Thijs Dekker

Sharing the burden of adaptation financing: An assessment of the contributions of countries

Climate change may cause most harm to countries that contribute least to greenhouse gas emissions. This paper identifies deontology, solidarity and consequentialism as the principles that can serve as a basis for a fair international burden sharing scheme of adaptation costs. We translate these principles into criteria that can be applied in assigning contributions of individual countries, namely historical responsibility, equality and capacity to pay. Specific political and scientific choices are discussed, highlighting implications for international burden-sharing. Combining historical responsibility and capacity to pay seems a promising starting point for international negotiations on the design of burden-sharing schemes. From the numerical assessment, it is clear that UNFCCC Annex I countries carry the greatest burden under most scenarios, but contributions differ substantially subject to the choice of an indicator for capacity to pay. The total financial contribution by the Annex I countries could be in the range of

Improving value transfer through socio-economic adjustments in a multicountry choice experiment of water conservation alternatives

55-68 billion annually.

Changing with the Tide: Semiparametric Estimation of Preference Dynamics

This study tests the transferability of the nonmarket values of water conservation for domestic and environmental purposes across three south European countries and Australia applying a common choice experiment design. Different approaches are followed to test the transferability of the estimated values, aiming to minimise transfer errors for use in policy analysis, comparing both single- and multicountry transfers, with and without socio-economic adjustments. Within Europe, significant differences are found between implicit prices for environmental water use, but not for domestic water use. In the Australian case study, alleviating restrictions on domestic water use has no significant value. Pooling the three European samples improves the transferability of the environmental flow values between Europe and Australia. Results show that a reduction in transfer error is achieved when controlling for unobserved and observed preference heterogeneity in the single- and multicountry transfers, providing additional support for the superiority of socio-economic adjustment procedures in value transfer.

Changing with the Tide: Semi-Parametric Estimation of Preference Dynamics

We contrast the discovered preference hypothesis against the theory of coherent arbitrariness in a split-sample stated choice experiment on flood-risk exposure. A semiparametric local multinomial logit model is developed as an alternative to the Swait and Louviere (1993) test procedure controlling for preference dynamics within and between samples. The proposed model supports the discovered preference hypothesis by means of a decaying starting point bias. The Swait and Louviere (1993) test procedure reaches a different conclusion. It rejects the assumption of stable preferences, but most preference dynamics tend to be smoothed out, causing a more erratic pattern of preference dynamics. (JEL C14, Q51)

The Role of Patients’ Age on Their Preferences for Choosing Additional Blood Pressure-Lowering Drugs: A Discrete Choice Experiment in Patients with Diabetes

This paper contrasts the discovered preference hypothesis against the theory of coherent arbitrariness in a split-sample stated choice experiment on flood risk exposure in the Netherlands. A semi-parametric local multinomial logit model (L-MNL) is developed as an alternative to the Swait and Louviere (1993) procedure to control for preference dynamics within and between samples. The L-MNL model finds empirical support for the discovered preference hypothesis in the form of a declining starting point bias induced by the first choice task. These results differ from the Swait and Louviere procedure which, due to its limited flexibility, accepts the standard assumption underlying microeconomic theory of stable preference parameters throughout the choice sequence. The observed preference dynamics puts the use of choice experiments at risk of generating biased welfare estimates if not controlled for.

Consumer surplus for random regret minimisation models

Objectives To assess whether patients’ willingness to add a blood pressure-lowering drug and the importance they attach to specific treatment characteristics differ among age groups in patients with type 2 diabetes. Materials and Methods Patients being prescribed at least an oral glucose-lowering and a blood pressure-lowering drug completed a questionnaire including a discrete choice experiment. This experiment contained choice sets with hypothetical blood pressure-lowering drugs and a no additional drug alternative, which differed in their characteristics (i.e. effects and intake moments). Differences in willingness to add a drug were compared between patients <75 years (non-aged) and ≥75 years (aged) using Pearson χ2-tests. Multinomial logit models were used to assess and compare the importance attached to the characteristics. Results Of the 161 patients who completed the questionnaire, 151 (72%) could be included in the analyses (mean age 68 years; 42% female). Aged patients were less willing to add a drug than non-aged patients (67% versus 84% respectively; P = 0.017). In both age groups, the effect on blood pressure was most important for choosing a drug, followed by the risk of adverse drug events and the risk of death. The effect on limitations due to stroke was only significant in the non-aged group. The effect on blood pressure was slightly more important in the non-aged than the aged group (P = 0.043). Conclusions Aged patients appear less willing to add a preventive drug than non-aged patients. The importance attached to various treatment characteristics does not seem to differ much among age groups.

Practical Solutions for Sampling Alternatives in Large-Scale Models

ABSTRACT This paper is the first to develop a measure of consumer surplus for the Random Regret Minimisation (RRM) model. Following a not so well-known approach proposed two decades ago, we measure (changes in) consumer surplus by studying (changes in) observed behaviour, i.e. the choice probability, in response to price (changes). We interpret the choice probability as a well-behaved approximation of the probabilistic demand curve and accordingly measure the consumer surplus as the area underneath this demand curve. The developed welfare measure enables researchers to assign a measure of consumer surplus to specific alternatives in the context of a given choice set. Moreover, we are able to value changes in the non-price attributes of a specific alternative. We illustrate how differences in consumer surplus between random regret and random utility models follow directly from the differences in their behavioural premises.

Impact of Travel Time Constraints on Taste Heterogeneity and Non-Linearity in Simple Time–Cost Trade-Offs

Many large-scale real-world transport applications have choice sets that are so large as to make model estimation and application computationally impractical. The ability to estimate models on subsets of the alternatives is thus of great appeal, and correction approaches have existed since the late 1970s for the simple multinomial logit (MNL) model. However, many of these models in practice rely on nested logit specifications, for example, in the context of the joint choice of mode and destination. Recent research has put forward solutions for such generalized extreme value (GEV) structures, but these structures remain difficult to apply in practice. This paper puts forward a simplification of the GEV method for use in computationally efficient implementations of nested logit. The good performance of this approach is illustrated with simulated data, and additional insights into sampling error are also provided with different sampling strategies for MNL.

Sharing the burden of financing adaptation to climate change

Discrete choice models are a key technique for estimating the value of travel time (VTT). Often, stated choice data are used in which respondents are presented with trade-offs between travel time and travel cost and possibly additional attributes. There is a clear possibility that some respondents experience time constraints, leaving some of the presented options unfeasible. A model not incorporating information on these constraints would explain choices for faster and more expensive options as an indication that those respondents have a higher VTT when in reality they may be forced to select the more expensive option as a result of their personal constraints. This paper puts forward the hypothesis that this can have major impacts on findings in terms of heterogeneity in VTT measures. This paper examines via simulation the bias in VTT estimates and especially preference heterogeneity when such constraints are (not) accounted for. Empirical evidence is provided that preference heterogeneity is confounded with the travel budget impact on the availabilities of alternatives, and it is shown that there is a risk of producing biased estimates for appraisal VTT if studies do not explicitly model choice set formation. The inclusion of an opt-out alternative could be an effective measure to reduce the bias. This paper also explores the potential use of non-linear functional forms to capture the time budget impacts.