Grantee Research Project Results
1997 Progress Report: Preference Formation and Elicitation in Valuing Non-Market Goods
EPA Grant Number: R824679Title: Preference Formation and Elicitation in Valuing Non-Market Goods
Investigators: Brookshire, David S. , Kaplan, Hillard , McKee, Michael , Berrens, Robert , Jenkins, Hank , Ganderton, Philip
Institution: University of New Mexico
EPA Project Officer: Hahn, Intaek
Project Period: October 1, 1995 through September 30, 1997
Project Period Covered by this Report: October 1, 1996 through September 30, 1997
Project Amount: $184,998
RFA: Valuation and Environmental Policy (1995) RFA Text | Recipients Lists
Research Category: Environmental Justice
Objective:
The objective of this research project is to investigate the interaction between value formation and value elicitation. The project is based on the premise that an understanding of how individuals form environmental values cannot be decoupled from value statement problems and the choice of elicitation mechanism. The methods we are employing include a combination of focus groups, laboratory experiments, and telephone surveys.The focus of the survey effort is to measure the nonmarket benefits of protecting instream flows. In February 1995, we conducted a dichotomous choice contingent valuation (CV) telephone survey using a voluntary contribution trust fund format, and replicated it in February 1996. Our analysis of the data involved sensitivity tests to detect a change in the scope of the good, and corollary tests for sensitivity to information about the collective nature of providing the good and the temporal reliability of the results. Using the pooled data, we test sensitivity to scope and the group-size reminder under alternative modeling assumptions. We use four parametric models and evaluate the results of estimates of mean and median willingness to pay (WTP) and interquartile ranges.
Progress Summary:
The evidence compiled to date supports sensitivity to scope. One policy caveat that should be noted is that estimates of mean WTP are extremely sensitive to the distributional assumption, while estimates of median WTP are much more conservative and stable. The evidence also supports insensitivity to the group-size reminder.Of significance is the absence of evidence supporting the "contribution model." Further, our results suggest that telephone surveys may be credible as an alternative to in-person interviews for investigating particular issues in contingent valuation studies.
Future Activities:
In the future, we will perform a side-by-side comparison of the group-size reminder for open-ended and dichotomous choice formats. We have collected all necessary data, including an additional split-sample cross treatment.The behavioral laboratory effort for this project is focused on understanding the individual decision process in valuation. Our first investigation found that the disparity between willingness to accept (WTA) and WTP is due to uncertainty concerning the payoff from the good. This uncertainty can arise from a variety of sources. Value uncertainty is when the good is unfamiliar to the respondent. Outcome uncertainty concerns whether the agency in question will be able to provide the good with the funds generated. We found that the disparity is a function of the level of uncertainty and can be mitigated when the purchase is reversible.
A second issue that we are investigating is the role of provision mechanisms on stated WTP values. Our laboratory work will investigate WTP under different public good provision mechanisms that can be implemented in surveys. Although data collection is not yet complete, the evidence suggests that individuals give different responses for the same good depending on the mechanism. Future laboratory work will investigate the role of uncertainty concerning payoffs on public good provision and stated WTP.
Supplemental Keywords:
RFA, Scientific Discipline, Economic, Social, & Behavioral Science Research Program, Ecology and Ecosystems, decision-making, Social Science, Economics & Decision Making, compensation, ecosystem valuation, multi-objective decision making, policy analysis, public resources, social psychology, empirical validation, community involvement, social impact analysis, valuation, decision analysis, economic benefits, environmental assets, value elicitation, economic incentives, environmental values, information dissemination, preference formation, standards of value, environmental policy, psychological attitudes, public values, social resistance, public policy, stated preferenceProgress and Final Reports:
Original AbstractThe perspectives, information and conclusions conveyed in research project abstracts, progress reports, final reports, journal abstracts and journal publications convey the viewpoints of the principal investigator and may not represent the views and policies of ORD and EPA. Conclusions drawn by the principal investigators have not been reviewed by the Agency.