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Do Respondents’ Perceptions of the Status Quo Matter in Non-Market Valuation with Choice Experiments? An Application to New Zealand Freshwater Streams

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Author Info

  • Dan Marsh

    ()
    (Department of Economics, University of Waikato, Private Bag 3105, Hamilton 3240, New Zealand)

  • Lena Mkwara

    ()
    (Department of Economics, University of Waikato, Private Bag 3105, Hamilton 3240, New Zealand)

  • Riccardo Scarpa

    ()
    (Department of Economics, University of Waikato, Private Bag 3105, Hamilton 3240, New Zealand
    Center for the Study of Choice, University of Technology, Sydney, P.O. Box 123, Broadway NSW 2007, Australia
    Adjunct professor at School of Natural Resources, University of Western Australia, Perth WA 6009, Australia)

Abstract

Many issues relating to the sustainability of environmental resource use are informed by environmental valuation studies with stated preference surveys. Within these, researchers often provide descriptions of status quo conditions which may differ from those perceived by respondents. Ignoring this difference in utility baselines may affect the magnitude of estimated utility changes and hence bias benefit estimates of proposed environmental policies. We investigate this issue using data from a choice experiment on a community’s willingness to pay for water quality improvements in streams. More than 60% of respondents perceived streams’ water quality at the status quo to be better than the description we provided in our scenario. Results show that respondents who could provide details of their perception of the status quo displayed stronger preferences for water quality improvements—and hence higher marginal willingness to pay—than their counterparts. However, respondents who referred to their own status quo description displayed a higher inclination to prefer the status quo , while other respondents tended to prefer the proposed improvements. We argue this might be linked to the amount of knowledge each group displayed about the status quo : a kind of reluctance to leave what one believes he/she knows well.

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Bibliographic Info

Article provided by MDPI, Open Access Journal in its journal Sustainability.

Volume (Year): 3 (2011)
Issue (Month): 9 (September)
Pages: 1593-1615

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Handle: RePEc:gam:jsusta:v:3:y:2011:i:9:p:1593-1615:d:14112

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Web page: http://www.mdpi.com/

Related research

Keywords: choice experiments; fixed status quo ; people’s perceived status quo ; status quo effect; willingness to pay;

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References

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Citations

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Cited by:
  1. Marsh, Dan & Phillips, Yvonne, 2012. "Difficult Choices: What Influences the Error Variance in a Choice Experiment," 2012 Conference, August 31, 2012, Nelson, New Zealand 139651, New Zealand Agricultural and Resource Economics Society.
  2. Miller, Sini & Tait, Peter & Saunders, Caroline, 2013. "Scarcity Of Canterbury’s Water: Its Multiple, Conflicting Uses," 2013 Conference, August 28-30, 2013, Christchurch, New Zealand 160269, New Zealand Agricultural and Resource Economics Society.
  3. Dan Marsh & Yvonne Phillips, 2012. "Which Future for the Hurunui? Combining Choice Analysis with Stakeholder Consultation," Working Papers in Economics 12/17, University of Waikato, Department of Economics.
  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.

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