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Preferences for environmental quality under uncertainty

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Author Info

  • Roberts, David C.
  • Boyer, Tracy A.
  • Lusk, Jayson L.

Abstract

Although the expected effects of environmental policies and interventions are rarely known with certainty, stated preference surveys rarely elicit preferences over uncertain environmental outcomes. This article presents empirical results challenging the view that ignoring such uncertainty during preference elicitation is of no consequence so long as people only care about final environmental states. We show that measured preferences for final environmental states, water quality in this case, depend on whether people choose between final states or between lotteries over final states. In contrast to the typical finding for monetary lotteries, we find significant under-weighting of low probability events related to water quality.

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Bibliographic Info

Article provided by Elsevier in its journal Ecological Economics.

Volume (Year): 66 (2008)
Issue (Month): 4 (July)
Pages: 584-593

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Handle: RePEc:eee:ecolec:v:66:y:2008:i:4:p:584-593

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Web page: http://www.elsevier.com/locate/ecolecon

Related research

Keywords: Agricultural run-off Algal bloom Random expected utility Stated preference Uncertainty;

References

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  12. Gollier, Christian & Pratt, John W, 1996. "Risk Vulnerability and the Tempering Effect of Background Risk," Econometrica, Econometric Society, vol. 64(5), pages 1109-23, September.
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  15. Peter C. Boxall, 1995. "The Economic Value of Lottery-rationed Recreational Hunting," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 43(1), pages 119-131, 03.
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Citations

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Cited by:
  1. Klaus Glenk & Sergio Colombo, 2013. "Modelling outcome-related risk in choice experiments," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(4), pages 559-578, October.
  2. Veronesi, Marcella & Chawla, Fabienne & Maurer, Max & Lienert, Judit, 2014. "Climate change and the willingness to pay to reduce ecological and health risks from wastewater flooding in urban centers and the environment," Ecological Economics, Elsevier, vol. 98(C), pages 1-10.
  3. Van Houtven, George & Mansfield, Carol & Phaneuf, Daniel J. & von Haefen, Roger & Milstead, Bryan & Kenney, Melissa A. & Reckhow, Kenneth H., 2014. "Combining expert elicitation and stated preference methods to value ecosystem services from improved lake water quality," Ecological Economics, Elsevier, vol. 99(C), pages 40-52.
  4. Gallardo, R. Karina & Wang, Qianqian, 2013. "Willingness to Pay for Pesticides' Environmental Features and Social Desirability Bias: The Case of Apple and Pear Growers," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 38(1), April.
  5. Catalina M. Torres Figuerola & Antoni Riera Font, 2009. "Defining environmental attributes as external costs in choice experiments: A discussion," CRE Working Papers (Documents de treball del CRE) 2009/1, Centre de Recerca Econòmica (UIB ·"Sa Nostra").
  6. Rolfe, John & Windle, Jill & Bennett, Jeffrey W., 2008. "Designing choice experiments to incorporate tests for geographic scale and scope differences," Research Reports 94802, Australian National University, Environmental Economics Research Hub.
  7. Debnath, Deepayan & Stoecker, Arthur L. & Epplin, Francis M., 2013. "Impact of Environmental Values on the Breakeven Price of Switchgrass," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 142563, Southern Agricultural Economics Association.
  8. Debnath, Deepayan & Stoecker, Arthur L. & Boyer, Tracy A. & Sanders, Larry D., 2011. "Integrated Reservoir Management under Stochastic Conditions," 2011 Annual Meeting, June 29-July 1, 2011, Banff, Alberta, Canada 108178, Western Agricultural Economics Association.

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