Are There Income Effects on Global Willingness to Pay for Biodiversity Conservation?

This paper is concerned with the empirical relationship between biodiversity conservation values and income. We use random effects panel models to examine the effects of income, and then GDP per capita, on willingness to pay for habitat and biodiversity conservation. In a meta-analysis, 145 Willingness To Pay estimates for biodiversity conservation where existence value plays a major role were collected from 46 contingent valuation studies across six continents. Other effects included in the meta-analysis were the study year; habitat type; continent; scope as presented to respondents; whether WTP bids were for preventing a deterioration or gaining an improvement in conservation, whether a specific species or specific habitat was protected; whether the questionnaire used a dichotomous choice or an open-ended format; distribution format; and the choice of payment vehicle. GDP per capita seemed to perform as well as an explanatory variable as respondent’s mean stated income, indicating that it is wealth in society as a whole which determines variations in WTP. Even if large variation, our main conclusion is, that the demand for biodiversity conservation rises with a nation’s wealth, but the income elasticity of willingness to pay is less than one.     

Enhanced Geospatial Validity for Meta-analysis and Environmental Benefit Transfer: An Application to Water Quality Improvements

Meta-regression models are commonly used within benefit transfer to estimate willingness to pay (WTP) for environmental quality improvements. Theory suggests that these estimates should be sensitive to geospatial factors including resource scale, market extent, and the availability of substitutes and complements. Valuation meta-regression models addressing the quantity of non-market commodities sometimes incorporate spatial variables that proxy for a subset of these effects. However, meta-analyses of WTP for environmental quality generally omit geospatial factors such as these, leading to benefit transfers that are invariant to these factors. This paper reports on a meta-regression model for water quality benefit transfer that incorporates spatially explicit factors predicted by theory to influence WTP. The metadata are drawn from stated preference studies that estimate per household WTP for water quality changes in United States water bodies, and combine primary study information with extensive geospatial data from external sources. Results find that geospatial variables are associated with significant WTP variations as predicted by theory, and that inclusion of these variables reduces transfer errors.     

Meta-Analytic Benefit Transfer of Outdoor Recreation Economic Values: Testing Out-of-Sample Convergent Validity

A benefit transfer approach to recreationeconomic valuation using meta-analysis isexamined. Since the meta- regression modeltakes into account some of the study specificeffects on willingness to pay (WTP) estimates,benefit transfer using meta-analysis couldyield a valid WTP estimate of unstudiedrecreation resources. The convergent validityof the meta-analytic benefit transfer is testedusing out-of-sample original studies from theU.S. The analyses are performed usingpercentage difference, paired t-test,regression and correlation tests. The testsreveal mixed results on convergence betweenestimated WTP using meta-analytic benefittransfer function (BTF) and out-of-sampleoriginal WTP values. There is a fairly highpercentage difference between the estimated andoriginal WTP values (80–88%), and the meandifferences are statistically significant asshown by paired t-tests. However, correlationand regression results consistently showsignificant positive relationships betweennational BTF estimated and original WTP valuesindicating some level of convergence. Theresults show that the national BTF outperformthe regional BTF indicating a potential of thenational BTF for recreation benefit transferwhen a first best primary valuation study isnot affordable.     

Valuing water quality improvements in the United States using meta-analysis: Is the glass half-full or half-empty for national policy analysis?

The literature estimating the economic value for water quality changes has grown considerably over the last 30 years, resulting in an expanded pool of information potentially available to support national and regional policy analysis. Using 131 willingness to pay estimates from 18 studies that use a similar definition of water quality, we performed a meta-regression analysis and found mixed results. We find that WTP varies in systematic and expected ways with respect to factors such as the size of the water quality changes, average household income, and use/nonuse characteristics of respondents. As a whole, we conclude that our meta-regression results provide a reasonable basis for estimating expected WTP values for defined changes in water quality. However, despite a large number of existing economic valuation studies, relatively few could be meaningfully combined through meta-analysis due to heterogeneity in the commodities being valued in the original studies. Based on these findings, we provide recommendations for future research, including suggestions regarding more standardized approaches for defining water quality and reporting information in valuation studies.     

The Validity of Environmental Benefits Transfer: Further Empirical Testing

This paper provides further empirical evidence of the validity of environmental benefits transfer based on CV studies by expanding the analysis to include control factors which have not been accounted for in previous studies. These factors refer to differences in respondent attitudes. Traditional population characteristics were taken into account, but these variables do not explain why respondents from the same socio-economic group may still hold different beliefs, norms or values and hence have different attitudes and consequently state different WTP amounts. The test results are mixed. The function transfer approach is valid in one case, but is rejected in the 3 other cases investigated in this paper. We provide further evidence that in the case of statistically valid benefits transfer, the function approach results in a more robust benefits transfer than the unit value approach. We also show that the equality of coefficient estimates is a necessary, but insufficient condition for valid benefit function transfer and discuss the implications for previous and future validity testing.     

Respondent direct experience and contingent willingness to pay for new commodities: a switching endogenous interval regression analysis

Most environmental economists argue that direct experience with the good being valuated, or with similar goods, is a precondition for providing valid willingness to pay (WTP) responses to contingent valuation questions. Two questions are posed in this article. The first is whether previous use experience of a resource (Séné nature reserve) similar to that being valuated (future nature reserves) and located in the same geographical area (Gulf of Morbihan) impacts on WTP. The second is whether accounting for the endogeneity of direct experience matters in the estimation of WTP. We find that respondents who have not experienced the Séné nature reserve provide value estimates that are statistically comparable to that of respondents who have experienced it. Our assumption is that respondents have acquired sufficient and adequate experience of future nature reserves from the questionnaire that experience obtained by experiencing the Séné nature reserve was not necessary for making a valid value formulation. Hence, aggregation of WTP estimates to obtain a total valuation of the future nature reserves is reasonable over the full target population. In addition, our results show that direct experience is endogenously determined; but controlling for the endogeneity has a marginal effect on WTP estimates.     

Bayesian Conjoint Choice Designs for Measuring Willingness to Pay

In this paper, we propose a new criterion for selecting efficient conjoint choice designs when the interest is in quantifying willingness to pay (WTP). The new criterion, which we call the WTP-optimality criterion, is based on the c-optimality criterion which is often used in the optimal experimental design literature. We use a simulation study to evaluate the designs generated using the WTP-optimality criterion and discuss the design of a real-life conjoint experiment from the literature. The results show that the new criterion leads to designs that yield more precise estimates of the WTP than Bayesian D-optimal conjoint choice designs, which are increasingly being seen as the state-of-the-art designs for conjoint choice studies, and to a substantial reduction in the occurrence of unrealistically high WTP estimates.     

WILLINGNESS TO PAY FOR AIR QUALITY: THE CASE OF OUTDOOR EXERCISE

This study uses a contingent valuation (CV) survey to establish a sample of outdoor exercisers' willingness to pay (WTP) for ambient air quality improvements in East Baton Rouge parish, Louisiana. Estimated annual median and mean WTP values are £95 and £191, respectively, per person per year for assurance that ozone levels would not become "unhealthful" on any day. The survey informed respondents that in the prior year the local community experienced 14 days on which ozone levels exceeded federal standards. The study makes the strong assumptions that respondents believed they were "buying" 14 more healthy days and that WTP per day "bought" is constant. Given these assumptions, one can scale this WTP response to represent annual medians and means of approximately £7 and £14 per person per day, respectively. An econometric procedure for generalizing the community's annual WTP to avoid the 14 unhealthful days yields estimates ranging from £3.21 and £5.36 per person per healthy day, or between £12.4 and £20.6 million per year. The unit day estimates are comparable to CV and household production finction estimates of WTP in the Los Angeles basin, suggesting their usefulness for benefits transfer .     

Altruistic, egoistic and biospheric values in willingness to pay (WTP) for wildlife

We attempt to measure general attitudes and ethical beliefs towards preservation, as well as the importance of each of the three considered value orientations (biospheric, egoistic and altruistic) in WTP estimates. In the present study, we apply the GAC scale to a contingent valuation exercise for the recovery of the common murre (Uria aalge) in Galicia (Spain). Up to now, only a few studies in the field of environmental and ecological economics have analyzed value orientations under the Environmental Concern (EC) framework, obtaining mixed results. In the present work, we conclude that ethical aspects affect the individuals decision making process, and that value orientations play an important role in the pro-environmental attitude formation. These value orientations affect willingness to pay (WTP) estimates for environmental goods.     

森林资源生态价值支付意愿的实证分析——以“京津唐—承”区域为例

本文针对我国河北省承德市森林资源,以"京津唐—承"区域为研究对象,通过建立多元线性回归模型,分析了影响居民对森林资源生态价值支付意愿的诸多因素,并根据平均支付意愿对承德市森林资源生态价值及相关方的受益大小进行了估算。结果表明,承德市森林资源生态价值为163.27亿元,其中森林资源所在地承德市受益17.92亿元,占10.98%,周边区域京津唐3市受益145.35亿元,占89.02%。在众多因素中,收入、居住地以及对森林资源重要性的认识程度是影响居民对森林资源生态价值支付意愿大小的主要因素。     

Altruistic,egoistic and biospheric values in willingness to pay (WTP) for wildlife

We attempt to measure general attitudes and ethical beliefs towards preservation, as well as the importance of each of the three considered value orientations (biospheric, egoistic and altruistic) in WTP estimates. In the present study, we apply the GAC scale to a contingent valuation exercise for the recovery of the common murre (Uria aalge) in Galicia (Spain). Up to now, only a few studies in the field of environmental and ecological economics have analyzed value orientations under the Environmental Concern (EC) framework, obtaining mixed results. In the present work, we conclude that ethical aspects affect the individuals decision making process, and that value orientations play an important role in the pro-environmental attitude formation. These value orientations affect willingness to pay (WTP) estimates for environmental goods.     

Willingness to Pay and Sensitivity to Time Framing: A Theoretical Analysis and an Application on Car Safety

Stated preference (SP) surveys attempt to obtain monetary values for non-market goods that reflect individuals’ “true” preferences. Numerous empirical studies suggest that monetary values from SP studies are sensitive to survey design and so may not reflect respondents’ true preferences. This study examines the effect of time framing on respondents’ willingness to pay (WTP) for car safety. We explore how WTP per unit risk reduction depends on the time period over which respondents pay and face reduced risk in a theoretical model and by using data from a Swedish contingent valuation survey. Our theoretical model predicts the effect to be nontrivial in many scenarios used in empirical applications. In our empirical analysis we examine the sensitivity of WTP to an annual and a monthly scenario. Our theoretical model predicts the effect from the time framing to be negligible, but the empirical estimates from the annual scenario are about 70 % higher than estimates from the monthly scenario.     

Willingness to Pay for Car Safety: Evidence from Sweden

This study estimates a marginal willingness to pay (WTP) function for a road-mortality risk reduction. Observed marginal WTP from the Swedish car market is used and found to be positively correlated with the baseline risk of the cars. No statistically significant relationships between examined owner attributes, e.g. wealth and background risk, and marginal WTP are found. When comparing the estimated monetary value of a non-marginal risk reduction derived from the integral of the marginal WTP-function with an estimate based on marginal WTP we find, in line with expectations, that the difference between the estimates is negligible for smaller risk reductions and small, 4–10%, also for relatively large risk reductions.      

Using structural restrictions to achieve theoretical consistency in benefit transfers

Analysts often extrapolate estimates of the value of environmental improvements reported in prior studies to evaluate new policy proposals, a practice sometimes referred to as “benefit transfer.” Benefit transfer functions are frequently specified based on statistical considerations alone. However, such a purely statistical approach can lead to willingness-to-pay functions that fail to satisfy some aspects of theoretical consistency that may be especially important for policy evaluations. In this paper, we examine several previous meta-analyses of nonmarket valuation studies in light of the adding-up condition, which is one important aspect of theoretical validity. We then use meta-regression to estimate a new willingness-to-pay function for surface water quality improvements intended to be used for benefit transfers. We estimate the meta-regression model using summary results from 51 previously published stated preference studies. An important feature of our approach is that we develop the meta-regression estimating equation to ensure that the resulting benefit transfer function will necessarily comply with the adding-up condition. This is achieved by first specifying a marginal willingness-to-pay function and then deriving an expression for total willingness-to-pay. This leads to a non-linear estimating equation, so we estimate the parameters of the model using non-linear least squares. We discuss the advantages and disadvantages of our approach relative to other structural approaches, and we compare our empirical results to a more traditional nonstructural meta-regression model. Finally, we examine the quantitative importance of imposing the adding-up condition in our case study by performing some illustrative calculations of willingness-to-pay for hypothetical water quality improvements using both structural and non-structural models.     

Exploring Benefit Transfer: Disamenities of Waste Transfer Stations

The benefit transfer method was developed as an alternative way to value externalities using values from studies of similar circumstances, carried out at similar sites somewhere else, given the challenges and high costs inherent in assessing the actual cost. Specifically, in order to test the performance of the benefit transfer method, employing hedonic price models, this study focused on estimates of disamenities associated with waste transfer stations at four different cities in Israel. The sites were intentionally selected to represent a variety of circumstances. We transferred the estimated benefit function from a “study site” to a “policy site”. The goodness of fit was examined by comparing the calculated value, with actual data from the policy site. To test the sensitivity of the benefit transfer function to socioeconomic and housing characteristics, it was repeatedly applied to different sets of observations. The findings suggest that a relatively large number of alternative benefit functions are transferable. Statistical inequality outcome regarding the degree of similarity between samples does not unequivocally rule out the appropriateness of transferring environmental values across studies. Transfer errors varied between −21% and +29%, and the absolute average error for all transfers was 15.4%. Errors were lower for transfer between relatively similar cities in terms of size and location and between sub-samples that were similar in socioeconomic characteristics and housing type. However, when a site with very dissimilar data was involved, the average absolute error rose to 19%.     

The value of online banking to small and medium-sized enterprises: evidence from firms operating in the uae free trade zones

This study estimates the willingness to pay of small and medium-sized enterprises (SMEs) for a business online banking services. The estimation utilizes a contingent valuation method employing data from 400 SMEs in the United Arab Emirates free zones. An interval regression model is used to identify company characteristics affecting WTP. The results indicate an average WTP for online banking of $518.50 per month. Firms engaging in international trade value these services at least 10% more than those with only domestic operations. Other variables that significantly affect WTP include number of employees and the transportation cost of using traditional branch banking.     

Adjusting for Cultural Differences in International Benefit Transfer

Values for non-market goods can be expected to be sensitive to variations in the cultural contexts of beneficiaries. However, little progress has been made to date in adapting benefit transfer (BT) procedures for cultural variations. Using information from a study that ranked 62 societies with respect to nine attributes of their cultures, we develop an index that is then used to re-weight multiple coastal ecosystem service value estimates. We examine whether these culturally-adjusted BT estimates are statistically different than simply transferring the income-adjusted mean transfer estimates for each coastal ecosystem service from international study sites to the policy site. We find that once differences in income levels have been accounted for, the differences in cultural dimensions between study and policy sites actually have little impact on the magnitude of our transfer estimates. This is not a surprising result given that the majority of the study site estimates are derived from countries that share many ethnic, linguistic and other cultural similarities to the policy site. However, benefit adjustments based on cultural factors could have a much higher impacts in settings different to that investigated here.     

Economic valuation of habitat defragmentation: A study of the Veluwe, the Netherlands

This paper offers an economic value assessment of a nature protection programme in the Veluwe, the Netherlands. This programme involves two defragmentation scenarios: the first scenario connects the central part of the Veluwe with river forelands in a north-eastern direction (i.e. the meadows of the IJssel river), while the second scenario is focussed on defragmentation in a south-western direction (i.e. the meadows of the Rhine river). The valuation is based on a questionnaire that was administered during face-to-face interviews in the area and through the Internet. We employ a contingent valuation approach to assess the respondents' willingness to pay for the realisation of the defragmentation scenarios. It appears that the mean willingness to pay (WTP) for the two defragmentation scenarios is € 162.2 (lognormal distribution) per respondent. Because the Veluwe is considered a nature park of national importance, we performed an aggregation of individual WTP estimates over Dutch households. With the resulting aggregate estimates we can compare the total costs and benefits of the two scenarios for habitat defragmentation in the Veluwe. In addition, we test whether respondents value the two scenarios equally. We also check whether the methods of data collection (face-to-face interviews and Internet questionnaires) have distinct influences on the stated WTP responses.     

The Effect of Risk Context on the Value of a Statistical Life: a Bayesian Meta-model

This paper presents the first value of statistical life (VSL) meta-analysis that empirically estimates correction factors for ‘out of context’ benefits transfer (BT) purposes. In the field of mortality risk reductions elicited willingness to pay values in one risk context, say road safety, are frequently applied in other risk contexts like air pollution. However, differences in risk perception and the population at risk across contexts are likely to result in diverging VSL estimates. In a meta-analysis of 26 international stated preference studies, a Bayesian model is estimated regressing contingent values for mortality risk reductions, originating from three different risk contexts, on the characteristics of the risk reduction itself and additional variables characterizing the underlying studies. A willingness to pay (WTP) premium for mortality risk reductions in the air pollution and general mortality risk context relative to improving road safety is observed. Evaluated at the mean, road safety VSL estimates should be multiplied by a factor 1.8 before being applicable in the air pollution context. Moreover, in an illustrative BT exercise we find limited overlap in the set of context specific predictive VSL distributions. Consequently, ‘out of context’ BT results in a substantial over- or underestimation of the VSL.     

The Economic Value of Air-Pollution-Related Health Risks in China: A Contingent Valuation Study

The economic value of preventing adverse health effects related to air pollution is estimated using contingent valuation in three diverse locations in China. Values are estimated for three health endpoints: cold, chronic bronchitis, and fatality. Alternative statistical models are tested to study their impact on estimated willingness to pay (WTP) and on the relationship between WTP and respondent characteristics. Using the official exchange rate, the sample-average median WTP to prevent an episode of cold ranges between US$3 and US$6, the WTP to prevent a statistical case of chronic bronchitis ranges between US$500 and US$1,000, and the value per statistical life ranges between US$4,000 and US$17,000. Estimated mean values are between two and thirteen times larger. Our estimates are between about 10 and 1,000 times smaller than estimates for the US and Taiwan using official exchange rates. Indoor air quality, measured for a subset of respondents, shows no consistent relationship with WTP.