Consumer attitudes toward low stake risk in food markets

Consistency of quality is viewed as important for producers of consumer goods. However, there is no literature testing the importance of quality consistency on consumers’ willingness to pay for consumer goods. We use an experimental auction market to investigate how inconsistency in tenderness affects consumers’ willingness to pay for beef. We find that most consumers are risk averse with respect to sensory quality. Both the average tenderness and the variance of tenderness affected the consumers’ willingness to pay for beef. Reducing the uncertainty of the sensory quality by categorizing the beef into three tenderness classes increased the total value of the beef by 8%.     

The Willingness to Accept Value of Statistical Life Relative to the Willingness to Pay Value: Evidence and Policy Implications

Large disparities between willingness to accept (WTA) and willingness to pay (WTP) based values of statistical life are commonly encountered in empirical studies. Standard economic theory suggests that if a public good is easily substitutable there should be no marked disparity between WTA and WTP values for the good, though the disparity increases with reduced substitutability. However, psychologists have shown that people often treat gains and losses asymmetrically and tend to require a substantially larger increase in wealth to compensate for a loss than the amount they would be willing to pay for an equivalent gain. Although most transport projects may aim to improve safety, situations arise when a relaxation of an existing regulation saves resources but increases the risk of death and injuries. A survey was recently carried out in New Zealand to determine people’s willingness to pay to reduce road risks and their willingness to accept compensation for an increase in risk. This paper reports the disparity observed between the two measures and considers some of the problems posed for policymakers.     

The willingness to pay for mortality risk reductions in Mongolia

This paper reports results from a stated preference survey designed to estimate the willingness to pay for mortality risk reductions in Ulaanbaatar, Mongolia. The survey includes both contemporaneous and latent risk reductions of a magnitude typically achievable through clean air policy. The study is one of a series of national studies designed to provide comparable estimates around the world. One goal of this series is to build a more solid bridge for benefits transfer between developed and developing countries. The survey was conducted in winter 2010. Estimates of willingness to pay passed external and internal scope tests. Study results imply a value of statistical life of approximately $500,000 (based on a purchasing power parity exchange rate) for a contemporaneous 5-in-10,000 annual risk reduction.     

On the Interaction of Risk and Time Preferences: An Experimental Study

Experimental studies of risk and time preference typically focus on one of the two phenomena. The goal of this paper is to investigate the (possible) correlation between subjects' attitude to risk and their time preference. For this sake we ask 61 subjects to price a simple lottery in three different scenarios. At the first, the lottery premium is paid 'now'. At the second, it is paid 'later'. At the third, it is paid 'even later'. By comparing the certainty equivalents offered by the subjects for the three lotteries, we test how time and risk preferences are interrelated. Since the time interval between 'now' and 'later' is the same as between 'later' and 'even later', we also test the hypothesis of hyperbolic discounting. The main result is a statistically significant negative correlation between subjects' degrees of risk aversion and their (implicit) discount factors. Moreover, we show that the negative correlation is independent of the method used to elicit certainty equivalents (willingness to pay versus willingness to accept).     

WTP- and QALY-Based Approaches to Valuing Health for Policy: Common Ground and Disputed Territory

This paper discusses links between two approaches to the value of health: the willingness to pay approach of environmental economics and the quality-adjusted life year approach of health economics. The approaches are used in cost-benefit and cost-effectiveness analyses of health interventions. Despite fundamental differences in the decision contexts and conceptual foundations of the two approaches, in current practice they are likely to lead to similar policy decisions. The paper also shows how research on the quality-adjusted life year (QALY) can be used to fill in gaps in the willingness to pay literature. The paper sketches a simple model that shows how to ``QALY-fy the value of a statistical life;' i.e., how to combine QALY estimates with estimates of the value of a statistical life to estimate willingness to pay for morbidity risks.Presented at the workshop “Economic Valuation of Health for Environmental Policy: Assessing Alternative Approaches," March 18–19, 2002, Orlando, Florida. I thank Glenn Blomquist, Mark Dickie, John Mullahy, Gary Zarkin and two anonymous referees for useful comments. All remaining errors are my own responsibility.     

Temporal insensitivity of willingness to pay and implied discount rates

A number of studies have defined and tested the temporal sensitivity of willingness to pay to payment schemes and the resulting implied discount rates for environmental projects. We demonstrate that those studies have imposed restrictive assumptions on the structure of the willingness to pay function and the underlying decision process. We investigate the temporal sensitivity of willingness to pay using a new temporal willingness to pay function applied to a proposed oyster reef restoration program. We find that (1) holding the length of the project constant, the temporal willingness to pay for the project is the same across different payment schemes, (2) temporal willingness to pay does not vary significantly across projects of varying lengths, and (3) estimated discount rates are low relative to previous studies, but vary significantly across payment schemes and project lengths.     

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.     

农户对新农合的需求研究:一个分析框架

对农民新农合的需求作了框架性研究。运用线形扩展支出模型定量分析了农民的支付能力。农村贫困人群确实存在支付能力问题。政府应对贫困人群的合作医疗筹资给予更大的支持力度。对于绝大数农民, 关键不在于支付能力, 而在于支付意愿。对农民的支付意愿构建了国家、社区、家庭和个人的四维解释框架。在国家层面, 影响因素主要是对政府的信任程度、政府的"机构能力"以及补贴的力度大小;在社区层面, 社会资本在社区健康融资中发挥着重要作用;家庭对合作医疗的支付意愿主要取决于其对参与的成本和收益的比较, 同时, 家庭成员内部风险分担机制和家庭之间风险分担机制也会对家庭的支付意愿产生影响。支付意愿还和农民的个人特征相关。     

Household willingness to pay and income pooling: A comment

We demonstrate some problems with Munro 2005 (“Household willingness to pay equals individual willingness to pay if and only if the household income pools”, Economics Letters 88, 227-230). Furthermore, we reconsider income pooling in a slightly changed framework and prove: Income pooling implies that household willingness to pay is equal to minimal individual willingness to pay. The converse is not true.     

住宅智能化、消费者异质性与支付意愿——基于技术接受模型的实证分析

智能时代的到来使得智能化新产品成为人们广泛关注的焦点,住宅产业也在经历智能化的转变。本文从消费者的角度,基于技术接受模型(TAM),构建了住宅智能化对于消费者支付意愿的影响模型并对其进行实证研究。研究结果表明：住宅智能化能够通过满足消费者对住宅功能的需求进而提升消费者的支付意愿,消费者异质性对智能化住宅和支付意愿的关系具有调节作用。年轻群体和低收入群体更关注智能化住宅的基本居住功能和生活品质功能;未婚消费者更关注智能化住宅的生活品质功能,已婚群体对住宅智能化的支付意愿更高;低收入群体相比高收入群体对住宅智能化的支付意愿更高;高教育配套需求者、有会所需求和有装修需求的消费者对住宅智能化的支付意愿更强烈。     

Actual averting expenditure versus stated willingness to pay

The purpose of this study is to perform a complete comparison of actual averting expenditure and stated willingness to pay measures, and to determine if the averting expenditure is a lower bound of the willingness to pay measured from contingent valuation experiment as suggested by literature. In addition to the single value comparison, Bootstrap, Krinsky and Robb, Jackknife, and Cameron are four simulation methods used to calculate confidence intervals for response function. Sample sizes of 100, 200, and 1000 are simulated 100 and 200 times respectively. A set of data with 540 households from a contingent policy referendum survey is employed for our purpose. Under a specific level of BOD improvement, a one-to-one single mean value comparison of the actual averting expenditure is greater than the mean willingness to pay from utility difference model. The empirical results are consistent with the theoretical expectation for expenditure difference that averting expenditure is a lower bound of willingness to pay generated from the contingent valuation method. A confidence interval, which contains the true mean willingness to pay at least 90% of the times, includes the actual averting expenditure as a lower bound of the mean willingness to pay as theory predicts.     

Using contingent valuation to elicit public preferences for water fluoridation

The methods and results of a contingent valuation survey to elicit public preferences for water fluoridation are reported. The study demonstrates that not only is it important to acknowledge that there will be losers from the introduction of such a programme but that losers must be allowed to express a value for the magnitude of their perceived loss. Two methods of valuing this loss are explored. Conventional willingness to accept compensation questions are compared with questions in which losers are asked to state their willingness to pay to prevent their water being fluoridated. The results provide tentative support for asking willingness to pay to prevent questions instead of willingness to accept questions when evaluating certain types of public good. The issue of protest responses in contingent valuation surveys is also highlighted and discussed.     

Respondent uncertainty in a contingent market for carbon offsets

The main objective of this paper is to provide additional empirical evidence of what explains respondent uncertainty in contingent valuation (CV) and how this in turn affects stated willingness to pay (WTP). Air travelers asked to pay a carbon travel tax to offset carbon emissions from flying were asked how likely it is that they will actually pay if the tax is voluntary. When changing the market compliance imperative from a mandatory carbon tax to a voluntary contribution, a third of all air travelers consider it unlikely they will actually pay their stated WTP amount. An ordered probit estimation approach is applied to identify the sources of respondent uncertainty. Besides the bid price, respondent sense of responsibility and belief in the effectiveness of the voluntary carbon market are among the main reasons for the experienced uncertainty.     

城镇消费者对有机农产品的购买意愿分析——以有机大米消费为研究对象

基于对北京市、武汉市城镇消费者对有机大米的消费行为调查,分析了有机农产品溢价购买意愿和边际购买意愿。运用联合分析法研究发现,当前消费者对有机农产品的溢价购买意愿倾向比较低,但边际购买意愿较高,价格过高限制了有机农产品的推广。另外,消费者对有机农产品的认知水平、品牌因素对消费者购买意愿有着重要的影响作用。     

Using Choice Experiments to Value the Natura 2000 Nature Conservation Programs in Finland

This paper is concerned with the preferences of the Finnish households for a controversial nature conservation program – the European Union's Natura 2000 Network. Since the program was mainly based on biological considerations, it met strong public opinions from different interest groups in Finland. Using the choice experimental method, we attempt to estimate the values that the Finnish households would place on different preservation levels. It is found that the mean willingness to accept for a decrease in the nature preservation area is much greater than the mean willingness to pay for an increase by the same amount. Also, the marginal willingness to pay becomes zero after an initial increase in the natural preservation area, which is consistent with our earlier findings in a binary choice valuation study. Policy implications of these results are also discussed in relation to different decision criteria.     

A Discriminatory Mechanism to Reduce Urban Congestion

In this article, we propose an optimal mechanism to reduce congestion when information is asymmetric. Each car driver receives a quantity of traffic rights such that his adjusted marginal benefit is equal to the marginal cost of congestion and payments are based on willingness to pay. We show that the level of congestion achieved is lower and each car user can receive more or fewer rights than under complete information. With symmetric beliefs, the payment rule results from a second‐degree price discrimination. When beliefs are asymmetric, it results simultaneously from a second‐degree price discrimination and from a third‐degree price discrimination and high willingness‐to‐pay car users are discriminated against. The revenue raised can be used to reduce distortionary taxes, thereby gaining public acceptability.     

Who would pay more for a fragrance-free laundry detergent? How health information affects valuation

Fragrance allergy is a lifelong condition, and the probability of being affected increases with frequent exposure to fragrance. Currently, fragrance-free laundry detergents are not common in supermarkets. We used a contingent valuation among Austrian consumers in a within-respondent treatment to estimate how willingness to pay is influenced by health information. We found that higher income groups have a higher willingness to pay for fragrance-free detergents. Informing consumers about health impacts substantially increases this difference. Our simulation shows that lower-income groups benefit from health information only if low-priced fragrance-free detergents are available on the market.     

Willingness to pay for a Green Energy program: A comparison of ex-ante and ex-post hypothetical bias mitigation approaches

The most persistently troubling empirical result in the contingent valuation method literature is the tendency for hypothetical willingness to pay to overestimate real willingness to pay. Two approaches, ex-ante and ex-post, have been developed to mitigate or eliminate the overstatement of hypothetical willingness to pay. The ex-ante approach addresses hypothetical bias in the survey design stage while the ex-post approach addresses hypothetical bias with follow-up questions to the hypothetical willingness to pay question. We find that willingness to pay estimates are similar when either the ex-ante or ex-post approach are employed. Our results suggest that the approaches should be considered as complements and not substitutes. Employing both approaches to mitigate hypothetical bias we estimate that the annual benefits of the regional amenities associated with a Green Energy program in North Carolina are $186 million.     

众筹模式下心理距离对投资者支付意愿的影响

众筹是一种新型的网络融资模式,投资者对项目的支付意愿受到众多因素影响。将众筹的研究视角延伸至投资者心理行为领域,从投资者心理角度,研究时间和空间距离与投资者支付意愿的关系,应用解释水平理论,验证了解释水平与心理距离匹配对投资者支付意愿作用的差异。     

Endogenous private safety investment and the willingness to pay for mortality risk reductions

When individuals cannot undertake safety-improving expenditures, the effect of an increase in the initial risk on the willingness to pay (WTP) for mortality risk reduction is positive because of the dead-anyway effect. When they can undertake safety-improving expenditures, the effect of an increase in the initial risk is governed by two effects: The dead-anyway effect which is positive and the high-payment effect which is negative. We treat the two types of risk-reducing expenditures, endogenous and exogenous, as inputs in a safety-improving technology function and find conditions that guarantee that the high-payment effect dominates.