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Lexicographic preferences for rural environmental landscape improvements: implications on individual-specific willingness to pay estimates

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  • 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

In discrete choice experiments respondents are generally assumed to consider all of the attributes across each of the alternatives, and to choose their most preferred. However, results in this paper indicate that for many respondents employ simplified lexicographic decisionmaking rules, whereby they have a ranking of the attributes, but their choice of an alternative is based solely on the level of their most important attribute(s). Not accounting for these simple decision-making heuristics introduces systemic errors and leads to biased point estimates, as they are a violation of the continuity axiom and a departure from the use of compensatory decision-making. In this paper the implications of lexicographic preferences is studied for a number of rural environmental landscape improvement measures. Differently from previous analysis, this paper uses a mixed logit specification and focuses on the sensitivity of individual-specific willingness to pay estimates conditional on whether lexicographic decision-making rules are accounted for in the modelling of discrete choice responses.

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Bibliographic Info

Paper provided by Rural Economy and Development Programme,Teagasc in its series Working Papers with number 0610.

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Length: 33 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:tea:wpaper:0610

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Cited by:
  1. Meenakshi, J. V. & Banerji, A. & Manyong, Victor & Tomlins, Keith & Hamukwala, Priscilla & Zulu, Rodah & Mungoma, Catherine, 2010. "Consumer acceptance of provitamin A orange maize in rural Zambia:," HarvestPlus Working Papers 4, International Food Policy Research Institute (IFPRI).
  2. Christoph, Inken B. & Peter, Guenter & Rothe, Andrea & Salamon, Petra & Weber, Sascha A. & Weible, Daniela, 2011. "School Milk Consumption in Germany - What are Important Product Attributes for Children and Parents?," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114294, European Association of Agricultural Economists.
  3. Rambonilaza, Tina, 2005. "Land-use planning and public preferences: What can we learn from choice experiments method?," MPRA Paper 9225, University Library of Munich, Germany, revised May 2007.
  4. Meenakshi, J.V. & Banerji, A. & Manyong, Victor & Tomlins, Keith & Mittal, Nitya & Hamukwala, Priscilla, 2012. "Using a discrete choice experiment to elicit the demand for a nutritious food: Willingness-to-pay for orange maize in rural Zambia," Journal of Health Economics, Elsevier, vol. 31(1), pages 62-71.
  5. Banerji, A. & Chowdhury, Shyamal K. & de Groote, Hugo & Meenakshi, Jonnalagadda V. & Haleegoah, Joyce & Ewoo, Manfred, 2013. "Using elicitation mechanisms to estimate the demand for nutritious maize: Evidence from experiments in rural Ghana," HarvestPlus Working Papers 10, International Food Policy Research Institute (IFPRI).
  6. Rulleau, Bénédicte & Dachary-Bernard, Jeanne, 2012. "Preferences, rational choices and economic valuation: Some empirical tests," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(2), pages 198-206.
  7. Kwak, So-Yoon & Yoo, Seung-Hoon & Kwak, Seung-Jun, 2010. "Valuing energy-saving measures in residential buildings: A choice experiment study," Energy Policy, Elsevier, vol. 38(1), pages 673-677, January.
  8. Moser, Riccarda & Raffaelli, Roberta & Thilmany, Dawn D., 2011. "Consumer Preferences for Fruit and Vegetables with Credence-Based Attributes: A Review," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 14(2).

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