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.     

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%.     

Valuing environmental and health risk in agriculture: A choice experiment approach to pesticides in Italy

The widespread use of pesticides in agriculture shows a complex ramification of multiple negative externalities, ranging from food safety-related effects to the deterioration of farmland ecosystems. Recent research has demonstrated that the assessment of the economic implications of such negative processes is fraught with many uncertainties. This paper presents the results of an empirical study recently conducted in Northern Italy aimed at estimating the economic value of reducing the wide-ranging impacts of pesticide use, by deploying a Choice Experiment approach. The experimental design provides a meaningful tool to assign monetary values to the negative environmental effects associated with agrochemicals use. In this connection, the paper addresses in particular the reduction of farmland biodiversity, groundwater contamination and harm to human health. The resulting estimates confirm that, on average, respondents demonstrate a substantial willingness-to-pay a premium for agricultural goods (in particular, foodstuffs) produced in environmentally-benign ways.     

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.     

Heterogeneity distributions of willingness-to-pay in choice models

We investigate direct and indirect specification of the distribution of consumer willingness-to-pay (WTP) for changes in product attributes in a choice setting. Typically, choice models identify WTP for an attribute as a ratio of the estimated attribute and price coefficients. Previous research in marketing and economics has discussed the problems with allowing for random coefficients on both attribute and price, especially when the distribution of the price coefficient has mass near zero. These problems can be avoided by combining a parameterization of the likelihood function that directly identifies WTP with a normal prior for WTP. We show that the typical likelihood parameterization in combination with what are regarded as standard heterogeneity distributions for attribute and price coefficients results in poorly behaved posterior WTP distributions, especially in small sample settings. The implied prior for WTP readily allows for substantial mass in the tails of the distribution and extreme individual-level estimates of WTP. We also demonstrate the sensitivity of profit maximizing prices to parameterization and priors for WTP.

Corporate social and environmental responsibility in services: Will consumers pay for it?

Two studies investigate consumer awareness of and response toward socially and environmentally responsible practices in the hospitality industry. Results suggest that consumers exhibit more positive response toward establishments exhibiting higher levels of social responsibility, although many are uninformed of the extent to which the organizations they patronize engage in such practices. Most consumers are willing to incur a modest price increase while patronizing an organization that behaves in an environmentally and socially responsible fashion, but that willingness declines dramatically as the price premium escalates. Consumers with high involvement in and positive attitudes toward corporate social responsibility practices are most willing to pay a premium.