Willingness to Pay for Quality Improvements: Should Revealed and Stated Preference Data Be Combined?

In this article we propose theoretically consistent welfare measurement of use and nonuse values for an improvement in environmental quality with revealed and stated preference data. An analytical model based on the comparative static analysis of the variation function that describes the relationship between recreation demand and dichotomous choice contingent valuation models is estimated. Our results show that revealed and stated data should not be combined under the same assumed preference structure unless the two decisions imply the same change in behavior induced by the quality change. In addition, our results indicate scope effects in willingness to pay measures estimated with stated preference data.     

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.     

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.     

Ordering effects and choice set awareness in repeat-response stated preference studies

We present an experiment designed to investigate the presence and nature of ordering effects within repeat-response stated preference (SP) studies. Our experiment takes the form of a large sample, full-factorial, discrete choice SP exercise investigating preferences for tap water quality improvements. Our study simultaneously investigates a variety of different forms of position-dependent and precedent-dependent ordering effect in preferences for attributes and options and in response randomness. We also examine whether advanced disclosure of the choice tasks impacts on the probability of exhibiting ordering effects of those different types. We analyze our data both non-parametrically and parametrically and find robust evidence for ordering effects. We also find that the patterns of order effect in respondents' preferences are significantly changed but not eradicated by the advanced disclosure of choice tasks a finding that offers insights into the choice behaviors underpinning order effects.     

Static modeling of dynamic recreation behavior: Implications for prediction and welfare estimation

This paper examines the consequences of using a static model of recreation trip-taking behavior when the underlying decision problem is dynamic. Specifically we examine the implications for trip forecasting and welfare estimation using a panel dataset of Lake Michigan salmon anglers for the 1996 and 1997 fishing seasons. We derive and estimate both a structural dynamic model using Bellman's equation, and a reduced-form static model with trip probability expressions mimicking those of the dynamic model. We illustrate an inherent identification problem in the reduced-form model that creates biased welfare estimates, and we discuss the general implications of this for the interpretation of preference parameters in static models. We then use both models to simulate trip taking behavior and show that although their in-sample trip forecasts are similar, their welfare estimates and out-of-sample forecasts are quite different.     

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.     

Confronting Uncertainty and Missing Values in Environmental Value Transfer as Applied to Species Conservation

Abstract: The nonuse (or passive) value of nature is important but time‐consuming and costly to quantify with direct surveys. In the absence of estimates of these values, there will likely be less investment in conservation actions that generate substantial nonuse benefits, such as conservation of native species. To help overcome decisions about the allocation of conservation dollars that reflect the lack of estimates of nonuse values, these values can be estimated indirectly by environmental value transfer (EVT). EVT uses existing data or information from a study site such that the estimated monetary value of an environmental good is transferred to another location or policy site. A major challenge in the use of EVT is the uncertainty about the sign and size of the error (i.e., the percentage by which transferred value exceeds the actual value) that results from transferring direct estimates of nonuse values from a study to a policy site, the site where the value is transferred. An EVT is most useful if the decision‐making framework does not require highly accurate information and when the conservation decision is constrained by time and financial resources. To account for uncertainty in the decision‐making process, a decision heuristic that guides the decision process and illustrates the possible decision branches, can be followed. To account for the uncertainty associated with the transfer of values from one site to another, we developed a risk and simulation approach that uses Monte Carlo simulations to evaluate the net benefits of conservation investments and takes into account different possible distributions of transfer error. This method does not reduce transfer error, but it provides a way to account for the effect of transfer error in conservation decision making. Our risk and simulation approach and decision‐based framework on when to use EVT offer better‐informed decision making in conservation.     

Quantifying Preferences for the Natural World Using Monetary and Nonmonetary Assessments of Value

Given that funds for biodiversity conservation are limited, there is a need to understand people's preferences for its different components. To date, such preferences have largely been measured in monetary terms. However, how people value biodiversity may differ from economic theory, and there is little consensus over whether monetary metrics are always appropriate or the degree to which other methods offer alternative and complementary perspectives on value. We used a choice experiment to compare monetary amounts recreational visitors to urban green spaces were willing to pay for biodiversity enhancement (increases in species richness for birds, plants, and aquatic macroinvertebrates) with self‐reported psychological gains in well‐being derived from visiting the same sites. Willingness‐to‐pay (WTP) estimates were significant and positive, and respondents reported high gains in well‐being across 3 axes derived from environmental psychology theories (reflection, attachment, continuity with past). The 2 metrics were broadly congruent. Participants with above‐median self‐reported well‐being scores were willing to pay significantly higher amounts for enhancing species richness than those with below‐median scores, regardless of taxon. The socio‐economic and demographic background of participants played little role in determining either their well‐being or the probability of choosing a paying option within the choice experiment. Site‐level environmental characteristics were only somewhat related to WTP, but showed strong associations with self‐reported well‐being. Both approaches are likely to reflect a combination of the environmental properties of a site and unobserved individual preference heterogeneity for the natural world. Our results suggest that either metric will deliver mutually consistent results in an assessment of environmental preferences, although which approach is preferable depends on why one wishes to measure values for the natural world. Preferencias de Cuantificación para el Mundo Natural Usando Estudios de Valor Monetario y No Monetario.     

Unraveling the complexities of variation in female mate preference for vertical bars in the swordtail, Xiphophorus cortezi

Investigations into the nature of mate choice suggest that variation in female mate preferences is often context dependent, varying in response to genetic and environmental influences on female condition as well as to external environmental stimuli. Determining whether variation in female mate preference is adaptive requires understanding the variables involved that produce this variation and how they interact. Comparative, multivariate studies of wild-caught adult females can be used as initial assessments of variation in female mate preferences, providing valuable insights into the parameters that influence female preferences under natural conditions. We examined variation in female preferences for the pigment pattern vertical bars across five populations of the swordtail, Xiphophorus cortezi. The populations we examined are genetically differentiated and varied in the frequency of males and females with bars. We also considered a variable indicative of within-individual variation (size, as influenced by age) and a variable that varies across individuals (genotype for vertical bars: barred or barless). Using Akaike information criterion, all candidate models explaining variation in strength of preference included female bar state, female size, and population. We suggest that a combination of genetic (bar state) and environmental (female size) conditions influenced how they responded to experience with both male phenotypes in X. cortezi. Future studies should examine the possibility that barred and barless females respond differently over an environmental gradient.     

Models-as-usual for unusual risks? On the value of catastrophic climate change

We study the role of intertemporal preference representations in a model of economic growth, stock pollutant and endogenous risk of catastrophic collapse. We contrast two polar instances of risk-sensitive preferences: the traditional “discounted utility” model, which imposes a positive rate of pure time preference and risk neutrality with respect to intertemporal utility, and multiplicatively separable preferences, which display risk aversion in that dimension but no pure time preferences. We show that both representations of preferences can rationalize the same economy when there is no collapse risk associated with pollution. Once we introduce a collapse risk whose hazard rate depends on the pollution stock, multiplicatively separable preferences are associated with a much higher value of catastrophic risk reduction, and a more stringent policy response. A relatively high discount rate may thus be compatible with large emissions abatement in the face of a low probability large impact event, reflecting preferences for catastrophic risk reduction.     

Sources of variation in herbivore preference: among-individual and past diet effects on amphipod host choice

Understanding which factors affect the feeding preferences of herbivores is essential for predicting the effects of herbivores on plant assemblages and the evolution of plant–herbivore interactions. Most studies of marine herbivory have focussed on the plant traits that determine preferences (especially secondary metabolites), while few studies have considered how preferences may vary among individual herbivores due to genetic or environmental sources of variation. Such intraspecific variation is essential for evolutionary change in preference behaviour and may alter the outcome of plant–herbivore interactions. In an abundant marine herbivore, we determined the relative importance of among-individual and environmental effects on preferences for three host algae of varying quality. Repeated preference assays were conducted with the amphipod Peramphithoe parmerong and three of its brown algal hosts: Sargassum linearifolium, S. vestitum and Padina crassa. We found no evidence that preference varied among individuals, thus constraining the ability of natural selection to promote increased specialisation on high-quality S. linearifolium. Most of the variation in preference occurred within individuals, with amphipod preferences strongly influenced by past diet. The increased tendency for amphipods to select alternate hosts to that on which they had been recently feeding indicates that amphipods are actively seeking mixed diets. Such a feeding strategy provides an explanation for the persistence of this herbivore on hosts in the field that support poor growth and survival if consumed alone. The effects of past diet indicate that herbivore preferences are a function of herbivore history in addition to plant traits and are likely to vary with the availability of algae in space and time.     

Demand for environmental policies to improve health: Evaluating community-level policy scenarios

Using a national survey and a discrete choice experiment format, we estimate demand for environmental polices to improve health. We use a richly detailed community-level approach that describes illnesses avoided, premature deaths avoided, policy duration, and the affected population size. We allow preferences for policy attributes to vary systematically with the scenario design, with the source of risk and type of health threat, and with respondent characteristics. Using a willingness to pay (WTP) framework similar to that used for studies of individual risk, we find that omission of illness information leads to an upward bias in estimates of the value of avoided premature deaths and that individuals view avoided deaths and avoided illnesses as substitutes. We also find evidence of strongly diminishing marginal utility in policy scope. Differences in marginal WTP from different sources of risk or types of illness appear very small relative to differences associated with respondent characteristics and/or perceptions. Self-interest strongly dominates altruistic considerations.     

The endowment effect,discounting and the environment

There is a considerable body of evidence showing that our preferences exhibit both reference dependence and loss aversion, a.k.a. the endowment effect. In this paper, we consider the implications of the endowment effect for discounting, with a special focus on discounting future improvements in the environment. We show that the endowment effect modifies the discount rate via (i) an instantaneous endowment effect and (ii) a reference-updating effect. Moreover we show that these two effects often combine to dampen the preference to smooth consumption over time. What this implies for discounting future environmental benefits may then depend critically on whether environmental quality is merely a factor of production of material consumption, or whether it is an amenity. On an increasing path of material consumption, dampened consumption smoothing implies a lower discount rate. But on a declining path of environmental quality and where we derive utility directly from environmental quality, it implies a higher discount rate. On non-monotonic paths, loss aversion specifically can give rise to substantial discontinuities in the discount rate.     

Female preferences for multiple attributes in the acoustic signals of the Italian treefrog, <Emphasis Type="Italic">Hyla intermedia</Emphasis>

The advertisement call of frogs and toads is an example of multiple message signal because different acoustic properties encode different kinds of biologically significant information. In the Italian treefrog, Hyla intermedia, pulse rate and frequency have been found to be under stabilizing female preferences and to encode information important for mate recognition, whereas the number of calls per call group have been found to be under directional preferences and, thus, to be important for mate quality assessment. In this study, we investigate preferences for calls that differ simultaneously in frequency, pulse rate, and number of calls per call group, and we ask how these properties interact with each other in influencing female mating decisions. Results of two-choice phonotaxis experiments provide no evidence to support the hypothesis that females process multi-attribute signals in a hierarchical way. In contrast, the pattern of preferences is consistent with the ‘preference function’ hypothesis, that is, with the hypothesis that females rank signals along an ordinal scale of values and choose accordingly. Pulse rate and frequency influence mating preferences more than does the number of calls per call group. The interaction between pulse rate and frequency is not additive but multiplicative: small differences in either pulse rate or frequency that, alone, have no effects on female choice, interact synergistically so that their combination has strong influence on female preferences. A preference repeatability test shows strong among-female differences in preference for multi-attribute signals. We suggest that this result reveals not only a variation in attribute values among females, but also a variation in the way females weight and combine attribute values into a single preference score.     

Static modeling of dynamic recreation behavior: Implications for prediction and welfare estimation

This paper examines the consequences of using a static model of recreation trip-taking behavior when the underlying decision problem is dynamic. Specifically we examine the implications for trip forecasting and welfare estimation using a panel dataset of Lake Michigan salmon anglers for the 1996 and 1997 fishing seasons. We derive and estimate both a structural dynamic model using Bellman's equation, and a reduced-form static model with trip probability expressions mimicking those of the dynamic model. We illustrate an inherent identification problem in the reduced-form model that creates biased welfare estimates, and we discuss the general implications of this for the interpretation of preference parameters in static models. We then use both models to simulate trip taking behavior and show that although their in-sample trip forecasts are similar, their welfare estimates and out-of-sample forecasts are quite different.     

The role of information in mate-choice copying in female sailfin mollies (Poecilia latipinna)

Female mate choice is a complex process involving both genetic and social factors. Extrinsic cues may play a role in determining how these factors interact. Mate-choice copying is a socially influenced mate-choice strategy in which females observe other females during mate choice and choose the same male as those females. Previous studies have shown that female sailfin mollies (Poecilia latipinna) prefer larger over smaller males, and this preference is assumed to be genetically based. In this study we tested, first, whether sailfin molly females changed their mate preference in favour of smaller males when they could obtain more information by observing two model females sequentially for 5 min each or one model female for 20 min next to the smaller male. Second, we tested if females that had changed their preferences in favour of smaller males maintained this learned preference afterwards. In copying experiments, females changed their preferences in favour of smaller males both when they could observe two model females each for 5 min near by a smaller male and when they could observe one model female for 20 min near the smaller male. In the latter case, females maintained this learned preference for smaller males up to 5 weeks after the copying experiment. This shows that mate-choice copying has a long-lasting effect on mate-choice decisions in sailfin molly females and that mate-choice copying can serve as a mechanism for cultural inheritance of mate preferences in females.     

Testing hypotheses in evolutionary ecology with imperfect detection: capture-recapture structural equation modeling

Studying evolutionary mechanisms in natural populations often requires testing multifactorial scenarios of causality involving direct and indirect relationships among individual and environmental variables. It is also essential to account for the imperfect detection of individuals to provide unbiased demographic parameter estimates. To cope with these issues, we developed a new approach combining structural equation models with capture-recapture models (CR-SEM) that allows the investigation of competing hypotheses about individual and environmental variability observed in demographic parameters. We employ Markov chain Monte Carlo sampling in a Bayesian framework to (1) estimate model parameters, (2) implement a model selection procedure to evaluate competing hypotheses about causal mechanisms, and (3) assess the fit of models to data using posterior predictive checks. We illustrate the value of our approach using two case studies on wild bird populations. We first show that CR-SEM can be useful to quantify the action of selection on a set of phenotypic traits with an analysis of selection gradients on morphological traits in Common Blackbirds (Turdus merula). In a second case study on Blue Tits (Cyanistes caeruleus), we illustrate the use of CR-SEM to study evolutionary trade-offs in the wild, while accounting for varying environmental conditions.     

Using a Systematic Approach to Select Flagship Species for Bird Conservation

Conservation marketing campaigns that focus on flagship species play a vital role in biological diversity conservation because they raise funds and change people's behavior. However, most flagship species are selected without considering the target audience of the campaign, which can hamper the campaign's effectiveness. To address this problem, we used a systematic and stakeholder‐driven approach to select flagship species for a conservation campaign in the Serra do Urubu in northeastern Brazil. We based our techniques on environmental economic and marketing methods. We used choice experiments to examine the species attributes that drive preference and latent‐class models to segment respondents into groups by preferences and socioeconomic characteristics. We used respondent preferences and information on bird species inhabiting the Serra do Urubu to calculate a flagship species suitability score. We also asked respondents to indicate their favorite species from a set list to enable comparison between methods. The species’ traits that drove audience preference were geographic distribution, population size, visibility, attractiveness, and survival in captivity. However, the importance of these factors differed among groups and groups differed in their views on whether species with small populations and the ability to survive in captivity should be prioritized. The popularity rankings of species differed between approaches, a result that was probably related to the different ways in which the 2 methods measured preference. Our new approach is a transparent and evidence‐based method that can be used to refine the way stakeholders are engaged in the design of conservation marketing campaigns.     

Predators use environmental cues to discriminate between prey

The cognitive processes of predators play a central role in the evolution of prey characters. Numerous studies have shown that vertebrate predators may learn to associate the characteristics of prey (e.g. color) with the cost or benefit of ingesting them, thus forming preferences and aversions for different kinds of prey. Although the distribution and quality of prey types can differ between environmental contexts, which may make it profitable to attack a prey type in some contexts but not in others, the influence of environmental cues in decisions to attack has rarely been addressed. Recent theory suggests that modification of prey preferences by environmental cues such as microhabitat or temperature may influence the evolution of prey characteristics. Here, we show that the environmental foraging context may determine prey choice in great tits (Parus major) through learned association between the prey phenotype (appearance and palatability) and a contextual background cue. The same individuals were able to learn and maintain two different sets of food preferences and aversions for use in two different environmental contexts (aviaries with red or blue wooden boards), indicating a role for contextual learning in vertebrate foraging behavior.     

Do female association preferences predict the likelihood of reproduction?

Sexual selection acting on male traits through female mate choice is commonly inferred from female association preferences in dichotomous mate choice experiments. However, there are surprisingly few empirical demonstrations that such association preferences predict the likelihood of females reproducing with a particular male. This information is essential to confirm association preferences as good predictors of mate choice. We used green swordtails (Xiphophorus helleri) to test whether association preferences predict the likelihood of a female reproducing with a male. Females were tested for a preference for long- or short-sworded males in a standard dichotomous choice experiment and then allowed free access to either their preferred or non-preferred male. If females subsequently failed to produce fry, they were provided a second unfamiliar male with similar sword length to the first male. Females were more likely to reproduce with preferred than non-preferred males, but for those that reproduced, neither the status (preferred/non-preferred) nor the sword length (long/short) of the male had an effect on brood size or relative investment in growth by the female. There was no overall preference based on sword length in this study, but male sword length did affect likelihood of reproduction, with females more likely to reproduce with long- than short-sworded males (independent of preference for such males in earlier choice tests). These results suggest that female association preferences are good indicators of female mate choice but that ornament characteristics of the male are also important.