Grantee Research Project Results
1997 Progress Report: Developing Conjoint Stated Preference Methods for Valuation of Environmental Resources Within Their Ecological Context
EPA Grant Number: R824709Title: Developing Conjoint Stated Preference Methods for Valuation of Environmental Resources Within Their Ecological Context
Investigators: Opaluch, James J. , Swallow, Stephen K.
Institution: University of Rhode Island
EPA Project Officer: Hahn, Intaek
Project Period: October 1, 1995 through September 1, 1997
Project Period Covered by this Report: October 1, 1996 through September 1, 1997
Project Amount: $125,972
RFA: Valuation and Environmental Policy (1995) RFA Text | Recipients Lists
Research Category: Environmental Justice
Objective:
The objective of this research is to further develop methods for valuing environmental resources within a complex context. The research will evaluate methods to address these challenges in two ways: 1) the usefulness of valuation methods that do not rely exclusively on money-measures of value; and 2) the potential to extend available methods of resource valuation when individuals face cognitive limits. Conjoint analysis provides a means to address these avenues of research in cases where economic analysis relies upon stated preferences of individuals. The principal objectives of the proposed project are: 1) to test and to compare alternative means of estimating relative values of natural resources using conjoint analysis; 2) to implement and to test measurement of monetary values using conjoint analysis; 3) to use conjoint analysis to develop and test models of human preferences that recognize resource values are dependent upon the ecological context; 4) to expand the neoclassical economic basis of conjoint analysis to consider concepts such as strength-of-preference indicators, fuzzy logic, effects of complexity, and ambivalence theory; and 5) to develop and test alternative survey methods for measuring values.The complexity of natural systems presents a great challenge to federal agencies charged with managing public resources. Because ecological services are highly complex and vary widely across ecosystems, services from a particular system can be difficult to identify, measure, and communicate to the public. For example, it is not possible to value the diversity of wetland environments by measuring the value of wetlands. Different wetlands provide varying levels of numerous services that depend both upon the characteristics of the particular wetland and its surroundings. On the one hand, appropriate methods for valuation require that the range of services of ecological systems be appropriately represented so that values for various ecosystems reflect the services provided. On the other hand, research on valuation methods suggests that complex scenarios challenge respondents' ability to provide accurate, reliable, and valid responses. This means we need to develop methods that facilitate a two-way communication between management agencies and the public for whom resources are managed.
Conjoint analysis offers an approach that simultaneously incorporates the multiple dimensions of a complex decision and provides a context that may facilitate choices. Rather than asking survey respondents to focus on the "dollar value" of specific resources, conjoint analysis asks the respondent to make a simple (often discrete) choice among resource packages and, in some cases, to use a simple rating scale to indicate the strength of their preferences for the alternative packages. However, monetary measures of value may still be derived from a conjoint survey if the environmental goods are described along with a cost of resource protection.
If the respondent's task is simpler or more natural, the conjoint method may encounter fewer limitations due to the cognitive abilities of potential respondents. Also, because the respondent is forced to choose between two different environmental commodities, there is less danger that responses reflect symbolic statements that "the environment is important to me."
Our project also explores the theoretical and empirical usefulness of imprecise, yet meaningful information from strength-of-preference ratings scales using concepts of fuzzy math. We explore various methodological issues regarding value elicitation, including the development of survey instruments that may facilitate respondents' cognitive assessments of valuation tasks using conjoint analysis and strength-of-preference indicators.
Preference orderings and strength-of-preference indicators are a natural application of fuzzy logic. Because fuzzy knowledge underlies human thought processes and languages, fuzzy logic provides a basis for modeling precisely the type of qualitative reasoning that humans employ in uncertain or unfamiliar situations. The set of commodities that are preferred or indifferent to some particular commodity can be viewed as a fuzzy set, where some commodities are more clearly members of the set than are others. For strength-of-preference indicators in conjoint analysis, individuals might indicate that commodity A is "strongly preferred" to B, and B is "weakly preferred" to C. These strength-of-preference indicators can also be viewed as a measure of the degree of membership in the fuzzy set of weakly preferred commodity bundles.
Supplemental Keywords:
RFA, Scientific Discipline, Economic, Social, & Behavioral Science Research Program, Ecosystem Protection/Environmental Exposure & Risk, Ecosystem/Assessment/Indicators, Ecosystem Protection, Ecological Effects - Environmental Exposure & Risk, Ecology and Ecosystems, decision-making, Social Science, Economics & Decision Making, risk assessment, surveys, contingent valuation, deliberative policy, ecosystem valuation, human welfare, policy analysis, social psychology, dichotomous-choice, social impact analysis, valuation, decision analysis, environmental assets, property values, valuing environmental quality, cognitive limits, economic incentives, environmental values, information dissemination, preference formation, standards of value, environmental policy, community-based, models, psychological attitudes, public values, interviews, multi-criteria, public policy, stated preference, fuzzy logic, conjoint analysis, cost effectivenessProgress 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.