Alberto Longo

The Internalization of Externalities in the Production of Electricity: Willingness to Pay for the Attributes of a Policy for Renewable Energy

This paper investigates the willingness to pay of a sample of residents of Bath, England, for a hypothetical program that promotes the production of renewable energy. Using choice experiments, we assess the preferences of respondents for a policy for the promotion of renewable energy that (i) contributes to the internalization of the external costs caused by fossil fuel technologies; (ii) affects the security of energy supply; (iii) has an impact on the employment in the energy sector; (iv) and leads to an increase in the electricity bill. Responses to the choice questions show that our respondents are in favour of a policy for renewable energy and that they attach a high value to a policy that brings private and public benefits in terms of climate change and energy security benefits. Our results therefore suggest that consumers are willing to pay a higher price for electricity in order to internalize the external costs in terms of energy security, climate change and air pollution caused by the production of electricity.

A Contingent Valuation of the 2012 London Olympic Games: A Regional Perspective

Major sporting events such as the Olympics are usually assessed in terms of economic impacts. Recently, policy makers have begun to place greater emphasis on possible intangible effects (such as civic pride, legacy of sporting facilities) associated with such events. To date, little work has been carried out on quantifying these effects in a meaningful way. This study uses contingent valuation methodology to assess the value of the proposed 2012 London Olympic Games. The survey is carried out on the provincial city of Bath, approximately 2 hours west of London. Conducting the survey outside of London is justified on the basis that the organizers of London 2012 have emphasized the value of the event to the United Kingdom as a whole. The results suggest that positive intangible effects are associated with the event and residents outside of London are willing to pay toward funding.

Information and Willingness to Pay in a Contingent Valuation Study: The Value of S. Erasmo in the Lagoon of Venice

This paper reports on a contingent valuation (CV) study eliciting willingness to pay (WTP) for a public program for the preservation of lagoon, beach and infrastructure in the island of S. Erasmo in the Lagoon of Venice, Italy. We use split samples to investigate the effect of providing a summary of reasons for voting in favor and against the program before the referendum valuation question. Reminding respondents of the reasons for voting for or against the program increases WTP among less highly educated respondents, and decreases WTP among more highly educated respondents.

Can People Value the Aesthetic and Use Services of Urban Sites? Evidence from a Survey of Belfast Residents

This study explores the potential of conjoint choice experiments for planning decisions on urban sites. We elicit peoples preferences for regeneration projects that change the aesthetic and use character of specified urban sites. We use a split-sample design with two sets of regeneration projects. The first entails hypothetical transformations of an actual square with an important cultural and historical dimension. The other consists of hypothetical transformations of an abstract square which we try to make as close as possible to the former in all respects, except for its cultural and historical dimension. Each regeneration project is defined by aesthetic and use attributes. Our results suggest that individual choices are explained by the attributes, andthat the marginal utilities are significantly different across projects forthe actual and the abstract square. Copyright Kluwer Academic Publishers 2003

The role of regret minimisation in lifestyle choices affecting the risk of coronary heart disease

This paper introduces the discrete choice model-paradigm of Random Regret Minimisation (RRM) to the field of health economics. The RRM is a regret-based model that explores a driver of choice different from the traditional utility-based Random Utility Maximisation (RUM). The RRM approach is based on the idea that, when choosing, individuals aim to minimise their regret-regret being defined as what one experiences when a non-chosen alternative in a choice set performs better than a chosen one in relation to one or more attributes. Analysing data from a discrete choice experiment on diet, physical activity and risk of a fatal heart attack in the next ten years administered to a sample of the Northern Ireland population, we find that the combined use of RUM and RRM models offer additional information, providing useful behavioural insights for better informed policy appraisal.

Valuing Algal Bloom in the Black Sea Coast of Bulgaria: A Choice Experiments Approach

Increased interest in water quality in coastal and marine areas stemming from the Water Framework Directive and the Marine Strategy Framework Directive has led to important questions in relation to policies that address nutrient loadings. This paper presents the results from a choice experiment study to assess the recreational damage associated with algal blooms caused by nutrients flows into Varna Bay, Bulgaria. Varna Bay is an important beach destination on the Black Sea coast of Bulgaria. Algal bloom events have been experienced frequently in the area. A choice experiment questionnaire was developed and applied in the Varna Bay area to assess the extent to which the quantity of algal blooms and the duration of the bloom affect recreational activities. The amount of bloom was found to be important, as respondents were on average willing to pay a one off tax of 18.97 Leva (9.73 euro) for a program that provides beaches free from algal blooms.

Site choices in recreational demand: a matter of utility maximization or regret minimization?

This paper compares the Random Regret Minimization and the Random Utility Maximization models for determining recreational choice. The Random Regret approach is based on the idea that, when choosing, individuals aim to minimize their regret – regret being defined as what one experiences when a non-chosen alternative in a choice set performs better than a chosen one in relation to one or more attributes. The Random Regret paradigm, recently developed in transport economics, presents a tractable, regret-based alternative to the dominant choice paradigm based on Random Utility. Using data from a travel cost study exploring factors that influence kayakers’ site-choice decisions in the Republic of Ireland, we estimate both the traditional Random Utility multinomial logit model (RU-MNL) and the Random Regret multinomial logit model (RR-MNL) to gain more insights into site choice decisions. We further explore whether choices are driven by a utility maximization or a regret minimization paradigm by running a binary logit model to examine the likelihood of the two decision choice paradigms using site visits and respondents characteristics as explanatory variables. In addition to being one of the first studies to apply the RR-MNL to an environmental good, this paper also represents the first application of the RR-MNL to compute the Logsum to test and strengthen conclusions on welfare impacts of potential alternative policy scenarios.

Sequence Effects in the Valuation of Multiple Environmental Programs Using the Contingent Valuation Method

In contingent valuation, the willingness to pay for hypothetical programs may be affected by the order in which programs are presented to respondents. With inclusive lists, economic theory suggests that sequence effects should be expected. However, when policy makers allocate public budgets to several environmental programs, they may be interested in assessing the value of the programs without the valuations being affected by the order in which the programs are presented. Using single-bounded dichotomous choice contingent valuation questions, we show that if respondents have the possibility to revise their willingness-to-pay answers, sequence effects are mitigated. (JEL Q51, Q54)

Using Surveys to Compare the Public’s and Decisionmakers’ Preferences for Urban Regeneration: The Venice Arsenale

In this paper, we illustrate how surveys can be used to elicit the preferences of the public and of policymakers and city officials for regeneration projects at urban sites. Our methodology uses rating exercises, coupled with conjoint-choice stated preferences for the general public and with ranking exercises for the public officials and other stakeholders, and is then applied to investigate alternative reuses of the Venice Arsenale, Italy, and their economic, environmental and social impacts. One interesting feature of the conjoint choice questions for members of the public is that the responses to these questions can be used to estimate the social benefits of regeneration projects, i.e., how much people are willing to pay for these urban transformations. Another advantage of our approach is that it can be used seek and foster broader public participation into urban decisionmaking processes.

The Value of Cultural Heritage Sites in Armenia: Evidence from a Travel Cost Method Study

This paper applies the travel cost method to visits to cultural sites in Armenia by domestic visitors. Respondents intercepted at four cultural monuments provided information on their visitation patterns, experience at the site, perception of the state of conservation of the monuments, and rating of the quality of the services and infrastructures. We combine actual trips with stated trips under hypothetical programs that would enhance the conservation of the monuments and improve one of (i) the cultural experience at the site, (ii) the quality of the infrastructure, or (iii) the quality of the services, and use the combined actual and stated trips to fit a panel data model. Our investigation shows that that there are significant use values associated with the four study monuments, and that conservation programs and initiatives that improve the cultural experience, or simply make it easier for the respondent to reach and spend time at the monument, are valued by domestic visitors and would encourage higher visitation rates.