Substitutability, experience, and the value disparity: evidence from the marketplace

Recent empirical evidence suggests that important disparities exist between willingness to pay and compensation demanded for the same good. These results, which clearly contradict closely held economic doctrines, have led some influential commentators to call for an entirely new economic paradigm to displace conventional neoclassical theory. This study examines the generality of these experimental findings by going to a well-functioning marketplace and examining more than 350 individual decisions across two incentive-compatible elicitation mechanisms. The data suggest that behavior of individuals with intense experience approaches neoclassical predictions: any observed WTA/WTP disparity amongst this group is negligible.     

Ecological compensation based on willingness to accept for conservation of drinking water sources

Ecological compensation is a powerful environmental economic tool for environmental protection in areas where drinking water sources are located. We established an ecological compensation accounting system based on respondents’ willingness to accept (WTA). In this system, stakeholder preferences and the factors that influence them can be gauged effectively using logit and tobit models. We applied this accounting system to ecological compensation for the Miyun Reservoir, Beijing, China. The average WTA value for Miyun Reservoir residents was approximately 1186 CNY per family in 2012, which could be set as a suitable compensation standard, since it is slightly higher than the local protection cost. Thus, the annual total ecological compensation could be 58.73 million CNY. Distance from the reservoir, job types, and attitude to environmental protection were variables with significant effects on WTA. In addition, trends for individual preferences were identified via an analysis of key influential factors. The results suggest some useful information for establishing ecological compensation mechanisms for conservation of drinking water sources. Suggestions include popularizing the concept and meaning of ecological compensation among residents, setting different compensation levels based on distance from the reservoir, considering the requirements of farmers, and taking various in-kind and out-of-kind compensation approaches.     

居民为改善北京市大气环境质量的支付意愿研究

用意愿调查价值评估法分析了北京市居民为改善大气环境质量的支付意愿 ,评估大气质量改善的价值 ,并对这一方法在我国的应用进行探讨。结果显示 ,研究范围内的居民为 5年内降低目前大气污染物质浓度的 5 0 %而支付费用的平均支付意愿是 143元 /户·年 (1999年元 ) ,该区域内居民总的支付意愿是 3 .36亿元 /年 (1999年元 ) ,被调查者的家庭收入、教育水平、家庭人口数和年龄等社会经济变量对支付意愿有显著影响。最后 ,对意愿调查价值评估法在我国应用时存在的问题进行了初步探讨     

The influencing factors of the WTP for the risk reduction of chemical industry accidents in China

To explore the factors that influence respondents’ willingness to pay (WTP) for the risk reduction of chemical industry accidents, a questionnaire survey combined with contingent valuation and psychometric paradigm methods were conducted in the city of Yancheng, Jiangsu Province, China. Both traditional socioeconomic variables and perceived characteristics of the hazards were considered in this study, and a Tobit model was used to find the factors influencing WTP under three risk reduction scenarios. The results showed that three demographic characteristics, age, gender, and income, significantly affected the WTP for chemical risk reduction. In addition, three extracted public risk perception factors, effect, knowledge, and trust, also strongly affected the WTP. The mean WTP value increased as the magnitude of the risk reduction increased. The number of factors influencing the WTP decreased as the reduction level improved, and only the effect factor had a significant influence on the WTP for a higher level (80%) of risk reduction. The cost for chemical safety management of Yancheng was calculated, and the optimized risk reduction level was determined. These findings can assist governments and policy makers to formulate suitable strategies for risk control, to reach target groups of people to develop effective communication, and to provide specific references for the best investment for the security of local residents.     

基于利益相关方意愿调查的东江流域生态补偿机制探讨

流域生态补偿已经成为解决流域生态环境保护问题、协调流域上下游利益冲突的重要手段之一。以东江流域为例,通过实地问卷调查和条件价值评估法评估流域上下游利益相关方生态补偿意愿,并探讨构建东江流域生态补偿机制。流域生态补偿意愿调查结果表明,流域内居民对东江流域生态环境保护有很高的积极性,对建立流域生态补偿机制有较高的认同度;下游地区城市居民平均支付意愿为332.7-364.5元/（年·户）,上游农民对于林地保护的平均受偿意愿为360.75元/（年·hm^2）;通过回归分析发现,受教育水平、收入、自来水水质对支付意愿影响显著,而受偿意愿受性别和受教育水平影响明显;充分考虑并协调好流域上下游利益相关方的诉求对东江流域生态环境保护和生态补偿机制的建立有着重要的现实意义。     

A Review of WTA/WTP Studies

Willingness to accept (WTA) is usually substantially higher than willingness to pay (WTP). These constructs have been studied for roughly 30 years and with a wide variety of goods. This paper reviews those studies. We find that the less the good is like an “ordinary market good,” the higher is the ratio. The ratio is highest for non-market goods, next highest for ordinary private goods, and lowest for experiments involving forms of money. A generalization of this pattern holds even when we account for differences in survey design: ordinary goods have lower ratios than non-ordinary ones. We also find that ratios in real experiments are not significantly different from hypothetical experiments and that incentive-compatible elicitation yields higher ratios.     

A new meta-analysis on the WTP/WTA disparity

This study reports a new meta-analysis of papers that elicit willingness-to-pay (WTP) and willingness-to-accept compensation (WTA) measures of value for the same good. We investigate the effects of type of good and several survey-design features on the WTP/WTA disparity, measured as the logarithm of the ratio of mean WTA to mean WTP. Confirming Horowitz and McConnell?s (2002) pioneering meta-analysis, we find the disparity is smaller for ordinary private goods than for public and non-market goods, that it is not solely an artifact of using hypothetical transactions or other weak experimental or survey methods, and that it is smaller for studies using student subjects. In addition, we find that the disparity is smaller when subjects have experience valuing the good in real markets or through repeated experimental trials. In contrast to Horowitz and McConnell, we find the disparity is significantly smaller in studies using incentive-compatible elicitation mechanisms. The disparity is smaller in more recent studies, an effect that is attributable only in part to changes in study characteristics.     

A new baseline model for estimating willingness to pay from discrete choice models

We show a substantive problem exists with the widely-used ratio of coefficients approach to calculating willingness to pay (WTP) from discrete choice models. The correctly calculated standard error for WTP using this approach is shown to be undefined. This occurs because the cost parameter's standard error implies some possibility the true parameter value is arbitrarily close to zero. We propose a simple yet elegant way to overcome this problem by reparameterizing the (negative) cost variable's coefficient using an exponential transformation to enforce the theoretically correct positive coefficient. With it the confidence interval for WTP is now finite and well behaved.     

基于CVM的南昌城市河湖生态服务功能价值评估

条件价值评估法(CVM)是当前可用于确定环境物品非市场的和非使用价值的有效方法.在分析南昌市城市河湖生态环境问题的基础上,采用条件价值评估法,共回收194份单边界二分式CVM有效问卷,研究了南昌城市河湖生态系统服务改善的支付意愿及其经济价值.研究表明:1)南昌市城区河湖生态系统服务改善的平均支付意愿约为105.83元/...     

A Note on Consistent Estimation of Mean WTP Using a Misspecified Logit Contingent Valuation Model

Monte Carlo evidence has shown that simple, misspecified referendum contingent valuation (CV) models sometimes lead to good estimates of mean willingness to pay (WTP). Empirical studies have found that estimates of mean WTP derived from simple parametric models often differ little from those derived from nonparametric methods. This indicates that simple models can potentially yield WTP estimators that are relatively unbiased. This note shows that very simple logit referendum CV models will estimate mean WTP consistently if the survey bids are drawn randomly from a uniform distribution.     

基于CVM方法分析牧民对禁牧政策的受偿意愿——以锡林郭勒草原为例

确定居民对生态措施实施的受偿意愿,对目前迫切需要的生态补偿政策制定以及生态恢复和保护的有效性具有重要的现实意义。选用锡林郭勒草原为案例区域,通过入户调查及在那达慕大会集中调查相结合的方式,调查锡林郭勒草原地区牧民对禁牧措施的态度和受偿意愿。分析结果显示:53%的牧民愿意参加禁牧,而不愿意参加禁牧主要是由于补偿标准不合理引起的。计量经济学模型分析表明,牧民对禁牧的支持态度与牧民的收入和草地面积呈正相关,与养羊数量呈负相关。牧民的受偿意愿由牧民养羊数量、受教育年限、草地现状以及对禁牧政策的支持程度决定。根据意愿调查法初步估算锡林郭勒草原地区禁牧措施实施后牧民的补偿意愿,牧民家庭对禁牧政策的平均受偿意愿为每年每户2.7717万元,人均受偿意愿为8399元,平均每1hm2草地受偿意愿为85.95元。     

Income inequality and willingness to pay for environmental public goods

We study how the distribution of income among members of society, and income inequality in particular, affects social willingness to pay (WTP) for environmental public goods. We find that social WTP for environmental goods decreases (increases) with income inequality if and only if environmental goods and manufactured goods are substitutes (complements). We derive adjustment factors for benefit transfer to control for differences in income distributions between a study site and a policy site. For illustration, we quantify how social WTP for environmental public goods depends on the respective income distributions for empirical case studies in Sweden and the World at large. We find that the adjustment for income inequality can be substantial.     

Microcredit and willingness to pay for environmental quality: Evidence from a randomized-controlled trial of finance for sanitation in rural Cambodia

Low willingness to pay (WTP) for environmental quality in developing countries is a key research question in environmental economics. One explanation is that missing credit markets may suppress WTP for environmental improvements that require large up-front investments. We test the impact of microloans on WTP for hygienic latrines via a randomized controlled trial in 30 villages in rural Cambodia. We find that microcredit dramatically raises WTP for improved latrines, with 60% of households in the Financing arm willing to purchase at an unsubsidized price, relative to 25% in the Non-financing arm. Effects on latrine installation are positive but muted by several factors, including a negative peer effect: randomly induced purchases by neighbors reduce a household's probability of installing its own latrine. On methodological grounds, this paper shows that a “decision-focused evaluation” can be integrated into academic analysis to provide insight into questions of general interest.     

Environmental values and willingness to pay for a protected area: a segmentation of Italian university students

The study investigated students’ attitudes and willingness to pay (WTP) for the protection of some environmental values. The empirical study refers to a site located in Southern Italy and inserted into the Natura 2000 European Network. Students were segmented according to their appreciation of environmental values and the WTP for them. We considered two scenarios of the study site – of use and non-use – and four values – recreational, educational, bequest and existence. Five clusters, from the ‘unconcerned’ to the ‘committed’ one, reveal a diversity of profiles across the sample. Segmentation results point out the multifunctionality of the environmental heritage and highlight the heterogeneity of students’ environmental profiles.     

Disadvantages and future research directions in valuation of ecosystem services in China

We have reviewed the development, background and valuation history of ecosystem services in China and abroad, and highlight the importance of ecosystem services and the necessity of their valuation at various temporal and spatial scales. Through critical review of the literature, we have elucidated disadvantages in studies of ecosystem services in China, including the lack of a definite purpose for the valuation of ecosystem services, improper emphasis of valuation studies, stifled application of the contingent valuation method, weak power of research panels in the field, and the absence of the participation of government officials. In addition, we discuss some case studies from Western countries which tracked changes in the total economic value (TEV) of ecosystem services across different states of ecological disturbance and evaluated changes in the TEV under different management regimes. These studies may be useful in guiding future research in China. In essence, there are three major aspects involved in the valuation of ecosystem services: improving accuracy of valuation, association of results of valuation with policy and management decisions, and transfer of payments for ecosystem services. We suggest three priorities for future research in China: to develop an ecosystem service valuation model, to enhance the relevance of valuation studies to policy development, and to reward the protectors of ecosystem services.     

Three reasons to use annual payments in contingent valuation surveys: Convergent validity,discount rates,and mental accounting

We present three arguments for using ongoing annual payments in contingent valuation (CV) surveys that estimate the benefit of a long-lasting environmental improvement. First, by matching the duration of the payments with the duration of the environmental benefits, survey respondents are spared from performing complicated present value calculations. Second, willingness to pay (WTP) estimates from CV surveys that include ongoing annual payments best match WTP estimates obtained using travel cost surveys. Third, respondents are less likely to face binding mental budget constraints with ongoing annual payments than with a larger one-time payment. In addition, respondents’ discount rates may be estimated by collecting non-hypothetical, individual time preference data as part of the valuation survey.     

Assessment of the conservation value of Munseom area in Jeju Island,South Korea

The ecosystem of munseom area (MA) in Jeju Island, one of the marine protected areas in South Korea, has been continuously threatened by lack of management and pollution of the surrounding sea area. As a result, the South Korean government is trying to implement the systematic management plan to conserve the marine ecosystem of the MA. This article tries to obtain information about the conservation value of the MA. To this end, this study examines household willingness to pay (WTP) for conserving the MA employing the contingent valuation (CV) approach. A total of 1000 South Korean households were involved in the CV survey using a dichotomous choice question. The mean yearly WTP for the conservation is estimated as KRW 1763 (USD 1.50) per household. The national value expanded from the sample to the population is worth KRW 34.0billion (USD 29.0 million) per year. The results imply that the conservation is supported by South Korean households.     

Valuing nonfatal health risk as a function of illness severity and duration: Benefit transfer using QALYs

We estimate willingness to pay for small reductions in the risk of suffering nonfatal health conditions using a stated-preference survey fielded to an internet panel that is representative of the adult US population. Health conditions are described using a generic health utility system (EQ-5D). Estimated WTP is proportional to the stated reduction in probability of illness and independent of small differences in baseline risk, consistent with conventional economic theory, and is an increasing but highly concave function of the severity and duration of the illness. WTP to reduce nonfatal health risks can be estimated as a function of the severity and duration of the effect, but the relationship is not linear as assumed by the common practice of multiplying the expected QALY gain by a constant monetary value per QALY. WTP to reduce risk to another person in the household is significantly larger than to reduce risk to oneself, approximately 150 percent larger for an adult and 200 percent larger for a child.     

Do Contingent Valuation Estimates Pass a “Scope” Test? A Meta-analysis

This paper considers the scope test proposed to judge the internal consistency of contingent valuation estimates. The test is shown to be quite sensitive to the maintained hypotheses required to derive fairly precise expectations for the properties of WTP functions, and, therefore, a different approach may be needed in gauging the reliability of CV. This paper describes an approach that relies on a weight-of-the-evidence criterion and uses meta-analysis to develop a systematic appraisal of what the economic values of changes in amenity resources are. The approach is illustrated for the case of estimating people's willingness to pay for improving (or maintaining) visibility at the national parks.     

A criterion validity test of the contingent valuation method: comparing hypothetical and actual voting behavior for a public referendum

This study pursues external validation of contingent valuation by comparing survey results with the voting outcome of a Corvallis, Oregon, referendum to fund a riverfront improvement project through increased property taxes. Survey respondents hypothetically make a voting decision—with no financial consequences—on the upcoming referendum. The survey sample consists of respondents verified to have voted in the election. We use available precinct-level election data to compare the proportion of “yes” survey and referendum votes as well as estimate voting models and mean willingness to pay (WTP) based on the two sets of data. We find that survey responses match the actual voting outcome and WTP estimates based on the two are not statistically different. Contrary to similar studies, our statistical results do not depend on re-coding the majority of “undecided” survey responses to “no.” Furthermore, such a re-coding of responses may be inappropriate for our data set.