Jürgen Meyerhoff

To Pay or Not to Pay: Competing Theories to Explain Individuals' Willingness to Pay for Public Environmental Goods

Several theories have been proposed in an attempt to explain individuals’ willingness to pay (WTP) for public environmental goods. While most studies only take into account a single theory, this article discusses competing theories. These include, in addition to a basic economic model, the theory of public goods, Ajzen’s theory of planned behavior, and Schwartz’s norm-activation model. Empirical results are based on a contingent valuation study of biodiversity in German forests. Multivariate analyses demonstrate that studies using single theories omit crucial explanatory variables and, hence, might be misleading. Economic models of WTP have proven to be incomplete, that is, they have restricted explanatory power and need to be supplemented by psychological and sociological models. Furthermore, a general finding is that factors influencing WTP are different for “in-principle WTP” on the one hand and “amount of WTP (given in-principle WTP)” on the other. Income, for example, does not affect whether individuals are willing to pay at all, but significantly influences how much they are willing to pay.

Benefits of meeting nutrient reduction targets for the Baltic Sea - a contingent valuation study in the nine coastal states

This paper presents the results of an internationally coordinated contingent valuation study on the benefits of reducing marine eutrophication in the Baltic Sea according to current policy targets. With over 10,500 respondents from the nine coastal states around the sea, we examine public willingness to pay (WTP) for reduced eutrophication and its determinants. There are considerable differences in mean WTP between countries, with Swedes being willing to pay the most and Latvians the least. The aggregate annual WTP is approximately €3600 million. In addition, we find that countries are heterogeneous in terms of the effects of income, attitudes and familiarity on WTP. Income elasticities of WTP are below 1 for all countries, ranging between 0.1 and 0.5. Attitudes and personal experience of eutrophication are important determinants of WTP, but the specific effects differ between countries. The findings can be used in economic analyses for the European Union (EU) Marine Strategy Framework Directive and to justify additional eutrophication reduction measures in the Baltic Sea.

Stated willingness to pay as hypothetical behaviour: Can attitudes tell us more?

Abstract The fact that people only state a hypothetical willingness to pay (WTP) in contingent valuation surveys still causes much debate. Doubters are sceptical about the reliability and validity of contingent valuation estimates, that is, whether people will actually pay the amount stated in the survey. Parallel to this discussion, social psychologists have conducted a great deal of research on the determinants of actual behaviour, particularly attitudes. Therefore, the objective of this paper is to analyse the relationship between different kinds of attitudes and behaviour. Based on this analysis, a composite attitude-behaviour model is developed and estimated using data from a contingent valuation about the river Elbe in Germany. The results show that attitudes towards the behaviour are the immediate antecedent of the behavioural intention. Accordingly, it is suggested that these attitudes along with attitudes towards the good in question and general attitudes should be measured in order to increase predictive validity.

Valuing the commons: An international study on the recreational benefits of the Baltic Sea

The Baltic Sea provides benefits to all of the nine nations along its coastline, with some 85 million people living within the catchment area. Achieving improvements in water quality requires international cooperation. The likelihood of effective cooperation is known to depend on the distribution across countries of the benefits and costs of actions needed to improve water quality. In this paper, we estimate the benefits associated with recreational use of the Baltic Sea in current environmental conditions using a travel cost approach, based on data from a large, standardized survey of households in each of the 9 Baltic Sea states. Both the probability of engaging in recreation (participation) and the number of visits people make are modeled. A large variation in the number of trips and the extent of participation is found, along with large differences in current annual economic benefits from Baltic Sea recreation. The total annual recreation benefits are close to 15 billion EUR. Under a water quality improvement scenario, the proportional increases in benefits range from 7 to 18% of the current annual benefits across countries. Depending on how the costs of actions are distributed, this could imply difficulties in achieving more international cooperation to achieve such improvements.

Protester or Non‐Protester: A Binary State? On the Use (and Non‐Use) of Latent Class Models to Analyse Protesting in Economic Valuation

In the analysis of stated preferences studies, it is often assumed that protesting is a discretely measured item only occurring among those who are not willing to pay. However, various studies have recently shown that protest beliefs are as well held by respondents who state a positive willingness to pay (WTP). Using latent class (LC) models, we investigate the extent of heterogeneity with respect to protest beliefs among all respondents of two contingent valuation studies. The advantage of LC models is that classes of individuals are endogenously identified and no selection bias is introduced by ad hoc definitions of protesters. Further we investigate whether it is possible to identify a class of non-protesters. Finding a group of pure non-protesters could indicate how strongly stated WTP in the whole sample is affected by protest beliefs. For both samples, we find a class with strong protest beliefs but no pure non-protest class. Overall, our results suggest that LC models might not be the first choice to determine unbiased WTP measures, but they provide valuable insights into the degree of protesting expressed by different groups and corresponding determinants of group membership.

Stated preferences towards renewable energy alternatives in Germany – do the consequentiality of the survey and trust in institutions matter?

ABSTRACT This research concerns the effect of consequentiality and trust in institutions on willingness to pay estimates towards the expansion of renewable energy in Germany. We use four information treatments which differ in terms of the information participants received prior to a discrete choice experiment. Treatments differ with respect to a consequentiality device and the institution which would be responsible for providing the good under evaluation. After finishing the choice tasks, respondents stated their perceived consequentiality and trust in institutions. We find perceived policy consequentiality to be strongly associated with the trust individuals have in both providing institutions. Moreover, compared to the treatments which did not highlight the consequences of the survey, participants are more inclined to perceive their responses to be at least somewhat consequential when the consequentiality device was presented. However, willingness to pay estimates do neither differ across treatments nor by the level of perceived consequentiality. We speculate that as the expansion of renewable energy is strongly debated with the public having a wide range of beliefs and political views, the requirements for consequential choices are not met.

Kosten einer möglichen Klimaänderung auf Sylt

Kustenraume gelten als besonders betroffen von den Folgen eines moglichen Klimawandels. Entsprechend war es Ziel des Projektes, die dadurch entstehenden Kosten exemplarisch am Beispiel der Insel Sylt zu ermitteln. Bewertet wurden im Wesentlichen zwei Auswirkungen auf die Insel Sylt: Erstens die Erosion auf der Westseite der Insel, die zu Vermogensschaden aufgrund der Verluste von Gebauden, Infrastruktur und Grundstucken fuhren kann. Zweitens die Beeintrachtigung von Natur und Landschaft in Form eines Verlustes seltener Wattenmeerbiotope als Folge starkeren Kustenschutzes auf der Ostseite. Fazit der okonomischen Bewertung ist, dass der Klimawandel entsprechend der hier untersuchten Variante durch zusatzliche Sandvorspulun- gen beherrschbar ist und daher keine dramatischen Entwicklungen erwarten lasst. Die Nutzen aus verstarkten Kustenschutzmasnahmen ubersteigen die Kosten fur die zusatzlichen Sandvorspu- lungen um ein Vielfaches. Und die Kosten fur auf der Ostseite zu prufende alternative Kusten- schutzmassnahmen waren durch die Nachfrage nach dem Schutz des Wattenmeeres als Natur- landschaft vor den Folgen des Klimawandels ebenfalls deutlich gedeckt.

Take your swimsuit along: the value of improving urban bathing sites in the metropolitan area of Berlin

Many inhabitants of Berlin enjoy bathing in lakes and rivers during the summer. However, so far no data exist about who goes bathing and what quality bathers expect from bathing sites. In an online survey conducted during the summer of 2007 respondents were presented with a choice experiment concerning various attributes of bathing sites such as water quality or cleanliness of the beach. Applying both random parameter logit models as well as a latent class model reveals that unobserved taste heterogeneity is present among bathers, i.e. not all bathers would benefit equally from improving bathing sites. A test concerning preference consistency reveals high internal validity.

Hybrid discrete choice models: Gained insights versus increasing effort

Hybrid choice models expand the standard models in discrete choice modelling by incorporating psychological factors as latent variables. They could therefore provide further insights into choice processes and underlying taste heterogeneity but the costs of estimating these models often significantly increase. This paper aims at comparing the results from a hybrid choice model and a classical random parameter logit. Point of departure for this analysis is whether researchers and practitioners should add hybrid choice models to their suite of models routinely estimated. Our comparison reveals, in line with the few prior studies, that hybrid models gain in efficiency by the inclusion of additional information. The use of one of the two proposed approaches, however, depends on the objective of the analysis. If disentangling preference heterogeneity is most important, hybrid model seems to be preferable. If the focus is on predictive power, a standard random parameter logit model might be the better choice. Finally, we give recommendations for an adequate use of hybrid choice models based on known principles of elementary scientific inference.

Der ökonomische Wert städtischer Freiräume

KurzfassungGrünflächen haben einen bedeutsamen Wert für die städtische Lebensqualität, der entsprechend der ökonomischen Theorie in Geldeinheiten beziffert werden sollte. Dieser Beitrag diskutiert die Eignung der Kontingenten Bewertung zur Abschätzung des Nutzens städtischer Grünflächen und präsentiert die wesentlichen Ergebnisse einer empirischen Anwendung in Berlin, bei der die Zahlungsbereitschaft der Parkbesucher für zwei Programme zur Aufwertung der Anlage ermittelt wurde.AbstractGreen spaces have important values contributing to the quality of urban life. According to economic theory, these values should be assessed in monetary terms. This paper discusses the suitability of the contingent valuation in assessing urban green spaces benefits, and presents the main results of an empirical study conducted in Berlin. The study was designed to measure the the visitors’ willingness to pay for two programs to enhance the quality of an urban park.