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Preferences for environmental quality under uncertainty

  • Roberts, David C.
  • Boyer, Tracy A.
  • Lusk, Jayson L.

Although the expected effects of environmental policies and interventions are rarely known with certainty, stated preference surveys rarely elicit preferences over uncertain environmental outcomes. This article presents empirical results challenging the view that ignoring such uncertainty during preference elicitation is of no consequence so long as people only care about final environmental states. We show that measured preferences for final environmental states, water quality in this case, depend on whether people choose between final states or between lotteries over final states. In contrast to the typical finding for monetary lotteries, we find significant under-weighting of low probability events related to water quality.

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Article provided by Elsevier in its journal Ecological Economics.

Volume (Year): 66 (2008)
Issue (Month): 4 (July)
Pages: 584-593

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Handle: RePEc:eee:ecolec:v:66:y:2008:i:4:p:584-593
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolecon

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