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.     

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.     

Nonmarket valuation in developing countries: incorporating labour contributions in environmental benefits estimates

There are limitations associated with the application of nonmarket valuation techniques, including choice experiments, in subsistence economies. In part, this is due to the concern that using money as a mode of contribution may not capture the potential contribution of low‐income households. To address this limitation, respondents in this study were provided with the option of contributing towards the management of invasive plants in labour terms if they were unwilling to contribute in monetary terms. The results show that the existing practice of using dollar values to estimate willingness to contribute may disproportionately exclude the concerns of some groups within the community. The analysis also indicates that allowing respondents to express their willingness to contribute in labour increases their participation in environmental decision‐making processes and hence increases the estimated value of forest ecosystem services. This study contributes to the limited empirical literature on the development of nonmarket valuation surveys, particularly choice experiments, in low‐income countries in general and rural areas in particular.     

Non-market economic valuation in developing countries: Role of participant observation method in CVM analysis

Developing countries have high proportion of black money and related corruption in the society in comparison to the developed ones. This aspect has to be kept in mind while conducting contingent valuation method (CVM) questionnaire survey (in-person) at the site whose economic valuation is being done. Participant observation method (POM) and unstructured interview schedule (UIS) are the two means, which must be used in addition to structured interview schedule during CVM studies in developing countries to arrive at a reasonable non-market economic valuation figure of an environmental amenity. It has been observed that researchers generally ignore this fact during survey for primary data collection among respondents who are quite well off, educated and belong to countries of huge parallel economy. However in the present study, we have utilized these two means during primary data collection for a CVM study and reached the conclusion that CVM has to be used with caution even among educated masses in the developing countries.     

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.     

Managing groundwater in a mining region: an opportunity to compare best‐worst and referendum data

In nonmarket valuation, practitioners must choose a format for the valuation questions. A common approach in discrete choice experiments is the ‘pick‐one’ format, often with two alternative policy proposals and a status quo from which the respondent selects. Other proposed formats, include best‐worst elicitation, where respondents are asked to indicate their most and least favoured alternative from a set. Although best‐worst formats can offer efficiency in data collection, they can also lead to responses that are difficult to reconcile with neoclassical welfare estimation. The current article explores methodological issues surrounding the use of pick‐one versus best‐worst data for nonmarket valuation, focusing on framing and status quo effects that may occur within three‐alternative discrete choice experiments. We illustrate these issues using a case study of surplus groundwater use from Western Australian mining. Results identify concerns that may render best‐worst data unsuitable for welfare estimation, including a prevalence of serial choices in which the status quo is universally chosen as the worst alternative, rendering part of the choice process deterministic. Asymmetry of preferences and serial choices can be obscured when models are estimated using ‘naively’ pooled best‐worst data. Results suggest that caution is warranted when using best‐worst data for valuation, even when pooled results appear satisfactory.     

Non‐market valuation: usage and impacts in environmental policy and management in Australia

An extensive literature exists on environmental nonmarket valuation research. It appears that results from these studies should be useful inputs to decision‐making about environmental policy or management. Here, we investigate the extent to which this occurs in practice in Australian environmental management bodies. Nonmarket valuation experts were surveyed about their studies that they believed to have influenced policy. Then, decision‐makers in environmental bodies were interviewed about the level of influence nonmarket valuation has had on their decisions. We find that researchers' perceptions of the influence that nonmarket valuation has on decision‐making are overly optimistic. Interviews with decision‐makers suggest that nonmarket valuation is little used in decision‐making. Indeed, the majority of them are unfamiliar with nonmarket valuation techniques. Nevertheless, once the concept was explained to them, many decision‐makers believed it could benefit environmental policy. Researchers' perceptions of the reasons for low usage of nonmarket valuation are largely inaccurate. We suggest a range of strategies that economists can use to promote the use of nonmarket valuation in environmental policy and management decisions, including ways to improve communication and engagement with decision‐makers, and strategies to increase the capacity for decision‐makers to use nonmarket valuation results.     

Eliciting citizen preferences for multifunctional agriculture in the watershed areas of northern Thailand through choice experiment and latent class models

Multifunctional agriculture is increasingly discussed as an alternative to conventional, mono-functional farming and its negative environmental impacts. This study aims at determining Thai society’s demand for agri-environmental services offered by a multifunctional agricultural system using two models, i.e. a Choice Experiment Model and a Latent Class Choice Model. The Choice Experiment Model (CEM) is employed to assess citizens’ willingness to pay for various attributes of multifunctional outputs. Extending from the CEM, the heterogeneity of citizens’ preferences across environmental attitudes and knowledge is captured through the Latent Class Choice Model (LCCM). Survey data was obtained from structured interviews with 373 respondents in the country’s two largest cities, namely Bangkok and Chiang Mai. The results of the CEM suggest that urban Thai citizens are willing to pay for changes toward multifunctional agriculture, as expressed in an increase of their monthly food expenses. Among the attributes of agri-environmental practices, “organic agriculture in combination with agro-biodiversity conservation” garnered the highest preference, followed by “organic farming as single practice” and “Good Agricultural Practice combined with agro-biodiversity conservation”. Income, gender, agri-environmental knowledge and environment-conscious attitude are important factors determining urban citizens’ support of multifunctionality. Findings of the LCCM revealed a strong heterogeneity in attribute valuation across three different classes of respondents, suggesting that policy-makers need to be aware of diverse preference patterns among Thai citizens with regard to specific attributes of multifunctional agriculture. We further conclude that enhancing environmental literacy and consciousness is a key determinant in gaining citizens’ support for multifunctional agriculture.     

A Holistic vs. an Attribute‐based Approach to Agri‐Environmental Policy Valuation: Do Welfare Estimates Differ?

Different economic valuation methodologies can be used to value the non‐market benefits of an agri‐environmental scheme. In particular, the non‐market value can be examined by assessing the public’s willingness to pay for the policy outputs as a whole or by modelling the preferences of society for the component attributes of the rural landscape that result from the implementation of the policy. In this article we examine whether the welfare values estimated for an agri‐environmental policy are significantly different between an holistic valuation methodology (using contingent valuation) and an attribute‐based valuation methodology (choice experiment). It is argued that the valuation methodology chosen should be based on whether or not the overall objective is the valuation of the agri‐environment policy package in its entirety or the valuation of each of the policy’s distinct environmental outputs.     

Willingness-to-sell conservation easements: A case study

A contingent valuation survey of forest landowners in Southern Vermont and Western Massachusetts suggests that it would cost about $700 per acre to entice about one-half of Massachusetts and 33% of Vermont respondents to permanently conserve their forestland. Policies that promote early development of management plans and cooperation with neighbors are recommended because these activities appear to increase the likelihood that landowners will convey conservation easements. Education and a strong environmental ethic also improve the chances that respondents would sell conservation easements. A prediction-based contingent valuation format designed to reduce incentives for strategic behavior suggests that our results likely represent a lower bound estimate of landowner response to a large-scale conservation easement program.     

What's it worth? An examination of historical trends and future directions in environmental valuation*

The present paper reviews activity in environmental valuation by examining trends in publication rates over the past three decades. It also provides an overview of the demand for environmental valuation by academic markets and by policy markets. The results of this historical analysis suggest that there is not as much use of environmental valuation in policy analysis as could be expected given the academic efforts on this topic. The paper also provides an overview of the future directions that environmental valuation research is likely to take given current research efforts.     

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.     

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.     

A Bug Is a Bug Is a Bug: Symbolic Responses to Contingent Valuation Questions about Forest Pest control programs?

Symbolic responses are one of many issues attending contingent valuation studies. The problem is that many objects that are the subject of contingent valuation surveys can act as symbols for larger issues. In this paper, we want to compare the attitudes of residents of five communities with two different forest pests, jack pine budworm and gypsy moth. Jack pine budworm affects commercially important forests in Canada, while gypsy moth generally affects recreational areas and has less commercial significance. All of the respondents were asked about both insects; however, not all of the communities had direct experience with both insects. The purpose is to examine whether respondents would differentiate their willingness to pay for control mechanisms between these different defoliators. The implication is that all bugs are alike and generally noxious, a notion that would not necessarily sit well with resource managers who have to deal with insect outbreaks. Respondents did not differentiate strongly between insect control programs that would impact their community and those that would not. While not conclusive, the results do suggest symbolic responses to this particular issue. This is further evidence that willingness-to-pay results from contingent valuation studies need to be cautiously interpreted as pseudo market values.     

Consumer Attitudes to Genetically Modified Food in Norway

There is a lack of public acceptance of genetically modified (GM) food products in Europe. Using a dichotomous choice contingent valuation methodology, we find that, on average, survey respondents with a positive attitude toward the use of biotechnology in food production, higher educated, younger, and male need less of a discount to choose to purchase bread made with GM wheat. Further, we estimate confidence intervals for the mean discount required for consumers to choose GM bread. The 95% confidence interval for the mean discount required for the respondents to choose the GM bread is a 37% to 63% discount relative to conventional bread.     

3 Dimensional data research for property valuation in the context of the LADM Valuation Information Model

Property valuation is a process that promotes sustainable development as it supports and forms several land management activities. Access to information on the legal, geometric, physical, locational and environmental characteristics of property units together with the economic indicators are required for an effective property valuation system. Traditional cadastral systems generally provide only two-dimensional (2D) legal and geometric information about property units, however, today’s valuation practices would benefit significantly from three-dimensional (3D) information in order better to estimate and explain values of property units. The purpose of this paper is to examine how 3D spatial datasets and spatial analyses have been used in property valuation, and to develop 3D valuation unit profile(s) in line with the examination results for the recently proposed Valuation Information Model that extends the ISO 19152:2012 Land Administration Domain Model (LADM) from the valuation point of view. The study focuses more on 3D locational and environmental characteristics of property units; particularly visibility and especially viewshed analysis in terms of property valuation. By using open topography, building and height datasets of the Netherlands, a number of viewshed analyses are conducted to show how it can be utilized using different 3D data sources. The main contribution of the article is to present how 3D datasets and spatial analyses could be used to support property valuation activities and to investigate to what extent it is possible and meaningful to include derived 3D characteristics of property units in valuation registries.     

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.     

RESPONDENTS TO CONTINGENT VALUATION SURVEYS: CONSUMERS OR CITIZENS?

The fundamental assumption of the contingent valuation method (CYM) is that responses to CY questionnaires may be interpreted as expressions of consumer preferences. The consumer preference interpretation has been challenged in recent papers arguing that willingness to pay for wildlife preservation is generated, at least in part, by ethical concerns, rather than by a view that wildlife preservation will yield any benefit to individual respondents. Some further evidence bearing upon these questions is derived from a study of forest management in Australia undertaken by the Resource Assessment Commission (RAC). The evidence supports the interpretation that respondents are acting primarily as citizens.     

Emotional and satisfaction benefits to visitors as explanatory factors in the monetary valuation of environmental goods. An application to periurban green spaces

Over the last few decades, especially in urban areas, there has been a revival of the notion of quality of life in connection with periurban green spaces, the presence of which is thought to improve emotional well-being. This paper aims to determine how far the monetary valuation of this environmental resource is influenced by aspects relating to users’ emotional experience and satisfaction. The contingent valuation method is used to estimate monetary valuation and structural equation models allow examination of the relationships between visitor attitude and behaviour variables. The study focuses on two periurban green spaces in Spain and the data are obtained by means of face-to-face, in situ surveys of visitors. The findings support the relationship between visitor attitudes and the monetary valuation of this environmental good, revealing the need to advance further in exploring the potential of such natural resources to enhance urban social well-being.     

Australasian environmental economics: contributions,conflicts and ‘cop‐outs’*

Australian and New Zealand environmental economists have played a significant role in the development of concepts and their application across three fields within their subdiscipline: non‐market valuation, institutional economics and bioeconomic modelling. These contributions have been spurred on by debates within and outside the discipline. Much of the controversy has centred on the validity of valuations generated through the application of stated preference methods such as contingent valuation. Suggestions to overcome some shortcomings in the work of environmental economists include the commissioning of a sequence of non‐market valuation studies to fill existing gaps to improve the potential for benefit transfer.