The citizen versus consumer hypothesis: Evidence from a contingent valuation survey

This paper examines the criticism of contingent valuation put forth by Blamey, Common and Quiggin ( Australian Journal of Agricultural and Resource Economics , 1995, vol. 39, pp. 264–288). They argue that households have consistent preferences over private goods but not jointly consistent preferences over public and private goods and, hence, contingent valuation cannot uncover meaningful responses for the valuation of public goods. In this paper we argue that the motives that are manifested in choices for public goods can be explained in two ways. One is the model of the citizen, proposed by Blamey et al . (1995). The second is a model of neoclassical preferences with altruism. Given these alternative and competing explanations of choices for public goods, what matters is whether they imply differences in willingness to pay for public goods. We provide statistical evidence from a contingent valuation study of the control of deer in the USA that there is no difference in willingness to pay between those who profess 'citizen' or altruistic preferences and the rest of the presumably purely private respondents.     

Consumer sorting and hedonic valuation of wine attributes: exploiting data from a field experiment

This article uses a novel experimental approach to measure consumer willingness to pay (WTP) for wine attributes. We invited customers of a local supermarket who had selected a bottle of wine to purchase to participate in a valuation experiment. Integrating their original wine choice into the experiment, each participant evaluated six alternative wines, generating a rich set of data on willingness to pay and consumer characteristics. The data from the experiment allow us to compare standard shelf price‐based wine attribute valuation estimates with estimates using WTP data and an increasing amount of information about individual consumers. The full model employs individual fixed effects to estimate WTP parameters without bias from consumer sorting or supply side influences. Our WTP estimates for wine attributes differ markedly from previous attribute value estimates. Consumers in our sample display clear and stable preferences for wine varieties, but less clear preferences for appellations. Our results suggest caution is needed in using market prices to estimate parameters of the consumer valuation function for product attributes.     

Consumers’ Willingness to Pay for Sustainable Seafood Made in Europe

Sustainability of increasing relevance also for seafood markets. The aim of this contribution is to analyze consumer preferences and their willingness to pay (WTP) for different sustainability claims, and to identify consumer segments according to their WTP. The contingent valuation method was applied to elicit consumers’ WTP in eight European countries. The WTP varies between seven and almost 20%, depending on attribute and country. Three consumer groups become apparent: the largest group without any additional WTP, a smaller group with a moderate additional WTP of plus 17%, and a very small group with an additional WTP of more than 40%. Clear differences between countries are obvious regarding preferences for different sustainability attributes, particularly in the segment with the highest WTP. A fraction of the consumers is willing to pay significantly higher prices for sustainably produced fish from Europe: given that trustful standards are applied and well communicated.     

RESPONDENTS TO CONTINGENT VALUATION SURVEYS: CONSUMERS OR CITIZENS (BLAMEY,COMMON AND QUIGGIN,AJAE 39:3) — A COMMENT

Blarney, Common and Quiggin (1995) (BCQ) suggest that responses to contingent valuation (CV) questionnaires may be framed either according to the extent of individual benefits received, or according to wider views about ethical frameworks, impacts on other people, or desired societal levels. They characterise the individual benefit approach as a consumer model, and responses indicating wider concerns as citizen preferences. Citizen value responses are held to invalidate the economic assumptions underlying the use of CV. Hence, they hypothesize that the incorporation of CV results into benefit-cost analysis is problematic. In this comment we suggest that there are several flaws with the citizen value hypothesis. These can be grouped into arguments about the existence of citizen values based on ethical or altruistic grounds, and arguments about the identification of citizen values.     

Convergent validity in contingent valuation: an application to the willingness to pay for national climate change mitigation targets in Germany

This stated preferences survey determines the willingness to pay (WTP) for climate change mitigation policies using a representative sample of the German population. WTP is compared across three valuation question formats in a split sample design: the dichotomous choice (DC) referendum, the dissonance minimizing (DM) referendum and the two‐way payment ladder (TWPL). The influence of multinational cooperation on WTP is assessed by variation in the hypothetical scenarios. We demonstrate that the DM referendum and the TWPL, two question formats that induce similar response incentives, yield equal mean WTPs. Multinational cooperation did not change WTP in any of the question formats. Implications for current contingent valuation practice are discussed.     

Consumer Willingness to Pay for Low-Pesticide Fresh Produce in Taiwan

Willingness to pay (WTP) for reductions in health risk associated with consuming pesticide residues on vegetables are estimated using the contingent valuation method with in-person interviews of married females in Taiwan. Estimated median WTP for 25 per cent, 50 per cent and 90 per cent reductions in the risk of developing cancer from consuming pesticide residues on a popular Taiwanese vegetable, bok choy, are estimated as 46 per cent, 56 per cent and 75 per cent of the current price of bok choy, respectively. WTP is significantly related to the scope or magnitude of the risk reduction, although it varies less than proportionately to the risk increment. WTP is also significantly related to measures of consumer preferences for health.     

Willingness to Pay and QALYs: What Can We Learn about Valuing Foodborne Risk?

This paper examines the value of reducing foodborne risk. Previous research on the valuation of health risk has been dominated by the study of mortality risk. However, in most cases foodborne illnesses are non‐fatal, so we focus on individuals' preferences for reducing morbidity risk, while also including a realistic, if remote, chance of death. We use a contingent valuation method on a Swedish sample and we estimate a value of a statistical illness consistent with previous findings in the literature. We also examine how willingness to pay (WTP) varies with the expected change in quality‐adjusted life years (QALYs) and estimate the WTP per QALY. We find that WTP increases with, though less than proportionally to, a change in QALYs. However, our results also suggest that respondents may have found it difficult to evaluate compound risks of both morbidity and mortality simultaneously.     

Bovine spongiform encephalopathy in Japan: consumers' food safety perceptions and willingness to pay for tested beef*

The discovery of bovine spongiform encephalopathy (BSE), commonly known as ‘mad cow disease’, in Japan caused anxiety about consuming beef and beef products. As a result, there was a sudden fall in sales of beef that hurt the Japanese beef industry as well as major beef exporters to Japan. We analyse factors that affect Japanese consumers' willingness to pay (WTP) price premiums for BSE‐tested beef and estimate the mean WTP for BSE‐tested beef using data obtained from a consumer survey in Japan. A single‐bounded dichotomous choice contingent valuation model is used to recover the premium amount. We find that attitudes to food safety, reduction in beef consumption following the BSE outbreak, and being female all have a statistically significant positive effect on the WTP for BSE‐tested beef. Interestingly, demographic variables such as age and income do not affect the WTP, possibly indicating that the BSE scare similarly affected multiple segments of the population. In our sample, consumers are willing to pay a premium on average of greater than 50 per cent for BSE‐tested beef.     

Consumer Demand for Genetically Modified Rice in Urban China

We investigate consumer demand for genetically modified (GM) rice in urban China, using a relatively large survey of urban consumers in 2013 and the contingent valuation method. Our results show that respondents discount their WTP for first, second and third generation of GM rice by 31%, 34% and 36%, respectively, compared with non‐GM rice, indicating substantial aversion to GM rice by Chinese consumers. The level of consumers’ subjective knowledge of GM rice has a significantly negative impact on their WTP for GM rice, implying that GM rice in China has become a ‘special food’ with an unreliable image.     

Contingent valuation of urban public space: A case study of Ljubljanica riverbanks

The article presents an economic valuation of the Ljubljanica riverbanks area, which is an urban cultural landscape with distinct qualities of international importance. For this purpose, we combined a classical contingent valuation with a closed-form version of discrete choice method, where the protest responses have been removed. By using econometric analysis, we obtained the willingness-to-pay (WTP) value and established its determinants. It was ascertained that residents derived more utility from implementation of the targeted development scenario than visitors. Thus, a discriminatory contribution scheme similar to the one with respect to the mean WTP could supply substantial revenue for further targeted development, while still providing ample consumer surplus for both residents and visitors. The present analysis represents one of the method’s very few applications to urban landscape in Central and Eastern European countries.     

Testing for convergent validity between travel cost and contingent valuation estimates of recreation values in the Coorong,Australia*

A number of studies valuing recreation have shown that the travel cost method (TCM) generates higher estimates of value than the contingent valuation method (CVM), even though the latter is commonly associated with potential problems of hypothetical and strategic bias. In this study, both methods have been used to estimate the recreational values associated with the Coorong on the Murray River in south‐eastern Australia. Values per adult visitor per recreation day are estimated with the TCM at $149 and with the CVM at $116. A number of methodological and framing issues to explain these value differences are tested. In summary, while no single methodological or framing issue could be identified that would reconcile the difference between TCM and CVM values, it appears likely that there may be a combination of factors that drive the systematic variations in consumer surplus values. The evidence in this study suggests that the most important of these are likely to be the different decision points underpinning data collection and the consideration of substitute sites, strategic responses and the treatment of uncertain responses within the CVM.     

Designing a forest-energy policy to reduce forest fires in Galicia (Spain): A contingent valuation application

Recent issues of this journal have presented an interesting debate regarding forest fires in Galicia, Spain. This article proposes a forest-energy programme that will contribute to reducing the risk of forest fires in this Atlantic Region of Southern Europe. We apply the contingent valuation method to assess a programme whereby 10% of the electricity produced from coal, fuel oil and gas would be replaced by electricity generated in biomass power plants. The programme would begin implementation in 2005 and it would take 6 years (up to 2010) before we reach the 10% goal. The results show that Galician households are willing to pay a mean of 38 Euros per year. In addition, we have introduced an innovative procedure to detect protest responses related to the payment vehicle in a contingent valuation. Heckman's sample-selection procedure is used to analyse the WTP function.     

Effects of media headlines on consumer preferences for food safety,quality and environmental attributes

In recent years, Asia has emerged as an important supplier of food to Western countries. In this study, we focus on shrimp, a major aquaculture commodity, to evaluate consumer willingness‐to‐pay (WTP) for enhanced food safety, use of antibiotics and eco‐friendly practices used in producing shrimp in the presence of country‐of‐origin labelling. Specifically, this research assesses the effects of news headlines regarding product safety, as information shocks on U.S. consumer demand. Consumers were found to have a mean willingness‐to‐pay of $7.81 per pound of shrimp with an enhanced safety characteristic from the United States, $0.94 for the same type of shrimp from China and $2.43 for similar shrimp from Thailand. Consumers had a WTP for the absence of antibiotics in the production of U.S. shrimp of $7.31 and were only willing to pay for an eco‐friendly attribute on domestically produced shrimp. Media headlines were found to have a statistically significant effect on consumer preferences and WTP for product characteristics. Food policy and international agribusiness implications of our findings are discussed.     

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.     

Consumers’ preferences for fresh broccolis: interactive effects between country of origin and organic labels

While international trade in organic products has grown significantly, understanding consumers’ preferences for imported organic foods has remained limited. This research examines the impact of country‐of‐origin labeling on US consumers’ choices of organic foods. Results show that consumer valuation of domestically produced organic broccoli was significantly higher than that of imported organic broccoli. Adding information about USDA organic certification standards/rules for imported products mildly increases consumer valuation of imported organic broccoli in some cases. These findings suggest that providing such information may have a positive impact on consumer willingness to purchase imported organic products.     

Protester or non‐protester: a binary state? On the use (and non‐use) of latent class models to analyse protesting in economic valuation*

In the analysis of stated preferences studies, it is often assumed that protesting is a discretely measured item only occurring among those who are not willing to pay. However, various studies have recently shown that protest beliefs are as well held by respondents who state a positive willingness to pay (WTP). Using latent class (LC) models, we investigate the extent of heterogeneity with respect to protest beliefs among all respondents of two contingent valuation studies. The advantage of LC models is that classes of individuals are endogenously identified and no selection bias is introduced by ad hoc definitions of protesters. Further we investigate whether it is possible to identify a class of non‐protesters. Finding a group of pure non‐protesters could indicate how strongly stated WTP in the whole sample is affected by protest beliefs. For both samples, we find a class with strong protest beliefs but no pure non‐protest class. Overall, our results suggest that LC models might not be the first choice to determine unbiased WTP measures, but they provide valuable insights into the degree of protesting expressed by different groups and corresponding determinants of group membership.     

Cotton farmers’ willingness to pay for pest management services in northern Benin

This study was carried out to assess cotton farmers’ willingness to pay (WTP) for pest management services in northern Benin. Targeted staggered control (TSC) has been introduced to reduce pesticide use in cotton cropping and generate an estimated benefit of FCFA48,800 (€74.40) per cotton hectare accruing from increased productivity and reduced pesticide cost. However, TSC application requires extra time for pest identification and scouting, and its adoption remains low due to the lack of funding to boost farmers’ awareness and cover training costs. An interval regression model was used to analyze responses to a double‐bounded contingent valuation survey with data collected from 300 cotton farmers. The results showed that 87.3% of cotton farmers were willing to pay for TSC services. Annual WTP per cotton hectare was estimated at FCFA16,962 (€25.80), revealing an existing demand for TSC adoption. Respondents' WTP was driven by farm and socio‐economic characteristics. Financial mechanisms managed by farmers could thus potentially foster technology adoption, and in turn, generate economic and environmental benefits.     

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.     

Valuing Australian botanic collections: a combined travel‐cost and contingent valuation study*

Economic values of biological collections in three Australian botanic gardens in Canberra, Melbourne and Sydney were estimated using the travel‐cost method (TCM) and the contingent valuation method (CVM). The TCM component of the study produced average per‐trip consumer surplus (CS) values of $39 and $18 for single‐ and multiple‐site visitors, respectively, for each botanic garden, resulting in an estimate of approximately $194 million for the total social welfare generated by trips to the three sites. Marginal willingness to pay (WTP) for access to botanic gardens was also investigated through payment vehicles of entry fees or higher parking charges using the CVM component. The analysis revealed a positive mean WTP of between $3 and $5 per trip per person. The difference between the CVM and TCM results reflect the different underlying concepts of value under investigation: average CS per visit for the TCM and the utility arising from a marginal visit for the CVM. Marginal changes in CS from the TCM were derived. The confidence intervals from the TCM marginal values overlap the WTP estimates from the CVM. These findings will be useful for resource management decisions in the botanic gardens collection in Australia.     

Consumer Valuation of Environmentally Friendly Production Practices in Wines,considering Asymmetric Information and Sensory Effects

Agricultural producers and food marketers are increasingly responding to environmentally friendly cues from consumers, even though privately appropriated values associated with a range of food products commonly rank above their public‐good counterparts. Wine can be considered an ideal product to examine these issues given consumers’ highly subjective sensory preferences towards wine, and a winegrape production process that is relatively intensive in the use of chemical inputs for the control of disease and infection. Semi‐dry Riesling wines made from field research trials following environmentally friendly canopy management practices were utilised in a lab experiment to better understand preferences for environmental attributes in wine. A combined sensory and monetary evaluation framework explicitly considered asymmetric order effects. Empirical results revealed that sensory effects dominate extrinsic environmental attributes. Once consumer willingness to pay (WTP) was conditioned on a wine’s sensory attributes, the addition of environmentally friendly information did not affect their WTP; however, adding sensory information significantly influenced WTP initially based only on environmental attributes. The results confirm the idea that promoting environmentally friendly winegrape production practices would increase demand and lead to higher premiums for the products, but are only sustainable if consumers’ sensory expectations are met on quality.