Olof Johansson-Stenman

Measuring Future Grandparents' Preferences for Equality and Relative Standing

Individuals’ aversion to risk and inequality, and their concern for relative standing, are measured through experimental choices between hypothetical societies. It is found that, on average, individuals are both fairly inequality-averse and have a strong concern for relative income. The results are used to illustrate welfare consequences based on a utilitarian SWF and a modified CRRA utility function. It is shown that the social marginal utility of income may then become negative, even at income levels that are far from extreme.

Do You Enjoy Having More than Others? Survey Evidence of Positional Goods

Although conventional economic theory proposes that only the absolute levels of income and consumption matter for people’s utility, there is much evidence that relative concerns are often important. This paper uses a survey-experimental method to measure people’s perceptions of the degree to which such concerns matter, i.e. the degree of positionality. Based on a representative sample in Sweden, income and cars are found to be highly positional, on average. This is in contrast to leisure and car safety, which may even be completely non-positional.

A conceptual analysis of the impact of travel demand management on private car use

A conceptual framework is presented that may be utilized when analyzing changes in household travel arising from the range of potential measures available to policy makers. The proposed framework draws on goal setting theory in order to understand how travel is influenced by the impact various travel demand management (TDM) measures have on time, cost, and convenience of travel options. Travel is understood from a perspective assuming that it is controlled by negative feedback functioning to minimize deviations from goals nested at different levels. The conceptual framework, with its basis in goal setting and control theories, is then applied to understanding strategic and operational choice related to travel as well as habitual travel. Finally, the proposed conceptual framework is used to highlight and focus attention on key research issues that ought to be addressed if our understanding of the impact of TDM measures on household travel, and private car use in particular, is to improve.

Willingness to pay for improved air quality in Sweden

The aim of the paper is to quantify individual willingness-to-pay measures of improved air quality in Sweden by using the Contingent Valuation Method (CVM). Such measures are important for policy makers when deciding about public investments and policy instruments in order to regulate environmental impacts, e.g. from road transportation and industry. The mean willingness to pay (WTP) for a 50% reduction of harmful substances where the respondents live and work was about 2000 SEK/year, which is of the same order of magnitude as earlier stated preference studies in Nordic countries. Most parameters in the econometric analysis had the expected sign. WTP was increasing in income, wealth and education; it was larger for men, members of environmental organizations, people living in big cities (which are on average more polluted), and people who own their house or apartment. It was lower for retired people. However, the additional WTP for people in big cities, although significantly higher than for other people, was lower than expected, indicating a possible insensitivity-to-scope effect.

Trust and Religion: Experimental Evidence from Rural Bangladesh

Trust is measured using both survey questions and a trust experiment among a random sample of Muslim and Hindu household heads in rural Bangladesh. We found no significant effect of the social distance between Hindus and Muslims in the trust experiment in terms of the proportions sent or returned. However, the survey responses do indicate significant differences. Both Hindus and Muslims were found to trust others from their own religion more than they trust people from other religions. Moreover, Hindus, the minority, trust other people less in general, and Hindus trust Muslims more than Muslims trust Hindus.

Measuring Hypothetical Bias in Choice Experiments: The Importance of Cognitive Consistency

Abstract A choice experiment eliciting environmental values with both real and hypothetical trade-offs is set up in order to test for hypothetical bias. A larger hypothetical bias was found in a between-subject than in a within-subject design, using otherwise identical scenarios, which can explain previous diverging results in the literature. We argue that people strive for consistency between their attitudes and behaviors, leading them to act in ways that correspond with their prior hypothetical statements. People hence seem to prefer to do what they say they would do, although this may not always reflect their true preferences regarding the good being valued.

The Importance of Ethics in Environmental Economics with a Focus on Existence Values

The importance of ethics and fundamental value judgments in environmental economics is high-lighted by discussing the controversial concept of existence values. The social value depends crucially on the social objective, which is not necessarily self-evident, e.g., since some individuals tend to value nature intrinsically. It is shown that the motives behind willingness to pay figures matter for the social value, and the conventional view that people respond to CV questions solely in order to maximize their own utility or well-being is questioned. The importance of being explicit about value judgments is emphasized, and it is argued that environmental economics should consider non-conventional assumptions which take the social context into account to a larger degree.

Distributional Weights in Cost-Benefit Analysis—Should We Forget about Them?

Many argue that it is socially inefficient to use distributional weights in cost-benefit analysis, and that doing so implies large inefficiency losses, when distributional matters can be dealt with trough income taxation, instead. Our results question this view, by showing a large range of cases when distributional weights are (second-best) optimal to use. One example is when different provided goods affect tax-revenues equally per dollar spent; utility functions that are separable in the provided goods is sufficient for this. Most results hold for linear and non-linear income taxes and whether they are optimal or not. General policy implications are discussed. (JEL D61, H21)

Estimating individual driving distance by car and public transport use in Sweden

How much to drive, and how much to use public transport, are modelled as three and two level decisions, respectively, based on micro–data for Sweden. The choices whether to have a car, whether to drive given access to a car, and how much to drive given that the individual drives at all are then estimated using a three equation model. Also after correcting for other variables, such as income, men are driving much more, and using less public transport, compared to women. People living in big cities are less likely to drive, but those who do are on average driving about as much as others. Age and access to company cars are also important determinants for travel behaviour, but being a member of an environmental organization is not. Driving increases with income, but to a lower degree compared to most aggregated studies on national level. The difference is explained in a model with income dependent structural changes, implying that it becomes more difficult to live without a car when average income increases. This indirect effect is found to be of a similar size as the ordinary income elasticity typically found in cross–section analysis within a country or region.

Are some lives more valuable? An ethical preferences approach

We develop a theoretical model of the ethical preferences of individuals, combining individual social welfare functions and random utility theory. The model is applied by conducting a choice experiment regarding safety-enhancing road investments that target different age groups and road user types. The relative value of a saved life is found to decrease with age, such that the present value of a saved life-year is almost independent of age at a pure rate of time preference of a few percent. Moreover, a saved pedestrian is consistently valued higher than a saved car driver of the same age.