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.     

GOVERNMENT VERSUS PRIVATE QUALITY ASSURANCE FOR AUSTRALIAN FOOD EXPORTS

Most foodstuffs have quality attributes that are difficult to determine prior to purchase. Thus quality assurance is an inherent problem in food exporting. Private quality assurance can succeed if exporters can credibly signal that they have much to lose from cessation of purchases. If exporters do not provide credible quality signals, and foreign importers judge food quality according to country of origin, honest exporters can suffer negative spillovers from others' cheating under either government or private quality assurance. For both economic and political reasons, the best choice between government and private quality assurance will differ between foods and importing countries.     

UTILITARIAN AND RIGHTS-BASED ALTERNATIVES FOR PROTECTING SITES OF SPECIAL SCIENTIFIC INTEREST

Current legislation in Great Britain has set up a class of protected land under the designation Site of Special Scientific Interest (SSSI). However, what values are to be protected, and how, are questions largely left unanswered. Areas which are designated as worthy of protection can still be threatened by gradual erosion due to rural development. The designation of a site as being of conservation value requires an agency which enforces protection from development. We highlight the conflicts which have arisen between landowners and conservationists over SSSI management and analyse the role of a conservation agency under alternative environmental philosophies. We show how the values underlying the motive for conservation will affect the environmental management process chosen. This provides contrasting views as to the future for countryside management, and focuses concern on the current trend towards the free market in which trade-offs based upon the anthropocentric usefulness of nature are fundamental.     

RISK, PERSISTENCE and FOCUS: A LIFE CYCLE OF THE ENTREPRENEUR

Adapting a life cycle model from managerial literature, conclusions are drawn about the nature of colonial entrepreneurship from a case analysis of 133 New Zealand entrepreneurs, active between 1880 and 1910. Five stages in the life cycle of the entrepreneur are investigated: preparation, embarkation, exploration, expansion and transformation. Characteristic behaviours observed include the prevalence of entrepreneurial partnerships; a propensity for commencing multiple business ventures; and persistence in the face of business failure. Strategically, the colonial entrepreneur leveraged personal skills and abilities as a modus operandi for business expansion, often relying on family ownership and family management structures.     

Provision versus Appropriation in Symmetric and Asymmetric Social Dilemmas

Social dilemmas characterize decision environments in which individuals' exclusive pursuit of their own material self‐interest can produce inefficient allocations. Social dilemmas are most commonly studied in provision games, such as public goods games and trust games, in which the social dilemma can be manifested in foregone opportunities to create surplus. Appropriation games are sometimes used to study social dilemmas that can be manifested in destruction of surplus, as is typical in common‐pool resource extraction games. A central question is whether social dilemmas are more serious for inhibiting creation of surplus or in promoting its destruction. This question is addressed in this study with an experiment involving three pairs of payoff‐equivalent provision and appropriation games. Some game pairs are symmetric, whereas others involve asymmetric power relationships. We find that play of symmetric provision and appropriation games produces comparable efficiency. In contrast, power asymmetry leads to significantly lower efficiency in an appropriation game than in a payoff‐equivalent provision game. This outcome can be rationalized by reciprocal preference theory but not by models of unconditional social preferences.     

Share price anticipation of earnings and management's discussion of operations and financing

This paper combines research on the measurement of disclosure quality and the measurement of share price anticipation of earnings to produce a new test of the usefulness of the information disclosed in management discussions of operations and financing for predicting future earnings. Market-Based Accounting Research has shown that earnings changes are anticipated and impounded in prices well before the financial year for which earnings are reported. This price anticipation leads to downward biased earnings response coefficients (ERCs) in the commonly estimated regression model of returns on contemporaneous earnings changes. We exploit predictable differences in the biasedness of the ERC estimate across firm-years to test the hypothesis that share prices are better informed when the annual report contains a detailed discussion of the firm's operations and financing. Our results suggest that such voluntary disclosure may have been useful in predicting future earnings changes. The effect would appear to be strongest (1) in models that examine one-period-ahead and two-period-ahead share price anticipation and (2) when we employ a disclosure index that captures forward-looking information.