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Incorporating issues of risk and uncertainty into choice modelling experiments

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  • Xuehong Wang

    (Centre for Environmental Management, Central Queensland University, Australia)

  • John Rolfe

    (Regional Development Economics, Faculty of Business and Informatics, Central Queensland University, Australia)

Abstract

Many policy issues, as well as policy funding and management choices, have elements of risk and uncertainty. This means that choice experiments, such as those used in choice modelling (CM), may need to frame trade-offs so that risk and uncertainty are included.This research aims to explore some methodological approaches to identify and treat uncertainty in CM experiments. A review of theoretical models, as well as a case study application in the CM technique reported by Roberts et al. (2008), suggests that including uncertainty information in the choice sets should influence responses significantly. However, key challenges remain to define and describe the elements of risk and uncertainty that are to be included in a choice experiment, to communicate the issues to respondents, and to develop appropriate forms of analysis.

Suggested Citation

  • Xuehong Wang & John Rolfe, 2009. "Incorporating issues of risk and uncertainty into choice modelling experiments," Environmental Economics Research Hub Research Reports 0912, Environmental Economics Research Hub, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:eenhrr:0912
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    File URL: https://crawford.anu.edu.au/research_units/eerh/pdf/EERH_RR12.pdf
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    References listed on IDEAS

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    1. G. Cornelis van Kooten & Emina Krcmar & Erwin H. Bulte, 2001. "Preference Uncertainty in Non-Market Valuation: A Fuzzy Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 487-500.
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