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Benefit Estimates For Landscape Improvements: Sequential Bayesian Design And Respondents’ Rationality In A Choice Experiment Study

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Author Info

  • Danny Campbell

    ()
    (Institute of Agri-Food and Land Use, Queen’s University Belfast)

  • George Hutchinson

    (Institute of Agri-Food and Land Use, Queen’s University Belfast)

  • Riccardo Scarpa

    (Waikato Management School, Hamilton, New Zealand)

Abstract

A multi-attribute stated preference approach is used to value low and high impact actions on four major landscape components addressed by the Rural Environment Protection (REP) Scheme in Ireland. Several methodological issues are addressed: the use of prior beliefs on the relative magnitudes of parameters, standardized description of different levels of landscape improvements via image manipulation software, adoption of efficiencyincreasing sequential experimental design, and sensitivity of benefit estimates to inclusion of responses from “irrational” respondents. Amongst other things, our findings indicate that Bayesian design updating can deliver significant efficiency gains, and that estimates may be up-ward biased when irrational respondents are not excluded.

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File URL: http://www.agresearch.teagasc.ie/rerc/downloads/workingpapers/06wpre06.pdf
File Function: First version, 2006
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Bibliographic Info

Paper provided by Rural Economy and Development Programme,Teagasc in its series Working Papers with number 0606.

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Length: 39 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:tea:wpaper:0606

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Related research

Keywords: Bayesian experimental design; choice experiments; individual-specific WTP; mixed logit; non-market valuation; rationality tests; rural landscapes; status-quo bias.;

References

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  1. Jayson L. Lusk & F. Bailey Norwood, 2005. "Effect of Experimental Design on Choice-Based Conjoint Valuation Estimates," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(3), pages 771-785.
  2. Kanninen Barbara J., 1993. "Design of Sequential Experiments for Contingent Valuation Studies," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages S1-S11, July.
  3. Pruckner, Gerald J, 1995. "Agricultural Landscape Cultivation in Austria: An Application of the CVM," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 22(2), pages 173-90.
  4. Bastian, Chris T. & McLeod, Donald M. & Germino, Matthew J. & Reiners, William A. & Blasko, Benedict J., 2002. "Environmental amenities and agricultural land values: a hedonic model using geographic information systems data," Ecological Economics, Elsevier, vol. 40(3), pages 337-349, March.
  5. Cooper, Joseph C. & Keim, Russ, 1996. "Incentive payments to encourage farmer adoption of water quality protection practices," MPRA Paper 24779, University Library of Munich, Germany.
  6. DeShazo, J. R. & Fermo, German, 2002. "Designing Choice Sets for Stated Preference Methods: The Effects of Complexity on Choice Consistency," Journal of Environmental Economics and Management, Elsevier, vol. 44(1), pages 123-143, July.
  7. Train, K. & Weeks, M., 2004. "Discrete Choice Models in Preference Space and Willingness-to Pay Space," Cambridge Working Papers in Economics 0443, Faculty of Economics, University of Cambridge.
  8. F. Reed Johnson & Kristy E. Mathews, 2001. "Sources and Effects of Utility-Theoretic Inconsistency in Stated-Preference Surveys," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(5), pages 1328-1333.
  9. Bjorklund, Johanna & Limburg, Karin E. & Rydberg, Torbjorn, 1999. "Impact of production intensity on the ability of the agricultural landscape to generate ecosystem services: an example from Sweden," Ecological Economics, Elsevier, vol. 29(2), pages 269-291, May.
  10. Geoghegan, Jacqueline & Wainger, Lisa A. & Bockstael, Nancy E., 1997. "Spatial landscape indices in a hedonic framework: an ecological economics analysis using GIS," Ecological Economics, Elsevier, vol. 23(3), pages 251-264, December.
  11. Kjartan Sælensminde, 2002. "The Impact of Choice Inconsistencies in Stated Choice Studies," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 23(4), pages 403-420, December.
  12. Mark Morrison & Jeff Bennett & Russell Blamey & Jordan Louviere, 2002. "Choice Modeling and Tests of Benefit Transfer," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(1), pages 161-170.
  13. Cooper, Joseph C., 1997. "Combining Actual And Contingent Behavior Data To Model Farmer Adoption Of Water Quality Protection Practices," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 22(01), July.
  14. Gonzalez, Matias & Leon, Carmelo J., 2003. "Consumption process and multiple valuation of landscape attributes," Ecological Economics, Elsevier, vol. 45(2), pages 159-169, June.
  15. Foster, Vivien & Mourato, Susana, 2002. "Testing for Consistency in Contingent Ranking Experiments," Journal of Environmental Economics and Management, Elsevier, vol. 44(2), pages 309-328, September.
  16. M. Weeks, 2003. "Discrete choice methods with simulation, Kenneth E. Train, Cambridge University Press, 2003, ISBN: 0-521-81696-3, pp. 334," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(3), pages 379-383.
  17. Hellerstein, Daniel & Nickerson, Cynthia J. & Cooper, Joseph C. & Feather, Peter & Gadsby, Dwight M. & Mullarkey, Daniel J. & Tegene, Abebayehu & Barnard, Charles H., 2002. "Farmland Protection: The Role Of Public Preferences For Rural Amenities," Agricultural Economics Reports 33963, United States Department of Agriculture, Economic Research Service.
  18. Coiner, Colette & Wu, JunJie & Polasky, Stephen, 2001. "Economic and environmental implications of alternative landscape designs in the Walnut Creek Watershed of Iowa," Ecological Economics, Elsevier, vol. 38(1), pages 119-139, July.
  19. Silvia Ferrini & Riccardo Scarpa, 2005. "Experimental Designs for Environmental Valuation with Choice-Experiments: A Monte-Carlo Investigation," Working Papers in Economics 05/08, University of Waikato, Department of Economics.
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