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A Mire of Discount Rates: Delaying Conservation Payment Schedules in a Choice Experiment

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  • Ioanna Grammatikopoulou

    (Natural Resources Institute Finland (Luke)
    Global Change Research Institute of the Czech Academy of Sciences)

  • Janne Artell

    (Natural Resources Institute Finland (Luke))

  • Turo Hjerppe

    (Finnish Environment Institute)

  • Eija Pouta

    (Natural Resources Institute Finland (Luke))

Abstract

Studies on the public’s implicit discount rate in the willingness to pay for environmental amenities have mostly employed contingent valuation surveys. We investigate respondents’ time preferences using choice experiments with four payment schedules in a split-sample design in the context of mire conservation. We first examine preference and taste heterogeneity among respondents, finding them to a large extent independent of payment schedules. Next we use an endogenous approach to jointly estimate the implicit discount rates and preferences using choice experiments data. We explore exponential and hyperbolic discounting model specifications. We find insensitivity to the length of the payment period and support for hyperbolic discounting. Furthermore, we provide policy relevant valuation results concerning mire conservation.

Suggested Citation

  • Ioanna Grammatikopoulou & Janne Artell & Turo Hjerppe & Eija Pouta, 2020. "A Mire of Discount Rates: Delaying Conservation Payment Schedules in a Choice Experiment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 77(3), pages 615-639, November.
    • Handle: RePEc:kap:enreec:v:77:y:2020:i:3:d:10.1007_s10640-020-00511-3
    DOI: 10.1007/s10640-020-00511-3
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    References listed on IDEAS

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    2. Saarikoski, Heli & Aapala, Kaisu & Artell, Janne & Grammatikopoulou, Ioanna & Hjerppe, Turo & Lehtoranta, Virpi & Mustajoki, Jyri & Pouta, Eija & Primmer, Eeva & Vatn, Arild, 2022. "Multimethod valuation of peatland ecosystem services: Combining choice experiment, multicriteria decision analysis and deliberative valuation," Ecosystem Services, Elsevier, vol. 57(C).

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