Choice Modeling and Tests of Benefit Transfer

Benefit transfer is increasingly being used by decision makers as a way of estimating environmental values suitable for use in benefit cost analysis. However, recent studies examining the validity of benefit transfer of passive use values estimated using contingent valuation have rejected the hypothesis of convergent validity. In this article, we demonstrate the usage of a form of conjoint analysis known as choice modeling for benefit transfer. Choice modeling has been touted as being particularly suitable for benefit transfer because it is possible to allow for differences in environmental quality and socioeconomic characteristics when transferring benefit estimates. We demonstrate that choice modeling is suitable for benefit transfer, particularly when the transfers involve implicit prices. Second, we examine the circumstances in which benefit transfer of choice modeling derived value estimates is likely to be most valid. Two split sample tests were undertaken to achieve this objective. The evidence from these tests indicates that transfers across different case study sites are likely to be subject to less error than those across different populations.     

Improving value transfer through socio‐economic adjustments in a multicountry choice experiment of water conservation alternatives

This study tests the transferability of the nonmarket values of water conservation for domestic and environmental purposes across three south European countries and Australia applying a common choice experiment design. Different approaches are followed to test the transferability of the estimated values, aiming to minimise transfer errors for use in policy analysis, comparing both single‐ and multicountry transfers, with and without socio‐economic adjustments. Within Europe, significant differences are found between implicit prices for environmental water use, but not for domestic water use. In the Australian case study, alleviating restrictions on domestic water use has no significant value. Pooling the three European samples improves the transferability of the environmental flow values between Europe and Australia. Results show that a reduction in transfer error is achieved when controlling for unobserved and observed preference heterogeneity in the single‐ and multicountry transfers, providing additional support for the superiority of socio‐economic adjustment procedures in value transfer.     

Testing for differences in benefit transfer values between state and regional frameworks

Policy makers are often interested in transferring non-market estimates of environmental values from a 'source' study to predict economic values at a 'target' site. While most applications of the benefit transfer process involve an opportunistic search for suitable source studies, there are some examples available of more systematic approaches to developing a framework of values for benefit transfer processes. A key issue in developing such a framework is to deal with adjustment factors, where value estimates might vary systematically according to the context of the trade-offs. Previous research has identified that large differences in scope, such as between national and regional contexts, do affect values and hence benefit transfer. The research reported in this paper indicates that such differences are not significant for smaller scope variations, such as between state and regional contexts. These results provide some promise that systematic databases for benefit transfer can be developed.     

Towards the development of a transferable set of value estimates for environmental attributes

Estimates of environmental values are frequently required as inputs to cost-benefit analyses when evaluating alternative options for managing natural resources. One strategy to avoid the high cost of conducting empirical work when non-market values are involved is to use value estimates from an existing source study and to transfer them to the target context of interest (a practice known as benefit transfer). However, the transfer of values is subject to a host of potential errors and could lead to significant overestimation or underestimation of welfare change. The present paper reports the results of a choice modelling study in which household values for the impacts of land and water degradation in Australia are estimated. A key objective of the present study was to test the validity of transferring estimates derived in a national context to different regional contexts. On the basis of these test results, inferences are made about the impact that differing contexts have on value estimates. The scale of value differences across the different contexts provides a guide for calibrating benefit transfer estimates.     

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.     

Using choice experiments to value catchment and estuary health in Tasmania with individual preference heterogeneity*

Choice experiments (CE) have become widespread as an approach to environmental valuation in both Australia and overseas. However, there are few valuation studies that have addressed natural resource management (NRM) changes in Tasmania. Furthermore, few studies have focussed on the estimation of estuary values. The CE study described in this paper aims to analyse community preferences for NRM options in the George catchment, Tasmania. Catchment health attributes were: the length of native riverside vegetation; the number of rare native animal and plant species in the George catchment; and area of healthy seagrass beds in the Georges Bay, which was used as a measure of estuary condition. Mixed logit models with interactions between socio‐economic variables and the choice attributes were estimated to account for systematic and random taste heterogeneity across respondents. Results reveal considerable variation in preferences towards the attributes and show that value estimates are significantly impacted by the way in which we account for preference heterogeneity. Preference heterogeneity thus needs to be considered when estimating community willingness‐to‐pay for environmental changes. This study further shows little responsiveness to the presented changes in estuary seagrass area.     

Public preferences for post 2020 agri-environmental policy in the Czech Republic: A choice experiment approach

In November 2017 European Union commission presented a communication report summarizing the reform proposal of the post 2020 Common Agriculture Policy (CAP). The reform aims to address the environmental degradation associated with agricultural production as well as change in the structure of CAP payments. To this end, the Ministry of Agriculture in Czech Republic is preparing to set its priorities towards CAP’s reform. In this study we applied a choice experiment to investigate the public preferences for a set of environmental goods and services delivered by agri-environment-climatic voluntary measures (AECMs). A mixed logit model is employed to elicit preferences and explore their heterogeneity. We find that respondents oppose strongly funding removal. Among environmental attributes, water and food quality are the ones with the highest implicit marginal willingness-to-pay values. Preferences for no funding option are heterogeneous with socio-demographic and attitudinal variables explaining some sources of this heterogeneity. A continuation of national funding for the AECMs is expected to lead to a better state of environment with an anticipated positive welfare change of 669–932 mil EUR as opposed to funding removal. The change reflects the estimated welfare change resulting from moving from a low to a medium or to a high preservation state of agri-environmental attributes. We also project the budget change for AECMs considering the level of national funding and given the transfer share between Pillar I and II. Based on our results, we suggest that national funding can be informed by the welfare change scenarios and transfer shares are projected accordingly.     

Contingent Valuation Versus Choice Experiments: Estimating the Benefits of Environmentally Sensitive Areas in Scotland

This paper reports results from a study of the economic value of the conservation benefits of Environmentally Sensitive Areas (ESAs) in Scotland. The main novelty of the approach taken is in comparing two direct valuation methods, namely contingent valuation and choice experiments, to value these benefits. The Contingent Valuation Method (CVM) is well-established as a technique for valuing the sorts of landscape and wildlife enhancements associated with ESAs. The CVM experiment reported here uses a dichotomous choice format, and includes a new correction for part-whole bias. Choice experiments are much less used as an environmental valuation technique. We note several advantages of such experiments over CVM, and then report characteristic values and ‘programme values’ estimated using the method. This application brings to light some problems in applying the choice experiment method. Finally, we discuss the issue of benefits transfer in the context of these two approaches to valuation.     

Exploring customer heterogeneity with a scale-extended latent class choice model: Experimental evidence drawn from urban water users

The search for improved water pricing is central to urban water reform in many countries. Establishing efficient water prices is notoriously difficult, not least because different customers have different demands for water and yet they are presently faced with a one-size-fits-all approach to pricing and service. This is especially challenging where water availability fluctuates widely, as is the case in many parts of Australia, because the impacts of exposure to episodic periods of scarcity can differ markedly. There is now substantial interest in the notion of ‘unbundling’ the water product to provide a better fit between customers' preferences and the level of service received. Following this trend, this study provides important insights into householders' willingness to pay for a range of flexible water options using a choice experiment. The paper reports a relatively underemployed extension to the latent class modelling framework to investigate preference heterogeneity towards urban water products, including purchasing services that involve the provision of environmental and amenity outcomes. The work adds to studies that use choice data to reveal heterogeneity while improving our understanding of household customers' demands. Overall, it also brings into focus questions about the future management of water in urban contexts.     

环渤海地区农业绿色发展水平评价与区域差异分析

[目的]科学评价农业绿色发展水平,测度环渤海地区农业绿色发展区域异质性,厘清农业绿色发展关键路径,对促进该地区农业高质量发展具有重要意义。[方法]文章以环渤海地区4省2市1区为研究对象,构建农业绿色发展评价指标体系,采用熵权法测度农业绿色发展水平,综合运用耦合协调度模型和变异系数法解析该地区农业绿色发展空间异质性特征。[结果]（1）环渤海地区农业绿色发展水平整体呈现递增态势,其中产出效益变化显著;（2）对比2005和2019年,环渤海地区4省2市1区农业绿色发展路径具有典型区域差异性：2005年京晋和内蒙古资源节约表现显著,津冀辽鲁环境友好表现显著;而2019年京产出效益表现显著,津鲁辽冀环境友好表现显著,晋和内蒙古资源节约表现显著。（3） 2005—2019年环渤海地区4省2市1区农业绿色发展耦合协调度呈现上升趋势,但处于低度耦合协调阶段,耦合协调度变异系数呈现下降趋势,农业绿色发展区域差异性逐渐降低。[结论]资源节约与环境友好层面是推进环渤海地区农业绿色发展的重点方向,制定差异化区域发展战略,加强区域间联系,发挥京津城市辐射效应,缩小区域之间差异,促进环渤海地区绿色农业的协调发展。     

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.     

土地利用经济效益耦合协调度及空间差异研究——以京津冀地区为例

[目的]以土地投入、产出为基础,分析京津冀地区13个城市的土地利用经济效益的空间相关性和异质性,为土地利用方式的调整提供科学参考。[方法]通过构建土地利用经济效益指标体系,运用熵值法测算土地利用经济效益值,并通过耦合协调度模型和空间分析法对京津冀土地利用经济效益空间差异进行了初步探讨。[结果](1)京津冀整体土地利用经济效益耦合协调度较低,耦合协调平均值为0.425,属于濒临失调衰退类型,并且各城市之间发展不平衡;(2)京津冀地区土地利用经济效益全局空间自相关指数Moran's I为0.217 928,表现出显著的空间集聚形态;(3)京津冀地区土地利用经济效益空间差异主要受区位优势、产业结构等影响,京津冀3地仅有北京、天津2个城市处于协调发展状态,河北省整体都处于失调衰退状态。[结论]根据区域土地利用经济效益的空间分异特点,应制定差异化策略,从而提高土地利用经济效益。     

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.     

Consistent Estimation of Censored Demand Systems Using Panel Data

We derive a joint continuous/censored commodity demand system for panel data applications. Unobserved heterogeneity is controlled for using a correlated random effects specification and a generalized method of moments framework used to estimate the model. While relatively small differences in elasticity estimates are found between a flexible random effects specification and one that restricts the random effect coefficient to be time invariant, larger differences are observed when comparing the flexible model to a pooled cross-sectional estimator. The results suggest the limited ability of such estimators to control for preference heterogeneity and unit-value endogeneity leads to parameter bias.     

江苏省水污染、环境规制与高质量经济发展

利用江苏省2005—2017年的面板数据,研究水污染、环境规制与高质量经济发展之间的关系。首先采用熵权法构建高质量经济发展评价体系;其次采用SYS-GMM法构建基准回归模型;接着以水污染为门槛变量,研究水污染不同程度下,水环境规制对经济发展的效应;最后,从苏南、苏中、苏北3个区域出发研究水环境污染的空间异质性。研究结果表明:水污染对经济发展质量产生负向效应。江苏省的水环境规制总体上看对经济发展质量产生制约作用。随着水污染程度的加重,环境规制对经济发展质量的抑制作用将逐渐减弱。江苏省三大区域的水污染、环境规制对经济发展质量的影响具有空间异质性。     

Investigating Preferences for the Local Delivery of Agri‐environment Benefits

Since 2005, Environmental Stewardship (ES) has been the principal agri‐environment scheme for England and is the key instrument for the delivery of increased environmental benefits from agricultural landscapes. The main objective of this study is to investigate the hypothesis that individuals have greater relative preferences for the environmental benefits associated with agri‐environment schemes when they are delivered within those landscapes closest to where they live. A choice experiment approach based on a national survey provides the data and a mixed logit approach is used to model relative preferences for the environmental benefits of ES across five generic landscape types. Results show that most respondents have a preference for benefits delivered in those areas closest and most accessible to where they live.     

A meta-regression analysis on the willingness-to-pay for country-of-origin labelling

Food quality and food safety issues arouse increasing interest and concern among consumers and policy-makers. Consequently, the importance of country-of-origin labelling (COOL) is increasing in business, policy and research. Numerous studies have reported a wide range of estimates for consumers' willingness-to-pay (WTP) for COOL using stated preference methods and, in particular, discrete choice experiments. We apply meta-regression analyses to synthesise the heterogeneous results of 204 WTP for COOL estimates extracted from 59 studies which used discrete choice experiments and were published between 2009 and 2020. Meta-regression analysis allows an adjusted summary proxy to be derived for the WTP for COOL and the determinants of heterogeneity in reported WTP estimates are also investigated. Our results suggest that there is a significant positive WTP for COOL, and also reveal that the reported WTP estimates are unaffected by publication bias. In addition, they show systematic variation in WTP estimates across the context and methodological characteristics of the studies. More precisely, we find that the region and the product (animal- vs. plant-based) analysed, as well as certain characteristics of the choice design (e.g., the number of attributes used, or the inclusion of an opt-out option) can have a significant impact on the estimated WTP for COOL. Finally, our results reveal significant differences in price premiums between various types of COOL (e.g., domestic vs. foreign). This highlights that results from individual primary studies should not be generalised without further consideration of the underlying study design.     

Economics of new technologies for sustainable agriculture

Sustainable agriculture is prescribed as a policy approach that maximizes economic benefits while maintaining environmental quality. It is argued that this approach is human capital–intensive and encourages new scientific developments. To attain sustainability, economic incentives for the development and adoption of precision technologies (with minimal residues that cause environmental damage) have to be developed. Taxation and tradeable permits are desirable policies to attain first–best solutions; however, when heterogeneity and lack–of–information problems are significant, alternative institutions have to be developed. The paper presents and discusses such institutions.     

Valuing New South Wales rivers for use in benefit transfer

The results from seven choice modelling applications designed to value improved river health in New South Wales are reported. These applications were designed to provide value estimates that could be used, through benefit transfer, to value improvements in the health of other rivers within the state. Because of limitations on the number of rivers that could be valued and populations sampled, a pooled model for use in benefit transfer was also estimated. The results indicate that both use and non-use values were found to exist for all catchments. In addition, value estimates were found to differ across catchments when populations resident within catchments were sampled. However, when populations resident outside catchments were sampled for two of these catchments, value estimates were found to be statistically similar. This indicates the importance of valuing improved river health in specific catchments by sampling populations within catchments. Yet, it also indicates that it is less critical to conduct multiple surveys of residents outside catchments to value improved river health.     

Choice experiment,multiple programmes contingent valuation and landscape preferences: How can we support the land use decision making process?

The promotion of cost–benefit analysis for social and environmental policy choices is much debated. Then, the conception of a valuation method for the non-market benefit of these policies is still of a main research interest. Among direct valuation methods, the choice experiment method (CEM) becomes a highly attractive valuation procedure, in giving at the same time the economic value of the impacts of the different components of the policy as well as the global impact of a policy package. However, the main-effect designed protocol aiming to limit the cognitive burden of scenarios’ evaluation disregards the important question of the existence of substitution or complementary relation between these programmes for their main beneficiaries. Furthermore, the independent valuation and summation strategy developed in CEM opens to overvaluation or under valuation of the willingness to pay values. The aim of this article is to conduct testing of the additivity bias with CEM results. The distribution of the willingness to pay values for possible combinations of landscape programmes aiming to maintain two agricultural landscape attributes as well as one moorland attribute inferred from the earlier CEM survey is compared to results obtained with the sequential contingent valuation procedure for multidimensional policy suggested by Hoehn (1991). Our empirical results suggest that the additivity bias is not statistically significant in our case, even if specific relation between landscape attributes due to what we call the composition effect is of concern for the population we interviewed. Furthermore, landscape preferences derived from our empirical investigation support the need for more integration of agricultural issues with the local land-use issues.