Wiktor L. Adamowicz

Stated Preference Approaches for Measuring Passive Use Values: Choice Experiments and Contingent Valuation

The measurement of passive use values has become an important issue in environmental economics. In this paper we examine an extension or variant of contingent valuation, the choice experiment, which employs a series of questions with more than two alternatives that are designed to elicit responses that allow the estimation of preferences over attributes of an environmental state. We also combine the information from choice experiments and contingent valuation to test for differences in preferences and error variances arising from the two methods. Our results show that choice experiments have considerable merit in measuring passive use values. Copyright 1998, Oxford University Press.

Understanding Heterogeneous Preferences in Random Utility Models: A Latent Class Approach

A finite mixture approach toconditional logit models is developed in whichlatent classes are used to promoteunderstanding of systematic heterogeneity. The model is applied to wilderness recreationin which a branded choice experiment involvingchoice of one park from a demand system wasadministered to a sample of recreationists. The basis of membership in the classes orsegments in the sample involved attitudinalmeasures of motivations for taking a trip, aswell as their stated preferences overwilderness park attributes. The econometricanalysis suggested that four classes of peopleexist in the sample. Using the model toexamine welfare measures of some hypotheticalpolicy changes identified markedly differentwelfare effects than the standard singlesegment model, and provided insight into thedifferential impact of alternative policies.

A comparison of stated preference methods for environmental valuation

This paper presents an empirical comparison of contingent valuation (CVM) and choice experiments which are used to value environmental quality changes. Both of these methods require individuals to state their preferences for environmental qualities. However, choice experiments differ from CVM in that environmental attributes are varied in an experimental design which requires respondents to make repeated choices between bundles of attributes. The empirical application involved the effect of environmental quality changes arising from forest management practices on recreational moose hunting values. Significant differences were found between the values derived from the two methods. However, detailed examination of the implied choice behaviour suggested that respondents ignored substitute recreation areas in the CVM question. Restricting the choice experiment model to consider only the one site where quality was varied, resulted in welfare estimates similar to the CVM model. This highlights the importance of substitutes in environmental valuation and suggests that choice experiments may be more appropriate than CVM in some cases.

The Influence of Task Complexity on Consumer Choice: A Latent Class Model of Decision Strategy Switching

The literature indicating that person-, context-, and task-specific factors cause consumers to utilize different decision strategies has generally failed to affect the specification of choice models used by practitioners and academics alike, who still tend to assume an utility maximizing, omniscient, indefatigable consumer. This article (1) introduces decision strategy selection, within a maintained compensatory framework, into aggregate choice models via latent classes, which arise because of task complexity; (2) it demonstrates that within an experimental choice task, the model reflects changing aggregate preferences as choice complexity changes and as the task progresses. The import of these findings for current practice, model interpretation, and future research needs is examined. Copyright 2001 by the University of Chicago.

Socioeconomic Determinants of Health- and Food Safety-Related Risk Perceptions

Individual and societal perceptions of food-related health risks are multidimensional and complex. Social, political, psychological, and economic factors interact with technological factors and affect perceptions in complex ways. Previous research found that the significant determinants of risk perceptions include socioeconomic and behavioral variables. Most of these past results are based on two-way comparisons and factor analysis. The objective of this study was to analyze the significance of socioeconomic determinants of risk perceptions concerning health and food safety. A multivariate approach was used and the results were compared with earlier bivariate results to determine which socioeconomic predictors were robust across methods. There were two major findings in this study. The first was that the results in the multivariate models were generally consistent with earlier bivariate analysis. That is, variables such as household income, number of children, gender, age, and voting preferences were strong predictors of an individuals risk perceptions. The second result was that the gender of the respondent was the only variable found to be robust across all three classes of health and food safety issues across two time periods.

Attribute-Based Methods

Stated preference methods of environmental valuation have been used by economists for decades where behavioral data have limitations. The contingent valuation method (Chapter 5) is the oldest stated preference approach, and hundreds of contingent valuation studies have been conducted. More recently, and especially over the last decade, a new class of stated preference methods has been developed, which we generically refer to as attribute-based methods (ABMs). As with contingent valuation, numerous ABM variants exist, employing, for example, different constructs for eliciting preferences. In this chapter, we describe the various ABMs currently used, explain how to construct an attribute-based experiment, and recommend methods for environmental valuation.

Complexity in Choice Experiments: Choice of the Status Quo Alternative and Implications for Welfare Measurement

We examine the propensity of respondents to choose the status quo (SQ) or current situation alternative as a function of complexity in two separate state-of-the-world choice experiments. Complexity in each choice set was characterized as the number of single and multiple changes in levels of attributes from the current situation and the order of the choice task in the sequence of multiple tasks provided to respondents. We show that increasing complexity leads to increased choice of the SQ and that a respondent’s age and level of education also influenced this choice. We outline the effects of the alternate approaches for incorporating the SQ into welfare measurement. These findings have implications for the design of stated preference experiments, examining passive use values and for empirical analysis leading to welfare measurement.

Functional Form and the Statistical Properties of Welfare Measures

This paper uses Monte Carlo analysis to compare the variance of consumers surplus for several functional forms for demand. Although the semilog and linear forms fit the data well by statistical criteria, the coefficients of variation for consumers surplus generated by these forms were substantially larger than for the double log and linear-log forms. While this paper is framed in the travel cost approach to recreational demand, there are implications for the choice of functional form whenever the measure of interest is a nonlinear transformation of the estimated parameters.

The Economics of the Environment and Natural Resources

List of Figures. List of Tables. List of Boxes. Preface. Acknowledgements. Introduction. Part I: Economics of the Environment:. 1. Models, Systems, and Dynamics. 2. Property Rights. 3. Economics of Pollution Control. Part II: Resource Economics:. 4. Bioeconomics of Fisheries. 5. Forestry Economics. 6. Water Economics. 7. Economics of Non--renewable Resources. Part III: Environmental Valuation:. 8. Environmental Valuation: Introduction and Theory. 9. Environmental Valuation: Stated Preference Methods. 10. Environmental Values Expressed Through Market Behavior. Part IV: Global Environment:. 11. Growth and the Environment. 12. Environmental Accounting. 13. Trade and Environment. 14. The Global Commons. 15. Biodiversity. 16. Sustaining the Environment. Glossary. Index

Serial Nonparticipation in Repeated Discrete Choice Models

We consider alternative econometric strategies for addressing serial nonparticipation, that is, repeated choice of the same alternative or same type of alternative across a series of choice occasions, in data typically analyzed within the repeated discrete choice framework. Single and double hurdle variants of the repeated discrete choice model are developed and applied to choice experiment and multisite seasonal recreation demand data. Our results suggest that hurdle models can generate significant improvements in statistical fit and qualitatively different policy implications, particularly in choice experiment applications where the proper treatment of serial nonparticipation is relatively more ambiguous.