David Hoyos

Incorporating environmental attitudes in discrete choice models: An exploration of the utility of the awareness of consequences scale

Environmental economists are increasingly interested in better understanding how people cognitively organise their beliefs and attitudes towards environmental change in order to identify key motives and barriers that stimulate or prevent action. In this paper, we explore the utility of a commonly used psychometric scale, the awareness of consequences (AC) scale, in order to better understand stated choices. The main contribution of the paper is that it provides a novel approach to incorporate attitudinal information into discrete choice models for environmental valuation: firstly, environmental attitudes are incorporated using a reinterpretation of the classical AC scale recently proposed by Ryan and Spash (2012); and, secondly, attitudinal data is incorporated as latent variables under a hybrid choice modelling framework. This novel approach is applied to data from a survey conducted in the Basque Country (Spain) in 2008 aimed at valuing land-use policies in a Natura 2000 Network site. The results are relevant to policy-making because choice models that are able to accommodate underlying environmental attitudes may help in designing more effective environmental policies.

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)

A participatory integrated assessment approach for Natura 2000 network sites

Managing protected areas (PAs) requires dealing with complex social-ecological systems where multiple dimensions (i.e. social, institutional, economic and ecological) interact over time. Uni-dimensional and top-down approaches have been unable to capture this complexity. Instead, new integrated approaches that acknowledge the multidimensional nature of PAs and the diversity of social actors in the decision making process are required. In this paper we put forward a novel participatory assessment approach which integrates multiple methodologies to reflect value articulating institutions in the case of a Natura 2000 (N2000) network site in the Basque Country (Southern Europe). This novel approach is based on a social multi-criteria evaluation framework, that integrates (i) economic values derived from a choice experiment, (ii) ecological values by means of a spatial bio-geographic assessment, and (iii) a participatory process among diverse social actors. The case study shows that through the integration of diverse perspectives it is possible to achieve compromise solutions that foster the ecological values of PAs while enhancing other socio-economic benefits. Such co-benefits are important to enhance the acceptance and scope of N2000 and overcome undesirable social-ecological conflicts. We also show that the inclusion of all affected parties in a deliberative process is a key prerequisite to ensure ecologically effective and socially acceptable decisions that will lead to sustainable conservation policies.

Regional Differences in the Price Elasticity of Residential Water Demand in Spain

This paper explores the influence of regional climate variability on the elasticity of price for residential water demand in Spain. The data comes from the Spanish Survey of Family Budget (INE 2012), a national based survey of household living conditions including more than 15,000 observations. The econometric analysis included other determinants of residential water demand in Spain such as income and household characteristics. In line with the broad literature, the demand for water in Spain is found to be inelastic, although price elasticity differs notably when accounting for different climatic regions in the territory. The results have noteworthy policy implications as water pricing is considered an efficient means of long term sustainable planning of water resources management. The results imply that policy makers may have reasons to explore differentiating the impacts of water efficiency measures by region.

Análisis de la demanda residencial de los servicios básicos en España usando un modelo QUAIDS censurado

El presente articulo analiza la demanda residencial espanola en los bienes que forman parte de los servicios basicos del hogar (electricidad, gas natural y agua potable) en 2012. El analisis se realiza utilizando un modelo QUAIDS adaptado para tratar la censura en el consumo de gas natural segun el enfoque de Tauchmann (2010), uno de los ultimos avances en esta materia. Los resultados muestran que la demanda de electricidad y agua potable es menos sensible a las variaciones de sus precios e ingreso residencial que la demanda de gas natural.

A multiple indicator solution approach to endogeneity in discrete-choice models for environmental valuation

Endogeneity is an often neglected issue in empirical applications of discrete choice modelling despite its severe consequences in terms of inconsistent parameter estimation and biased welfare measures. This article analyses the performance of the multiple indicator solution method to deal with endogeneity arising from omitted explanatory variables in discrete choice models for environmental valuation. We also propose and illustrate a factor analysis procedure for the selection of the indicators in practice. Additionally, the performance of this method is compared with the recently proposed hybrid choice modelling framework. In an empirical application we find that the multiple indicator solution method and the hybrid model approach provide similar results in terms of welfare estimates, although the multiple indicator solution method is more parsimonious and notably easier to implement. The empirical results open a path to explore the performance of this method when endogeneity is thought to have a different cause or under a different set of indicators.

Estimating the Direct Rebound Effect in the Residential Energy Sector: An Application in Spain

This chapter estimates the direct rebound effect in residential heating and domestic hot water services in Spain in 2012. The fuels analysed are electricity and natural gas. Contrary to previous research, the direct rebound effect is calculated using, among others, data on unit variable cost of energy, the amount of energy consumed per annum and residential CO2 emissions. The direct rebound effects estimated are found to be relatively high, so an increase in energy efficiency can be expected to produce only a slight decrease in consumption. On the other hand, it is found that a decrease in residential CO2 emissions may result in a drop in residential energy consumption, with natural gas as the most sensitive fuel.