Russell Blamey

Choice Modeling and Tests of Benefit Transfer

Benefit transfer is increasingly being used by decision makers as a way of estimating environmental values suitable for use in benefit cost analysis. However, recent studies examining the validity of benefit transfer of passive use values estimated using contingent valuation have rejected the hypothesis of convergent validity. In this article, we demonstrate the usage of a form of conjoint analysis known as choice modeling for benefit transfer. Choice modeling has been touted as being particularly suitable for benefit transfer because it is possible to allow for differences in environmental quality and socioeconomic characteristics when transferring benefit estimates. We demonstrate that choice modeling is suitable for benefit transfer, particularly when the transfers involve implicit prices. Second, we examine the circumstances in which benefit transfer of choice modeling derived value estimates is likely to be most valid. Two split sample tests were undertaken to achieve this objective. The evidence from these tests indicates that transfers across different case study sites are likely to be subject to less error than those across different populations.

A Test of Policy Labels in Environmental Choice Modelling Studies

Abstract A question that arises in the application of environmental choice modelling (CM) studies is whether to present the choice sets in a generic or labelled form. The former involves labelling the policy options to be presented to respondents in a generic way, for example, as ‘option A’, ‘option B’, etc. The labelled approach assigns alternative-specific descriptors to each option. These may relate to the names of proposed policies, different locations or any other policy-relevant details. Both approaches have their advantages. A potential advantage of using alternative-specific labels is that respondents may be better able to base their choices on the true policy context. This can increase predictive validity whilst at the same time reducing the cognitive burden of the CM exercise. A potential advantage of the generic labelling approach is that respondents may be less inclined to base their choices wholly or largely on the labels, and as a consequence, may provide better information regarding trade-offs among attributes. The two approaches to choice set design are compared in the context of a CM study of the values of remnant vegetation in the Desert Uplands of Central Queensland. Results indicate a difference in the cognitive processes generated by choice models using the different approaches. This difference is reflected in both the alternative-specific constants and the taste parameters, and cannot be accounted for by differences in error variance across the two treatments. The implications for environmental valuation are discussed.

Choice Modelling: Assessing the Environmental Values of Water Supply Options

Three criticisms of the contingent valuation method (CVM) are considered in this article. One technique that would appear to answer such criticisms is choice modelling (CM). CM permits value estimates for different goods sharing a common set of attributes to be pieced together using the results of a single multinomial (conditional) logit model. The CM approach to environmental value assessment is illustrated in the context of a consumer‐based assessment of future water supply options in the Australian Capital Territory. CM is found to provide a flexible and cost‐effective method for estimating use and passive use values, particularly when several alternative proposals need to be considered.

A Social Values Segmentation of the Potential Ecotourism Market

The use of social values in segmenting leisure and travel markets involving social goods is suggested as an alternative to the more common personal values approach. Results of a social values segmentation of the potential Australian ecotourism market indicate that the majority of potential ecotourists do not have particularly green values, and those with greener values tend to be least in favour of the use of park entrance fees. The latter appears to be a consequence of the high importance greens attach to equality, and the fact that shared responsibility through income taxes is perceived to be a more equitable source of funds for the management of natural areas.

Valuing improved wetland quality using choice modeling

The main stated preference technique used for estimating environmental values is the contingent valuation method. In this paper the results of an application of an alternative technique, choice modeling, are reported. Choice modeling has been developed in the marketing and transport applications but has only been used in a handful of environmental applications, most of which have focused on use values. The case study presented here involves the estimation of the nonuse environmental values provided by the Macquarie Marshes, a major wetland in New South Wales, Australia. Estimates of the nonuse value the community places on preventing job losses are also presented. The reported models are robust, having high explanatory power and variables that are statistically significant and consistent with expectations. These results provide support for the hypothesis that choice modeling can be used to estimate nonuse values for both environmental and social consequences of resource use changes.

Environmental values and resource management options: a choice modelling experience in Malaysia

The management of the Matang Mangrove Wetlands in Perak State, Malaysia is under review. To assist decision makers in determining the optimal management strategy, a choice modelling application was undertaken to estimate the non-market values provided under different management options. Implicit prices for environmental attributes including the area of environmental forest protected, the number of bird species protected and the recreation use of the area were estimated. In addition, the implicit price of a social, non-market attribute, the employment of local people in wetland based extractive industries, was estimated. Compensating surplus estimates for a number of alternative wetland management scenarios were also calculated.

Valuing remnant vegetation in Central Queensland using choice modelling.

In the Desert Uplands region of Central Queensland, many pastoralists are clearing vegetation in order to improve cattle grazing production. A choice modelling study was undertaken to provide estimates of the benefits of retaining remnant vegetation that are appropriate for inclusion in a cost benefit analysis of tighter clearing restrictions. Attributes included in the choice model were reductions in the population size of non‐threatened species, the number of endangered species lost to the region, and changes in regional income and employment. A nested logit model was used to model the data in order to avoid violations of the independence of irrelevant alternatives condition. The estimated benefits are reported for several tree clearing policy regimes that are more stringent than those currently applied.

Contingent valuation and the activation of environmental norms

Abstract This paper uses contingent valuation (CVM) as the context in which to explore the implications of a model of altruistic norm-activation. A model is presented which provides a framework for thinking about the factors that individuals consider when formulating their responses to CVM questions, and the processes by which they bring such factors together. The activation of personal environmental norms, and hence positive willingness to pay, depends on four main categories of belief: awareness and acceptance of environmental need; consequences of personal action; responsibility for personal action; and acceptance of policy initiatives. The model is illustrated with a qualitative case study, and some of the implications for CVM are considered in light of these findings. It is argued that whilst notions of fairness may not present problems from a demand-prediction economic standpoint, such notions may be more problematic for the cost-benefit-analysis use of results.

Testing the validity of responses to contingent valuation questioning

One way of assessing the validity of results generated through the application of the Contingent Valuation Method (CVM) is through the analysis of response sensitivity to factors expected to have an influence. Scope testing involves presenting at least two alternative impact scenarios to population sub‐samples and testing for differences between the estimates generated. Most applications of the CVM in Australia have not involved scope testing and those that have yielded mixed results. These studies are reviewed. The results of scope sensitivity and other validity tests are presented for a study aimed at estimating the value of environmental damage caused by dryland salinity in the Upper South East of South Australia.

The Validity of the Security-Harmony Social Values Model in the General Population

Abstract The Social Goal Values Inventory was administered to a national random sample of 1,680 respondents. The data were used to explore the structure of the instrument, to test the security-harmony model of political evaluation through confirmatory factor analysis, and to test the validity of the security-harmony model through its relationships with social-demographic and political variables. The results confirmed the existence of two major dimensions underlying the Social Goal Values Inventory, one representing security and the other harmony. The security value orientation was stronger among older, less educated, male respondents. The harmony value orientation was stronger among women and the well educated. The security-harmony model of political evaluation states that changes in left/right political preferences can be brought about through changes on the harmony or security dimension and that an increase in concern for one value orientation (e.g., security) does not mean a decrease in concern for the...