A choice experiment analysis for solid waste disposal option: a case study in Malaysia

In Malaysia, most municipal wastes currently are disposed into poorly managed 'controlled tipping' systems with little or no pollution protection measures. This study was undertaken to assist the relevant governmental bodies and service providers to identify an improved waste disposal management strategy. The study applied the choice experiment technique to estimate the nonmarket values for a number of waste disposal technologies. Implicit prices for environmental attributes such as psychological fear, land use, air pollution, and river water quality were estimated. Compensating surplus estimates incorporating distance from the residences of the respondents to the proposed disposal facility were calculated for a number of generic and technology-specific choice sets. The resulting estimates were higher for technology-specific options, and the distance factor was a significant determinant in setting an equitable solid waste management fee.     

Valuing improvements to threatened and endangered marine species: an application of stated preference choice experiments

Non-market valuation research has produced value estimates for over forty threatened and endangered (T&E) species, including mammals, fish, birds, and crustaceans. Increasingly, Stated Preference Choice Experiments (SPCE) are utilized for valuation, as the format offers flexibility for policy analysis and may reduce certain types of response biases relative to the more traditional Contingent Valuation method. Additionally, SPCE formats can allow respondents to make trade-offs among multiple species, providing information on the distinctiveness of preferences for different T&E species. In this paper we present results of an SPCE involving three U.S. Endangered Species Act (ESA)-listed species: the Puget Sound Chinook salmon, the Hawaiian monk seal, and the smalltooth sawfish. We estimate willingness-to-pay (WTP) values for improving each species' ESA listing status and statistically compare these values between the three species using a method of convolutions approach. Our results suggest that respondents have distinct preferences for the three species, and that WTP estimates differ depending on the species and the level of improvement to their ESA status. Our results should be of interest to researchers and policy-makers, as we provide value estimates for three species that have limited, if any, estimates available in the economics literature, as well as new information about the way respondents make trade-offs among three taxonomically different species.     

Charging for Nature: Marine Park Fees and Management from a User Perspective

User fees can contribute to the financial sustainability of marine protected areas (MPAs), yet they must be acceptable to users. We explore changes in the fee system and management of Bonaire National Marine Park (BNMP) from the perspective of users. Responses from 393 tourists indicated that 90% were satisfied with park conditions and considered current user fees reasonable. However, only 47% of divers and 40% of non-divers were prepared to pay more. Diver willingness-to-pay (WTP) appears to have decreased since 1991, but this difference could be due in part to methodological differences between studies. Although current fees are close to diver maximum stated WTP, revenues could potentially be increased by improving the current fee system in ways that users deem acceptable. This potential surplus highlights the value of understanding user perceptions toward MPA fees and management.     

Bridging the gap between laboratory experiments and naturally occurring markets: An inferred valuation method

Several recent studies have found important differences between behavior in the laboratory and the field. We explore two possible causes for the divergence: social concerns and unfamiliarity with the traded good. Consistent with our conceptual model, we find that people overstated their preferences for relatively familiar goods with normative attributes and understated their preferences for a relatively unfamiliar good with low normative motivations in the laboratory as compared to the field. We also find that for goods with a normative dimension, a new method we refer to as inferred valuation has the potential to narrow the lab–field gap. In some cases, willingness-to-pay obtained from a conventional valuation elicitation method is more than twice the value from the new inferred valuation approach.     

A calibrated auction-conjoint valuation method: Valuing pork and eggs produced under differing animal welfare conditions

This paper develops a valuation method which generates consistent and systematic estimates of people's preferences for complex multi-attribute goods by inextricably linking auction bids with conjoint ratings. The advantage of the valuation approach is that it permits the estimation of people's values for many potential goods, allows one to decompose people's values for a good into its sub-components, and permits the study of preference heterogeneity without distributional assumptions. We apply the method to an important and increasingly controversial topic: animal welfare. The method is used to determine people's preferences for eggs and pork produced from different production systems. Data from experiments conducted in three diverse U.S. locations (Chicago, IL; Dallas, TX; and Wilmington, NC) indicates that people are, on average, willing to pay $0.95 more for a dozen eggs raised in an aviary, pasture system vs. a cage system, and are willing to pay $2.02 more for two-pounds of pork chops raised in a pasture system as opposed to a crate system.     

Evaluating the PM damage cost due to urban air pollution and vehicle emissions in Seoul, Korea

This study evaluated the prospective damage costs of PM(2.5) inhalation. We performed a health risk assessment based on an exposure-response function to estimate the annual population risk in the Seoul metropolitan city, Korea. Also, we estimated a willingness-to-pay (WTP) amount for reducing the mortality rate in order to evaluate a statistical life value. We combined the annual population risk and the value-of-statistical-life to calculate the damage cost estimate. In the health risk assessment, we applied the PM(2.5) relative risk to evaluate the annual population risk. We targeted an exposure population of 5,401,369 persons who were over the age of 30. Using a Monte-Carlo simulation for uncertainty analysis, we estimated that the population risk of PM(2.5) inhalation during a year in Seoul is 2181 premature deaths for acute exposure and 18,510 premature deaths for chronic exposure. The monthly average WTP for 5/1000 mortality reduction over ten years is $20.20 USD (95% C.I: $16.60-24.50) and the implied value-of-statistical-life (VSL) is $485,000 USD (95% C.I: $398,000-588,000). The damage cost estimate due to risk from PM(2.5) inhalation in Seoul is about $1057 million USD per year for acute exposure, and $8972 million USD per year for chronic exposure. It is important to note that this cost estimate does not reflect all health damage cost estimates in this urban area. This recommendation is a model for evaluating a mortality risk reduction and as such we must re-evaluate an integrated application of morbidity risk.     

Valuation of improved air quality in Utah County,USA

A contingent valuation approach was used to estimate maximum willingness-to-pay for improved air quality in Utah County. Respondents demonstrated a high rate of concern over poor air quality and averaged a willingness-to-pay of $37 per month per household. Noniterative openended questions were used successfully. No information bias was observed but benchmark values did influence bids. Willingness-to-pay for improved air quality was large for both sexes and across all income groups, ages, and occupations.     

Is there a trade-off between households’ precautions,mitigations and public protection for flood risk?

This paper evaluates willingness-to-pay (WTP) for flood insurance and floodgate installation in Tainan, Taiwan, and finds that household flood precaution (observing the water level) has a minor effect in terms of increasing the WTP for flood insurance, rather than decreasing it. The reason for this is that people who have public flood protection nearby do not lower their WTP for floodgate and insurance, and those who live near the water source of floods and exhibit precautionary behavior have higher risk perceptions and intend to pay more. The adopted mitigation (having sandbags or other barriers) will not affect the intention to further mitigate or buy insurance. This also means that adverse selection in relation to flood insurance is not serious in the flood-prone area of Tainan. Households may be aware of the limitation of public flood protection though the precautionary behavior, and found that flood insurance can compensate for most of the flood damage.     

Willingness to pay for agricultural flood insurance in the Mekong River Delta

Increasing urbanization and industrial development upstream of the Mekong River Delta of Vietnam (MRD) including the construction of a series of dams for hydroelectricity generation is changing the downstream risk of flooding. Concerns about the likely influence of global climate change and rising sea levels add further uncertainty to this risk that threatens the livelihood of farmers. With this in mind and in view of the under-developed state of the market for crop insurance in the MRD, we survey rice growers to explore their willingness-to-pay (WTP) for crop insurance by using a choice experiment. The experimental design comprised five attributes, including the type of peril covered – riverine flooding (flooding); flooding triggered by tidal regimes (inundation); or flooding, inundation and wind damage – type of provider; extent of cover and deductible and premium. Two hundred and twenty-six rice-growing farmers were surveyed with each farmer responding to six different choices. Our study shows that WTPs for an insurance plan covering a loss up to 2 million VND/1000m²/farming season and having a deductible of 25% of the potential (profit) crop value varied between 200,000 and 500,000?VND/1000m² (1USD?=?22,550 Vietnamese Dong – VND) for each rice growing season, implying a potential market for crop insurance.