Incentive compatibility tests of choice experiment value elicitation questions

This paper uses laboratory experiments with induced values to address fundamental issues related to the incentive compatibility of choice experiment value elicitation questions. In particular, we compare two- versus three-option choice sets and the effect of using alternative provision rules, including one where the outcome is influenced by both participant and “regulator” votes. We find the overall proportion of choices that are inconsistent with induced preferences is rather low. However, there are more deviations from induced preferences for two-option choice sets, and for alternatives to a simple plurality vote implementation rule. A multinomial probit analysis of choices in tandem with a mixed logit welfare analysis suggests there is a statistically significant but modest degree of bias towards selecting the status quo option.     

Personality and economic choices

There is substantial variation in individual preferences for public goods, yet much of that variation remains poorly understood. However, simple measures of personality can help to explain economic values and choices in a systematic way. In this paper, we examine the effects of personality on individual economic choices over public environmental goods. Based on three datasets from three separate stated preference studies, we use a hybrid choice econometric framework to examine the effects of personality on preferences for the status quo, changes in environmental quality, and costs of investing in environmental improvements. We find effects that are consistent across all datasets. Personality, a stable feature of an individual's character that is simple to measure, enriches explanations of why the demand for environmental goods varies across people, provides an indication of how different people are likely to react to the introduction of environmental policies, and explains substantial differences in Willingness to Pay.     

The influence of individuals in forming collective household preferences for water quality

Preference for water quality and its nonmarket valuation can be used to inform the development of pricing policies and long term supply strategies. Tap water quality is a household concern. The objective status quo of water provision varies between households and not between individuals within households, while charges are levied on households not individuals. Individual preferences differ from collective preferences. In households where there are two adults, we examine the preferences of each separately and then as a couple in collective decisions. We show the level of influence each has in developing the collective decision process. We use discrete choice experiments to model preference heterogeneity across three experiments on women, men and on both. We propose a random utility model which decomposes the error structure in the utility of alternatives so as to identify the individual influence in collective decisions. This approach to choice data analysis is new to environmental economics.     

Warm glow from green power: Evidence from Australian electricity consumers

Green electricity products are increasingly made available to consumers in many countries in order to address a number of environmental and social concerns. Most of the literature on this green electricity market focuses on consumers’ characteristics and product attributes that could affect participation. However, the contribution of this environmental consumerism to the overall environmental good does not depend on participation alone. The real impact relies on market participation for green consumers (the proportion of green consumers) combined with the level of green consumption intensity – the commitment levels, or proportion of consumption that is green. We design an online interface that closely mimics the real market decision environment for electricity consumers in Western Australia and use an error component model to analyze consumers’ choice of green electricity products and their commitment levels. We show that product attributes have limited impact on the choice of green products; however, there is still great potential for better participation by improving the design of green electricity programs. When green products are selected, most respondents select the minimum commitment possible, and this is insensitive to the premium being charged on green power, suggesting that we are largely observing a buy-in ‘warm glow’ for carbon mitigation.     

Designing policy incentives for cleaner technologies: Lessons from California's plug-in electric vehicle rebate program

We assess the performance of alternative rebate designs for plug-in electric vehicles. Based on an innovative vehicle choice model, we simulate the performance of rebate designs that vary in terms of vehicle technologies, consumer income eligibility, and caps on the price of vehicles eligible for subsidies. We compare these alternatives in terms of 1) the number of additional plug-in electric vehicles purchased, 2) cost-effectiveness per additional vehicle purchase induced, 3) total program cost, and 4) the distribution of rebate funding across consumer income classes. Using the status quo rebate policy in California as a reference case, we identify two alternative types of designs that are superior along all four performance criteria.     

Land-use choices: the case of conservation reserve program (CRP) re-enrollment in Kansas,USA

Among the important alternatives for land conservation is the US Conservation Reserve Program (CRP) that celebrated its 30th anniversary in 2015. This paper explores how landowners decide on alternative land-use choices made available by the expiration of CRP contracts in Kansas. The study uses survey data and multinomial Logit models to predict land-use choices. Two models were tested. The first model does not incorporate variables concerning farmer perceptions and attitudes about land-use choices, while the second model does. The results show that CRP re-enrollment depends on factors, such as years of experience in cropping and percent of cropland irrigated. However, when perception variables are added, the models become more robust in explaining other land choice alternatives. The results suggest that as the perception of unfairness of more inflexible environmental policy rises, these farmers may be more likely to re-enroll their marginal land in the CRP program.     

Choice set formation for outdoor destinations: The role of motivations and preference discrimination in site selection for the management of public expenditures on protected areas

Effective public expenditure currently dominates the management focus of many protected areas. This calls for explicit modeling of constraints and motivations that, respectively, obstruct and stimulate visits to selected outdoor destinations. Choice set formation is the result of screening and/or inclusion of specific sites (alternatives) to form the set of sites considered in real choices. Evidence shows that the omission of a structural representation of choice set formation is harmful to econometric inference. Yet, the literature has largely ignored the underlying behavioral phenomenon. We show, using a discrete choice experiment involving selection among seven recreational sites in an Italian national park, that choice set formation is behaviorally relevant, even after controlling for preference discrimination. Motivations (why visit?) are important determinants of preliminary site screening for choice set inclusion, as well as site selection, justifying the additional value of such modeling extension.     

Designs with a priori information for nonmarket valuation with choice experiments: A Monte Carlo study

Good practice in experimental design is essential for choice experiments used in nonmarket valuation. We review the practice of experimental design for choice experiments in environmental economics and we compare it with advances in experimental design. We then evaluate the statistical efficiency of four different designs by means of Monte Carlo experiments. Correct and incorrect specifications are investigated with gradually more precise information on the true parameter values. The data generating process (DGP) is based on estimates from data of a real study. Results indicate that D-efficient designs are promising, especially when based on Bayesian algorithms with informative prior. However, if good quality a priori information is lacking, and if there is strong uncertainty about the real DGP—conditions which are quite common in environmental valuation—then practitioners might be better off with shifted designs built from conventional fractional factorial designs for linear models.     

How wrong can you be? Implications of incorrect utility function specification for welfare measurement in choice experiments

Despite the vital role of the utility function in welfare measurement, the implications of working with incorrect utility specifications have been largely neglected in the choice experiments literature. This paper addresses the importance of specification with a special emphasis on the effects of mistaken assumptions about the marginal utility of income. Monte Carlo experiments were conducted using different functional forms of utility to generate simulated choices. Multi-Nomial Logit and Mixed Logit models were then estimated on these choices under correct and incorrect assumptions about the true, underlying utility function. Estimated willingness to pay measures from these choice modeling results are then compared with the equivalent measures directly calculated from the true utility specifications. Results show that for the parameter values and functional forms considered, a continuous-quadratic or a discrete-linear attribute specification is a good option regardless of the true effects the attribute has on utility. We also find that mistaken assumptions about preferences over costs magnify attribute mis-specification effects.     

No evidence for female mate choice based on genetic similarity in the túngara frog Physalaemus pustulosus

In most sexually reproducing animals, the behavior of one or both sexes during courtship critically influences the success at mating of the opposite sex. This behavior is often interpreted as “mate choice,” and there is great interest in why such choices are exercised. The explanation for the evolution of mate choice that has received the most attention and generated the most controversy is based on assumed genetic effects. In this study, we investigated whether female túngara frogs, which choose mates based on acoustic cues, have a preference for genetically less related males. Specifically, we determine if there is disassortive mating based on microsatellite markers, if there is information in the advertisement call that could be used to assess genetic similarity, and if females exhibit acoustic-based mating preferences that would promote choice for genetic diversity. Using seven microsatellite markers, we found no correlation of male call similarity and male genetic relatedness. Female choice experiments showed no female preference for calls of less related males, and there was no evidence for inbreeding avoidance in the field. Our results do not support the hypothesis of mate choice based on information about genetic relatedness conveyed by acoustic signals in túngara frogs.     

Using virtual environments to improve the realism of choice experiments: A case study about coastal erosion management

Choice experiment surveys are commonly used to assess the general public׳s willingness to pay for different levels of environmental quality. However, respondents need to understand what they are valuing or they will make potentially wrong assumptions based on different experiences and frames of reference. Three-dimensional computer generated models or Virtual Environments (VE) have so far seen little use in economics research, probably due to the complexity and cost of developing and delivering them to study participants. The few studies that have used them find that VE are superior to static image presentations in helping people evaluate complex data. For this study we developed virtual environments for a choice experiment about coastal erosion management using free, easy-to-use software and Google Earth© satellite imagery and presented these to respondents as video tours. Our results indicate that the VE treatment reduced choice error, reduced left-right bias and improved respondent engagement and retention when compared with static images. There were also differences in WTP between the two groups.     

A Pragmatic Approach to Grizzly Bear Conservation

Progress in grizzly bear ( Ursus arctos horribilis ) conservation in the Rocky Mountains of Canada and the United States is urgently needed. Human-caused mortality is the appropriate focal point for understanding the problem. This issue has a number of dimensions, but the human dimensions are by far the most complex and difficult to analyze. Conducting analyses and implementing conservation plans at the site or local level makes optimal use of humans' limited cognitive capabilities. Neither maintaining the status quo in grizzly bear conservation nor relying solely on major reform is a viable strategy. Instead, concerned people should take a pragmatic approach to developing innovative processes for forming reason-based public opinions that in turn inform effective public policies. There are many benefits to such an approach and, given the lack of viable alternatives, it should be tested with a pilot project by the appropriate people and organizations.     

Subjective modeling choices and the robustness of impact evaluations in conservation science

Arbitrary modeling choices are inevitable in scientific studies. Yet, few empirical studies in conservation science report the effects these arbitrary choices have on estimated results. I explored the effects of subjective modeling choices in the context of counterfactual impact evaluations. Over 5000 candidate models based on reasonable changes in the choice of statistical matching algorithms (e.g., genetic and nearest distance mahalanobis matching), the parametrization of these algorithms (e.g., number of matches), and the inclusion of specific covariates (e.g., distance to nearest city, slope, or rainfall) were valid for studying the effect of Virunga National Park in Democratic Republic of the Congo on changes in tree cover loss and carbon storage over time. I randomly picked 2000 of the 5000 candidate models to determine how much and which subjective modeling choices affected the results the most. All valid models indicated that tree cover loss decreased and carbon storage increased in Virunga National Park from 2000 to 2019. Nonetheless, the order of magnitude of the estimates varied by a factor of 3 (from −4.78 to −13.12 percentage points decrease in tree cover loss and from 20 to 46 t Ce/ha for carbon storage). My results highlight that modeling choices, notably the choice of the matching algorithm, can have significant effects on point estimates and suggest that more structured robustness checks are a key step toward more credible findings in conservation science.     

Genuine saving rate: An integrated indicator to measure urban sustainable development towards an ecocity

The construction of an ecocity is gradually gaining attention as an indicator of sustainable development. Genuine saving rate (GSR), which takes account of various impacts of economic activities including depletion of natural resources, costs of environmental pollution and long-term environmental damage, can be used as an integrated indicator to measure the status quo and potential of sustainability for an ecocity. This paper discusses the concept of an ecocity; and analyses the time-series of GSR in Suzhou between 1991–2001 as a case study used to develop a standard method of measuring sustainability. The status quo and trends in urban sustainability in six case study cities in China are then evaluated and compared. The results show the current status: Suzhou (23.6%), Guangzhou(18.9%), Ningbo (14.7%), Yantai (13.1%), Yangzhou (11.7%) and Sanming (7.9%). The study demonstrates that GSR provides not only a linkage by which local governmental departments for resources management, environmental protection, finance and planning can be connected directly, but also an effective analytical tool for the planning and construction of an ecocity as well as decision-making support for local governments.     

Much ado about nothings: using zero similarity points in distance-decay curves

Distance decay is used to describe the (usually exponential) decay in ecological similarity of assemblages between two sites as a function of their distance apart along an environmental gradient. Exponential distance-decay curves are routinely fitted by calculating the ecological similarity between each pair of sites, and fitting a linear regression to the points on a scatter plot of log-similarity vs. distance (x-axis). However, pairs of sites where the assemblages have no species in common pose a problem, because the similarity is zero, and the log transformation cannot be applied. Common fixes to this problem (i.e., either removing or transforming the zero values) are shown to have undesirable consequences and to give widely disparate estimates. A new method is presented as a special case of a generalized dissimilarity model. It is fitted very quickly and easily using existing software, and it does not require removal or transformation of the zero similarity points. Its simplicity makes it convenient for use in conjunction with the resampling methods that are routinely employed to test hypotheses, to obtain standard errors of estimated parameters, or to compare distance-decay curves. A word of caution about standard application of the bootstrap is noted, and modified bootstrap and jackknife alternatives are demonstrated.     

Who counts in evaluating the effects of air pollution policies on households? Non-market valuation in the presence of dependencies

Individuals who are likely to realize the largest benefits from improvements in air quality often depend on other members of their households to make time or monetary contributions to their care. The presence of these dependency relationships among household members poses challenges for benefit estimation since it is unlikely that the conditions necessary for recovering the underlying individual preferences from household choices are satisfied in this setting. We propose a conceptual framework that highlights the role of these dependencies in the choice models used to estimate the willingness to pay for environmental quality improvements. We design a complementary stated preference survey that describes hypothetical dependency relationships for household members of different ages to test the implications of our conceptual model. Respondents' stated choices take into account the proposed care-giving responsibilities for young children and teenagers but not for older adults.     

Conservation lessons from taboos and trolley problems

Governments pass conservation laws, adopt policies, and make plans yet frequently fail to implement them. Implementation of conservation, however, often requires costly sacrifice: people foregoing benefit for the benefit of biodiversity. Decisions involve trade-offs with outcomes that depend on the values at stake and people's perceptions of those values. Psychology, ethics, and behavioral science have each addressed the challenge of making difficult, often tragic, trade-off decisions. Based on these literatures, values can be classified as secular or sacred, where sacred values are those for which compensation may be unthinkable (e.g., freedom). Taboo trade-offs emerge when secular values are pitted against sacred ones. These are difficult to discuss, much less negotiate. Confronting taboo trade-offs in conservation may require discursive approaches to better understand particular attributes of decisions that place sacred human values at risk. Tragic trade-offs emerge when sacred values are pitted against one another. The trolley problem—a forced choice between 2 unthinkable outcomes—is a simple heuristic illustrating ethical challenges of tragic trade-offs. Behavior studies illustrate that people have a strong aversion to losses where an active choice was made, resulting in a bias toward status quo decisions. Faced with tragic, trolley-problem-like choices, people tend to avoid taking responsibility for action, defer decisions, evade opinions on painful choices, and regret unfortunate outcomes of actions. To help close the implementation gap, conservation actors may need to directly address the psychological, ethical, and behavioral barriers created by the remorse, regret, and moral residue of implementing conservation choices that have tragic outcomes. Recognition of these predictable features of the human psyche may foster better administrative structures to support action with durable outcomes as well as new research directions.     

Trait similarity patterns within grass and grasshopper communities: multitrophic community assembly at work

Trait-based community assembly theory suggests that trait variation among co-occurring species is shaped by two main processes: abiotic filtering, important in stressful environments and promoting similarity, and competition, more important in productive environments and promoting dissimilarity. Previous studies have indeed found trait similarity to decline along productivity gradients. However, these studies have always been done on single trophic levels. Here, we investigated how interactions between trophic levels affect trait similarity patterns along environmental gradients. We propose three hypotheses for the main drivers of trait similarity patterns of plants and herbivores along environmental gradients: (1) environmental control of both, (2) bottom-up control of herbivore trait variation, and (3) top-down control of grass trait variation. To test this, we collected data on the community composition and trait variation of grasses (41 species) and grasshoppers (53 species) in 50 plots in a South African savanna. Structural equation models were used to investigate how the range and spacing of within-community functional trait values of both grasses and their insect herbivores (grasshoppers; Acrididae) respond to (1) rainfall and fire frequency gradients and (2) the trait similarity patterns of the other trophic level. The analyses revealed that traits of co-occurring grasses became more similar toward lower rainfall and higher fire frequency (environmental control), while showing little evidence for top-down control. Grasshopper trait range patterns, on the other hand, were mostly directly driven by vegetation structure and grass trait range patterns (bottom-up control), while environmental factors had mostly indirect effects via plant traits. Our study shows the potential to expand trait-based community assembly theory to include trophic interactions.     

Female choice in the guppy (Poecilia reticulata): the interaction between male color and display

The effect of two components of male courtship, color and display behavior, on female choice of mates was investigated in the guppy (Poecilia reticulata). Computer-modified videos were constructed to determine the relative importance of a static trait, the presence or absence of carotenoid pigment (C and NC), and a dynamic trait, high and low display rate (HD and LD), on female response. Females were given a choice between all combinations of male display and color in a binary choice design. Preference was determined by the time females spent visually inspecting the animation. Females preferred animations with high display rates when both animations displayed color (CHD vs CLD), but not in the absence of color (NCHD vs NCLD). Equal numbers of females chose the color/low-display animation and the no-color/high-display animation when the two were paired. Conversely, color became a criterion of choice when both animations showed a low display rate (CLD vs NCLD), but not when both displayed at a high rate (CHD vs NCHD). These results suggest that females use both static and dynamic traits to evaluate males, but their rankings are affected by the choices available. Results of these experiments provide insights into how females use multiple traits to assess males.     

Conservation implications of anthropogenic impacts on visual communication and camouflage

Anthropogenic environmental impacts can disrupt the sensory environment of animals and affect important processes from mate choice to predator avoidance. Currently, these effects are best understood for auditory and chemosensory modalities, and recent reviews highlight their importance for conservation. We examined how anthropogenic changes to the visual environment (ambient light, transmission, and backgrounds) affect visual communication and camouflage and considered the implications of these effects for conservation. Human changes to the visual environment can increase predation risk by affecting camouflage effectiveness, lead to maladaptive patterns of mate choice, and disrupt mutualistic interactions between pollinators and plants. Implications for conservation are particularly evident for disrupted camouflage due to its tight links with survival. The conservation importance of impaired visual communication is less documented. The effects of anthropogenic changes on visual communication and camouflage may be severe when they affect critical processes such as pollination or species recognition. However, when impaired mate choice does not lead to hybridization, the conservation consequences are less clear. We suggest that the demographic effects of human impacts on visual communication and camouflage will be particularly strong when human‐induced modifications to the visual environment are evolutionarily novel (i.e., very different from natural variation); affected species and populations have low levels of intraspecific (genotypic and phenotypic) variation and behavioral, sensory, or physiological plasticity; and the processes affected are directly related to survival (camouflage), species recognition, or number of offspring produced, rather than offspring quality or attractiveness. Our findings suggest that anthropogenic effects on the visual environment may be of similar importance relative to conservation as anthropogenic effects on other sensory modalities.