Uncovering context-induced status quo effects in choice experiments

In this study five design dimensions are varied systematically investigating context-induced status quo effects in choice experiments. Additionally, two structural complexity measures, entropy and the number of attribute level changes, are used to capture status quo effects from the similarity between alternatives and the number of trade-offs. A crucial finding is that the frequency of status quo choices is negatively associated with the number of alternatives indicating preference matching effects. By contrast, the probability of choosing the status quo increases with a higher number of choice tasks, a wider level range, and the similarity between alternatives. Status quo choices are further affected by the current environmental situation perceived by respondents. We also find that marginal and non-marginal welfare estimates are significantly affected by the choice design. One key finding is that the most used choice task format in environmental economics, i.e., two hypothetical and a status quo alternative, is likely to increase the propensity to choose the status quo option.     

Valuation of small and multiple health risks: A critical analysis of SP data applied to food and water safety

This study elicits individual risk preferences in the context of an infectious disease using choice experiments. A main objective is to examine scope sensitivity using a novel approach. Our results suggest that the value of a mortality risk reduction (VSL) is highly sensitive to the survey design. Our results cast doubt on the standard scope sensitivity tests in choice experiments, but also on the validity and reliability of VSL estimates based on stated-preference studies in general. This is important due to the large empirical literature on non-market evaluation and the elicited values’ central role in policy making.     

Optimized quantity-within-distance models of spatial welfare heterogeneity

Spatial welfare heterogeneity is frequently modeled within stated preference analysis as a function of discrete or continuous distance between households and affected resources. A common example is distance-decay analysis. Although distance-based models such as these are easily estimated, the ubiquity of this paradigm can lead to analyses that overlook other forms of analysis with equal or greater relevance. This paper develops an alternative approach to spatial heterogeneity in stated preference willingness to pay (WTP) based on the quantity or area of an affected resource surrounding each respondent at an optimized distance band or radius, with distance bands optimized using a grid-search algorithm that maximizes model likelihood. Methods and results are illustrated using a choice experiment on riparian land restoration in Maine, USA. The resulting quantity-within-distance model identifies systematic spatial patterns that are undetectable using distance-based analysis and directly relevant for welfare analysis.     

Parental altruism and the value of avoiding acute illness: are kids worth more than parents?

A model describing parents’ preferences to relieve their own and their children's acute illnesses is estimated using stated-preference data. Estimated marginal rates of substitution (MRS) between child and parent illness are about two, indicating that parents value children's illness attributes twice as highly as their own. The MRS is larger for younger children, falls toward unity as the child approaches adulthood, and appears to reflect parental altruism rather than parent–child differences in initial health or illness costs. Intra-family allocations may compensate for chronic health impairments. Parents’ willingness to pay to avoid own or child illness increases with income, declines with fertility, increases at a decreasing rate with duration and number of symptoms, and depends on perceived discomfort and activity restrictions. Current methods of assessing morbidity benefits of environmental regulations may understate substantially the value of children's health, particularly in African-American families.