences through the systematic component of utility. An alternative approach is to investigate heterogeneity through the random component of utility, and covariance heterogeneity models are one means of doing this. In this article we compare these alternative ways of incorporating preference heterogeneity in stated choice models and evaluate the sensitivity of estimated welfare measures to which approach is selected. We find that a latent class approach fits our data best, but all the models perform well in terms of out-of-sample predictions. Finally, we discuss what criteria a researcher can use to decide which approach is most appropriate for a given data set.     

A Comparison Between the Conventional Stated Preference Technique and an Inferred Valuation Approach

Contrary to conventional stated preference valuation techniques that employ a direct questioning approach, the inferred valuation method utilises indirect questioning where respondents are asked for their belief regarding others’ values for a good or service. In this study, using choice experiments, we compare the results obtained through the two valuation techniques for environmental features of the Burren landscape in western Ireland. Consistent with previous studies, stated values using the conventional approach are found to be significantly higher than those obtained through the inferred valuation approach. In particular, this study highlights the dissimilarities in relative preferences observed between the two landscape attributes (rocky limestone pavements and orchid‐rich grasslands) from the two questioning formats. While respondents were indifferent between the two habitats, they believed the ‘average other’ to be significantly more concerned about the conservation of the rocky limestone pavements. We attribute this divergence in preferences to be a consequence of additional normative motives perceived by respondents with regard to the conservation of orchid‐rich grasslands.     

Scale and taste heterogeneity for forest biodiversity: Models of serial nonparticipation and their effects

Serial non-participation is a response behavior that is frequently found in stated choice experiments. One form of serial non-participation is that a varying number of respondents chooses always the zero-price or status quo alternative. The approaches used in the literature to deal with this problem vary from excluding those respondents to using applying latent class models to endogenously allow for different preference structures. However, latent class models also allow to assign respondents to a known class. In this paper we compare specifications of latent class models with and without restrictions. Additionally, we control for differences in the error variance across respondents by applying a scale-extended latent class model. The comparisons are designed to show whether respondents are allocated differently among classes and whether willingness to pay estimates are affected significantly. The data are from a choice experiment regarding management actions to enhance forest biodiversity. The data set is characterized by a high percentage of respondents who were not willing to pay; almost 50% of the respondents always chose the zero price alternative locating this sample rather at the top of the range of respondents who are not willing to pay.     

Resettlement preferences from landslide prone areas in Cameroon: Willingness to move,reasons to stay

Information about resettlement preferences is an important prerequisite for the success of voluntary resettlement as a disaster risk reduction strategy. Yet, even in conditions where individual preferences for resettlement are met, resettlement programs may fail. In this study, we confront individual preferences for resettlement with obstacles to resettlement in order to identify conditions for success and failure of voluntary resettlement. Semi-structured interviews and focus groups discussions are combined with a structured household survey and a discrete choice experiment to elicit individual resettlement preferences among farmers living in the landslide-prone Bamboutos caldera, in Cameroon. A mixed logit model and a latent class model are used to assess resettlement preferences and to investigate differences in preferences between socioeconomic groups. We find that, in general, people are willing to resettle away from landslide prone areas to safer areas, but that preferences for resettlement conditions vary between socioeconomic groups. Wealthier households show a greater willingness to resettle, especially to locations with improved road infrastructure, while poorer respondents are less willing to resettle, especially when this can negatively affect their social network. Beyond individual preferences, resettlement strongly depends on group behavior, historical events and trust in institutions. The stumbling blocks in the Bamboutos caldera include border disputes at the resettlement location, the high cost of resettlement and administrative challenges. With this case study, we demonstrate the added value of complementing a discrete choice experiment with qualitative research, as it leads to an integrated view of the resettlement situation of the affected population.     

Farmers’ Preferences for Production Practices: A Choice Experiment Study in the Rhone River Delta

This article examines farmers' preferences for both cropping and management practices, which are of policy interest because of their environmental impact. We present the results of a choice experiment survey of all agricultural decision makers in the Camargue region. A latent class model identified three classes. The main class encompasses farmers complying with the norms of the Protected Geographical Indication (PGI): Riz de Camargue. We estimated the monetary value of each of the relevant agricultural practices. Our results make a strong case for differentiating incentives to encourage environmentally friendly practices and identify the diversity of values attached to the main components of rice cropping technology in the area. Estimates of the implicit prices indicate that most rice growers can be persuaded to adopt environmentally friendly practices. These findings could help in designing targeted contracts according to farmers' preferences, in line with conservation or environmental objectives.     

Assessing the trade‐offs of increased mining activity in the Surat Basin,Queensland: preferences of Brisbane residents using nonmarket valuation techniques

The mining boom in Australia since 2003 has produced significant economic benefits for regional, State and National economies, creating new job opportunities and revenue flows. Despite the contribution of the resources sector to economic growth, questions are frequently raised about the concomitant negative social, economic and environmental impacts. The Surat Basin in southern Queensland is a traditional agricultural region with a small but growing coal mining sector and a rapidly developing liquefied natural gas industry (mainly associated with extracting coal seam gas). In this paper, the preferences of residents in Brisbane, the State capital, are explored in relation to the relative importance of social, economic and environmental impacts of the resource boom in the Surat Basin. A choice modelling experiment was conducted to assess the trade‐offs Brisbane residents would make (in monetary terms) between the economic benefits and the associated costs of increased mining activity on local communities. The results identify the strength of concerns about community and environmental impacts and can potentially be used to help evaluate the net benefits of resource development.     

Rural Amenity Values and Length of Residency

New residents of rural communities are often assumed to have preferences for development and conservation that differ from those of longer-term residents. However, the literature offers little to quantify presumed preference heterogeneity. This article assesses whether stated preferences differ according to length of residency. Results are based on a conjoint (choice experiment) survey of Rhode Island rural residents. Heterogeneity—according to length of town residency—is modeled using dummy variables, multiplicative interactions, and Lagrangian interpolation polynomials. Results are compared across the three models, and identify a range of attributes for which willingness to pay depends on length of residency.     

Eliciting farmers’ subjective probabilities,risk, and uncertainty preferences using contextualized field experiments

Subjective probabilities as well as risk and uncertainty preferences influence many farmers’ decisions. Few contextualized field experiments were recently conducted to elicit farmers’ risk preferences. Contextualized field experiments use nonabstract framings that are familiar to subjects. Despite adding of context can undermine internal validity, such experiments are increasingly used in applied economics. Contextualized field experiments were never used to elicit farmers’ uncertainty preferences. This paper aims to fill this gap in the literature. This required the development of a new approach in which uncertainty preferences were estimated while controlling for farmers’ subjective probabilities regarding future agricultural outcomes. The experiment involves Scottish farmers’ decisions to plant traditional or new potato varieties. Monetary incentives and incentive compatible elicitation techniques, such as quadratic scoring rules and certainty equivalent multiple price lists, were used. Results from the estimation of Fechner models using maximum likelihood estimation procedures show that failure to control for subjective probabilities generates an underestimation of estimated uncertainty preferences. Farmers are more averse to uncertainty than risk, and their choices are noisier under uncertainty than risk.     

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.     

Expert judgements and community values: preference heterogeneity for protecting river ecology in Western Australia

Western Australia's Swan River is a complex asset providing environmental, recreational and commercial benefits. Agencies responsible for its management rely extensively on advice from experts, whose preferences may or may not align with those of the community. Using a choice experiment, we compared public and expert preferences for managing the river's ecology and tested the application of budget‐reallocation and personal‐cost payment vehicles. The results indicate that the budget‐reallocation method is a suitable payment vehicle for public and expert samples, although there are some differences to the more traditional personal‐cost vehicles because of different trade‐offs involved. Modelling revealed heterogeneity in preferences. Expert and public preferences were statistically different from one another at the mean, but a significant amount of heterogeneity existed in the populations sampled. The differences in preferences across both public and expert groups suggest that the measurement of public values for the environment is still an important part of the management process, even when experts are providing advice.     

Eliciting Consumer WTP for Food Characteristics in a Developing Context: Application of Four Valuation Methods in an African Market

We elicit willingness to pay for conventional, organic and/or food‐safety‐inspected tomatoes in a traditional African food market. We identify four elicitation methods that can be conducted with one respondent at a time, and use them in a field setting: the Becker–DeGroot–Marschak mechanism, multiple price lists, multiple price lists with stated quantities, and real‐choice experiments. All four methods give similar results; showing that consumers are willing to pay a premium for organic and food‐safety‐inspected tomatoes. However, the size of the premium is significantly larger when consumers choose between alternatives than when they indicate their reservation price. The new multiple price lists with stated quantities were easy to explain in the busy market setting, gave the respondents the opportunity to determine the amount they wanted to buy, and had valuations in line with the other non‐comparative valuation methods.     

Testing Choice Experiment for Benefit Transfer with Preference Heterogeneity

Benefit transfer is a cost-effective method for estimating the value of environmental goods that relies on information obtained in previous studies. The multiattribute approach of choice experiments should provide advantages in terms of benefit transfer, allowing differences in environmental improvements between sites as well as differences in socioeconomic and attitude characteristics between respondent populations. This article investigates the capability of choice experiment method to be used in environmental benefit transfer when a random parameters approach is used to allow for preference heterogeneity: we find that the inclusion of respondents' taste heterogeneity reduces the magnitude of the transfer error.