Strategy and response to purchase intention questions

Purchase intention and willingness-to-pay (WTP) questions are often analyzed without considering that a respondent's utility maximizing answer need not correspond to a truthful answer. In this paper, we argue that individuals act, at least partially, in their own self-interest when answering survey questions. Consumers are conceptualized as thinking along two strategic dimensions when asked hypothetical purchase intention and WTP questions: (a) whether their response will influence the future price of a product and (b) whether their response will influence whether a product will actually be offered. Results provide initial evidence that strategic behavior may exist for some goods and some people.     

Are bilateral conservation policies for the Białowieża forest unattainable? Analysis of stated preferences of Polish and Belarusian public

Transboundary nature protected areas constitute a considerable proportion of all the existing spatial forms of biodiversity protection. One prominent example is the Białowieża Forest, shared by Poland and Belarus. There is a considerable literature on allocation of funds to preserving nature shared by several countries. Some of this literature assess the funding schemes and the impacts on biodiversity within the EU. A particular challenge for the Białowieża Forest is that the larger part of it is outside the EU border. There has been less research on the economic benefits that citizens attach to protected transboundary land nature on the other side of the border. We are trying to fill the gap by finding out and comparing preferences towards increased protection of domestic and foreign segments of the transboundary Białowieża Forest, stated by samples of Polish and Belarusian citizens. The results of a discrete choice experiment show an almost unilateral preference for nature conservation, passive protection of forest land, on the domestic side. Whilst Polish respondents on average are willing to pay for an increased area under protection, on their side of the border, most Belarusians seem to be satisfied with the status quo. Taken at face value, there is even an apparent mutual disutility derived from the perspective of co-financing bilateral passive protection programmes in the Białowieża Forest. By use of latent class analyses of responses, a group of the Polish sample willing to contribute to the transboundary conservation is identified and described, and compared against the non-cooperative groups on both sides of the border. The results can to some extent be explained by a strict border division with a high fence, by differences in welfare or by behavioural reasons. However, it cannot be ruled out that the affected populations simply do not perceive the Białowieża Forest as a binational public good.     

Economic valuation of environmental services sustained by water flows in the Yaqui River Delta

We attempted to estimate the economic value of environmental services provided by restored instream flows in the water-scarce Yaqui River Delta in Mexico. The Yaqui River begins near the U.S.-Mexico border and continues for 400 km before reaching the Oviachic dam, but has not reached the nearby Gulf of California for decades due to diversions for irrigation. These diversions have degraded the riparian ecosystem, coastal wetlands, and estuaries. Environmental services provided by restored flows in the Yaqui River would include healthy riverside vegetation, wetlands and estuaries, fish and wildlife habitats, non-use values, and recreation. A contingent valuation survey in 40 neighborhoods in the most populated Delta city, Ciudad Obregon, was administered to estimate non-market values of instream uses. Respondents were given a current and hypothetical Delta scenario (the latter assumed restored water flows in the River) and asked a willingness-to-pay (WTP) question regarding purchasing water for environmental flows through higher water bills. Results from 148 in-person interviews indicated that households would pay an average of 73 pesos monthly. WTP was found related to key variables suggested by economic theory and contingent valuation studies elsewhere: income, educational level, number of children in the household, and initial bid amount. These results will allow decision makers to compare the benefits generated by different water uses, including environmental services, and to manage scarce water resources under a long-term sustainable approach.     

Modification of Costanza's model of valuing ecosystem services and its application in China

In the past, evaluations of ecosystem functions were mostly based on Costanza's model, whereas the spatial, quality and temporal characteristics of regional ecosystems were not considered in the model.Focusing on these Issues, coefficients of regional difference, spatial heterogeneity and willingness-to-pay (WTP) were established to modify Costanza's model, and a new comprehensive valuation model of ecosystem functions is proposed.The analytical results indicate that the comprehensive model could evaluate regional ecosystem functions in China accurately and provide more helpful information for decision-making.The empirical study on Zhangbei County in Hebei Province shows that the intensive human activities could limit the provision of ecosystem functions while the planned ecological programs might promote the restoration of ecosystem functions.     

How do consumers in developed countries value the environment and workers’ social rights in developing countries?

This paper uses a lab experiment to investigate developed countries’ consumer valuations of characteristics linked to the environment and workers’ social rights in developing countries. It focuses on seafood products and distinguishes between regular, environmentally friendly and fair trade varieties. Consumer valuations are elicited with a multiple price list. Results show that environmental and social labels have similar effects on participant willingness-to-pay when they are first presented. Using welfare variation coming from the labels, we also show that the absence of negative information linked to the regular variety may lead to an underestimation of the value of information associated with the label.     

On the Edge of Buying: A Targeting Approach for Indecisive Buyers Based on Willingness-to-Pay Ranges

Targeting the “right” consumers is a core part of marketing. Whereas existing techniques to identify these consumers use demographic or psychographic variables or behaviors such as response probabilities, a proposed new targeting approach builds on consumers’ incremental responses to identify them by their willingness-to-pay (WTP) ranges. These WTP ranges reveal a consumer as a definite buyer, a definite non-buyer, or an indecisive buyer. The proposed theoretical framework indicates that indecisive buyers offer the highest incremental responses to targeted marketing mix activities and thus should be the most preferred targeting group. A sequence of three laboratory experimental studies validates the proposed approach for targeted price discounts and non-price tactics. In addition, a large-scale field experiment involving a consumer engagement campaign that includes observed purchase behavior demonstrates the high external validity and applicability of this approach.