Insufficient sensitivity to scope remains one of the pivots of criticism addressed at validity of stated preference methods. Many studies demonstrate failure of a scope test of some sort, while many others show that WTP responses are sensitive to the scope of environmental change. Despite some existing explanations and reasons for insensitivity to scope (embedding, warm glow, uncertainty over supply of a public good, awareness of all options) there seems to exist no clear conclusion on how to deal with it. The paper provides an alternative explanation for insufficient sensitivity to scope, based on redefinition of value drivers of environmental goods. In the proposed framework respondents’ WTP need not depend only on physical characteristics of a valued good but may also partly be a function of a ‘label’ under which the environmental good is ‘sold’. To investigate this problem and empirically test the hypothesis and its implications, a CE study in a biodiversity valuation setting is designed and conducted. The conceptual framework and empirical evidence provide an alternative explanation for problems with the insufficient sensitivity to scope observed in many studies. Finally, we set out some implications of the nature of labels as value drivers for the design of future valuation studies.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Faculty of Economic Sciences, University of Warsaw in its series Working Papers with number
2008-03.
Length: 31 pages Date of creation: Aug 2008 Date of revision: Publication status: Published in Stirling Economics Discussion Papers, no. 2008-16 Handle: RePEc:war:wpaper:2008-03
Find related papers by JEL classification: Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
References listed on IDEAS 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.: