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Journal ArticleDOI

Stated Preference Approaches for Measuring Passive Use Values: Choice Experiments and Contingent Valuation

01 Feb 1998-American Journal of Agricultural Economics (Oxford University Press)-Vol. 80, Iss: 1, pp 64-75
TL;DR: This article examined an extension or variant of contingent valuation, the choice experiment, which employs a series of questions with more than two alternatives that are designed to elicit responses that allow the estimation of preferences over attributes of an environmental state.
Abstract: The measurement of passive use values has become an important issue in environmental economics. In this paper we examine an extension or variant of contingent valuation, the choice experiment, which employs a series of questions with more than two alternatives that are designed to elicit responses that allow the estimation of preferences over attributes of an environmental state. We also combine the information from choice experiments and contingent valuation to test for differences in preferences and error variances arising from the two methods. Our results show that choice experiments have considerable merit in measuring passive use values.

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Citations
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Journal ArticleDOI
TL;DR: A common representation is offered that frames cultural services, along with all ES, by the relative contribution of relevant ecological structures and functions and by applicable social evaluation approaches, which provides a foundation for merging ecological and social science epistemologies to define and integrate cultural services better within the broader ES framework.
Abstract: Cultural ecosystem services (ES) are consistently recognized but not yet adequately defined or integrated within the ES framework. A substantial body of models, methods, and data relevant to cultural services has been developed within the social and behavioral sciences before and outside of the ES approach. A selective review of work in landscape aesthetics, cultural heritage, outdoor recreation, and spiritual significance demonstrates opportunities for operationally defining cultural services in terms of socioecological models, consistent with the larger set of ES. Such models explicitly link ecological structures and functions with cultural values and benefits, facilitating communication between scientists and stakeholders and enabling economic, multicriterion, deliberative evaluation and other methods that can clarify tradeoffs and synergies involving cultural ES. Based on this approach, a common representation is offered that frames cultural services, along with all ES, by the relative contribution of relevant ecological structures and functions and by applicable social evaluation approaches. This perspective provides a foundation for merging ecological and social science epistemologies to define and integrate cultural services better within the broader ES framework.

1,184 citations

Journal ArticleDOI
TL;DR: In this paper, the authors outline the choice experiment approach to environmental valuation, which has its roots in Lancaster's characteristics theory of value, in random utility theory and in experimental design, and illustrate the use of choice experiments with reference to a recent UK study on public preferences for alternative forest landscapes.
Abstract: This paper we outline the “choice experiment” approach to environmental valuation. This approach has its roots in Lancaster's characteristics theory of value, in random utility theory and in experimental design. We show how marginal values for the attributes of environmental assets, such as forests and rivers, can be estimated from pair-wise choices, as well as the value of the environmental asset as a whole. These choice pairs are designed so as to allow efficient statistical estimation of the underlying utility function, and to minimise required sample size. Choice experiments have important advantages over other environmental valuation methods, such as contingent valuation and travel cost-type models, although many design issues remain unresolved. Applications to environmental issues have so far been relatively limited. We illustrate the use of choice experiments with reference to a recent UK study on public preferences for alternative forest landscapes. This study allows us to perform a convergent validity test on the choice experiment estimates of willingness to pay.

1,140 citations

Journal ArticleDOI
TL;DR: In this paper, the authors present a set of guidelines for stated preference studies that are more comprehensive than those of the original National Oceanic and Atmospheric Administration (NOAA) Blue Ribbon Panel on contingent valuation, and reflect the two decades of research since that time.
Abstract: This article proposes contemporary best-practice recommendations for stated preference (SP) studies used to inform decision making, grounded in the accumulated body of peer-reviewed literature. These recommendations consider the use of SP methods to estimate both use and non-use (passive-use) values, and cover the broad SP domain, including contingent valuation and discrete choice experiments. We focus on applications to public goods in the context of the environment and human health but also consider ways in which the proposed recommendations might apply to other common areas of application. The recommendations recognize that SP results may be used and reused (benefit transfers) by governmental agencies and nongovernmental organizations, and that all such applications must be considered. The intended result is a set of guidelines for SP studies that is more comprehensive than that of the original National Oceanic and Atmospheric Administration (NOAA) Blue Ribbon Panel on contingent valuation, is more germane to contemporary applications, and reflects the two decades of research since that time. We also distinguish between practices for which accumulated research is sufficient to support recommendations and those for which greater uncertainty remains. The goal of this article is to raise the quality of SP studies used to support decision making and promote research that will further enhance the practice of these studies worldwide.

896 citations

Journal ArticleDOI
TL;DR: The authors compared hypothetical and non-hypothetical responses to choice experiment questions and found that the hypothetical responses predicted higher probabilities of purchasing beef steaks than non-homogeneous responses, and that the marginal willingness to pay for a change in steak quality is not statistically different across hypothetical and actual payment settings.
Abstract: This study compares hypothetical and nonhypothetical responses to choice experiment questions. We test for hypothetical bias in a choice experiment involving beef ribeye steaks with differing quality attributes. In general, hypothetical responses predicted higher probabilities of purchasing beef steaks than nonhypothetical responses. Thus, hypothetical choices overestimate total willingness-to-pay for beef steaks. However, marginal willingness-to-pay for a change in steak quality is, in general, not statistically different across hypothetical and actual payment settings.

793 citations

Journal ArticleDOI
TL;DR: In this paper, five ecosystem services that could be restored along a 45-mile section of the Platte river were described to respondents using a building block approach developed by an interdisciplinary team.

793 citations

References
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Book
18 Dec 1985
TL;DR: In this article, the authors present the methods of discrete choice analysis and their applications in the modeling of transportation systems and present a complete travel demand model system presented in chapter 11, which is intended as a graduate level text and a general professional reference.
Abstract: This book, which is intended as a graduate level text and a general professional reference, presents the methods of discrete choice analysis and their applications in the modeling of transportation systems. The first seven chapters provide a basic introduction to discrete choice analysis that covers the material needed to apply basic binary and multiple choice models. The chapters are as follows: introduction; review of the statistics of model estimation; theories of individual choice behavior; binary choice models; multinomial choice; aggregate forecasting techniques; and tests and practical issues in developing discrete choice models. The rest of the chapters cover more advanced material and culminate in the development of a complete travel demand model system presented in chapter 11. The advanced chapters are as follows: theory of sampling; aggregation and sampling of alternatives; models of multidimensional choice and the nested logit model; and systems of models. The last chapter (12) presents an overview of current research frontiers.

6,327 citations

Book
01 Mar 1989
TL;DR: Mitchell and Carson as discussed by the authors argue that at this time the contingent valuation (CV) method offers the most promising approach for determining public willingness to pay for many public goods, an approach likely to succeed, if used carefully, where other methods may fail.
Abstract: Economists and others have long believed that by balancing the costs of such public goods as air quality and wilderness areas against their benefits, informed policy choices can be made. But the problem of putting a dollar value on cleaner air or water and other goods not sold in the marketplace has been a major stumbling block. Mitchell and Carson, for reasons presented in this book, argue that at this time the contingent valuation (CV) method offers the most promising approach for determining public willingness to pay for many public goods---an approach likely to succeed, if used carefully, where other methods may fail. The result of ten years of research by the authors aimed at assessing how surveys might best be used to value public goods validly and reliably, this book makes a major contribution to what constitutes best practice in CV surveys. Mitchell and Carson begin by introducing the contingent valuation method, describing how it works and the nature of the benefits it can be used to measure, comparing it to other methods for measuring benefits, and examining the data-gathering technique on which it is based---survey research. Placing contingent valuation in the larger context of welfare theory, the authors examine how the CV method impels a deeper understanding of willingness-to-pay versus willingness-to-accept compensation measures, the possibility of existence values for public goods, the role of uncertainty in benefit valuation, and the question of whether a consumer goods market or a political goods market (referenda) should be emulated. In developing a CV methodology, the authors deal with issues of broader significance to survey research. Their model of respondent error is relevant to current efforts to frame a theory of response behavior and bias typology will interest those considering the cognitive aspects of answering survey questions. Mitchell and Carson conclude that the contingent valuation method can obtain valid valuation information on public goods, but only if the method is applied in a way that addresses the potential sources of error and bias. They end their book by providing guidelines for CV practitioners, a list of questions that should be asked by any decision maker who wishes to use the findings of a CV study, and suggestions for new applications of contingent valuation. Additional features include a comprehensive bibliography of the CV literature and an appendix summarizing more than 100 CV studies.

5,546 citations

Journal ArticleDOI
TL;DR: A series of decision-making experiments showed that individuals disproportionately stick with the status quo as mentioned in this paper, that is, doing nothing or maintaining one's current or previous decision, and that this bias is substantial in important real decisions.
Abstract: Most real decisions, unlike those of economics texts, have a status quo alternative—that is, doing nothing or maintaining one's current or previous decision. A series of decision-making experiments shows that individuals disproportionately stick with the status quo. Data on the selections of health plans and retirement programs by faculty members reveal that the status quo bias is substantial in important real decisions. Economics, psychology, and decision theory provide possible explanations for this bias. Applications are discussed ranging from marketing techniques, to industrial organization, to the advance of science.

4,817 citations

Book ChapterDOI
TL;DR: In this paper, the Coase theorem predicts that about half the mugs will trade, but observed volume is always significantly less than the predicted volume, suggesting that transactions costs cannot explain the undertrading for consumption goods.
Abstract: Contrary to theoretical expectations, measures of willingness to accept greatly exceed measures of willingness to pay. This paper reports several experiments that demonstrate that this "endowment effect" persists even in market settings with opportunities to learn. Consumption objects (e.g., coffee mugs) are randomly given to half the subjects in an experiment. Markets for the mugs are then conducted. The Coase theorem predicts that about half the mugs will trade, but observed volume is always significantly less. When markets for "induced-value" tokens are conducted, the predicted volume is observed, suggesting that transactions costs cannot explain the undertrading for consumption goods.

3,625 citations