Relating environmental attitudes and contingent values: how robust are methods for identifying preference heterogeneity?

We assess the importance and robustness of cluster analysis and latent class analysis as methods to account for unobserved heterogeneity. We provide a critique and comparison of both methods in the context of measuring environmental attitudes and a contingent valuation study involving endangered species. We find strong evidence of robustness for these methods: group characterization and assignment of individuals to groups are similar between methods, and willingness-to-pay estimates are consistent. In addition, there are significant differences in willingness-to-pay across environmental attitudinal groups, and we find that accounting for unobservable heterogeneity provides a significantly better fitting model.     

Helping "light green" consumers walk the talk: Results of a behavioural intervention survey in the Swiss electricity market

While many consumer surveys show very positive attitudes towards renewable energy, the share of consumers actually purchasing green electricity is still in the single-digit percent range in most countries. What can be done to help consumers with positive attitudes towards green electricity to “walk the talk”, i.e. to behave consistently with their preferences? We developed a psychological model based on the theory of planned behaviour (TPB) to design a large-scale behavioural intervention survey with 1163 Swiss electricity consumers. Our results show that by providing information targeted at the key factors influencing the intention to purchase green electricity, namely attitudes towards purchase, social norms and perceived behavioural control, a significant increase in green electricity market share can be achieved. Our results show that price is not the only barrier to purchasing green electricity, and that information to increase the perceived benefit of buying green electricity as well as targeted communication to overcome inertia among retail electricity consumers are equally important factors.     

Consumer willingness-to-pay to reduce the probability of retail foodborne pathogen contamination

The US Department of Agriculture applies a cost-of-illness approach to value reductions in morbidity, which may understate the projected benefits from proposed food-safety improvements by ignoring costs such as pain, suffering and worry. We use a national survey with a hypothetical food-choice experiment to estimate a more comprehensive measure of consumer willingness-to-pay for food-safety improvements. Our approach differs from previous evaluations of food-safety improvements because we: (1) provide the respondent with information about the promised change in the probability of pathogen contamination in retail food packages rather than changes in the probability of becoming ill, (2) elicit changes in respondents’ subjective probability of becoming ill, and (3) elicit predicted changes in the quantity demanded for products that have enhanced food-safety properties. We estimate the consumer’s choice between a safety-enhanced and an existing product, the change in subjective probability of contracting foodborne illness associated with the enhanced product and the change-in-demand for the enhanced product in a manner that recognizes the correlation among unobserved elements. The aggregated results suggest benefit estimates that are significantly larger than previous estimates for similar improvements.     

Value of parsimonious nutritional information in a framed field experiment

This study investigates consumers’ beliefs about the tastiness and healthiness of 173 food items in a framed field experiment designed to mirror a grocery shopping environment. Using data collected from 129 food shoppers in Grenoble, France, demand models are estimated to determine how product choice is affected by price, taste, and perceived healthiness, and how choices change with the provision of objective health information. Unlike previous studies focusing on relatively complex nutrition labels, we elicit and convey health information using simple nutritional indices meant to lower search and cognitive processing costs. The results indicate that consumers are willing to pay for tastier foods and for healthier foods, particularly if the consumers have objective information (as opposed to perceived, subjective information) on nutrient content. The estimates suggest that the value of the type of nutritional information provided in the experiment is €0.98 per day. The figure refers to the daily welfare benefits that arise from being able to make a set of choices that better reflect people’s preferences by receiving the nutrient index information on all 173 food items versus not having such information.     

The total economic value of threatened, endangered and rare species: An updated meta-analysis

This paper updates a 1996 meta-analysis of studies using the Contingent Valuation Method (CVM) to value threatened, endangered and rare species published in this journal by Loomis and White. A variable for studies conducted in or after 1995 was added to the model to test if new studies are systematically different from old studies and identify which explanatory variables influencing willingness-to-pay (WTP) for these species have changed over time. Generally newer studies yielded higher WTP. Variables such as the change in the size of the species population, payment frequency, survey mode, response rate, type of respondent, type of species, and a new variable for whether a species is a ‘charismatic megafauna’ or not, whether the species has use and nonuse value versus nonuse value only and year of the study, were found to significantly influence WTP. This model is used in a benefit transfer example and a comparison of original study estimates and model estimates is made to compare its accuracy. The average within sample benefit transfer error was 34-45%.     

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.     

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.     

Quality certification vs. product traceability: Consumer preferences for informational attributes of pork in Georgia

Consumer willingness-to-pay for informational attributes of food products is important information for food producers and supply chain participants and policy makers. We examine consumer demand in the pork sector of the Republic of Georgia. Results of conditional and mixed logit estimation, conducted on choice experiment data, reveal that Georgian consumers treat quality certification and product traceability attributes as substitutes. We also find that producers and other supply chain participants should be concerned primarily with maintaining the appearance of pork products. Retailer specific factors such as location and type of outlet can also substitute for product traceability. Store location and product appearance, however, are complementary attributes. In light of the recent turbulence in Georgia these consideration may be of paramount importance as participants in the supply chain seek to rebuild damaged infrastructure.     

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.