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A choice modelling case study on climate change involving two-way interactions

Author

Listed:
  • Riera, Pere
  • Giergiczny, Marek
  • Peñuelas, Josep
  • Mahieu, Pierre-Alexandre

Abstract

Choice Modelling applications can be designed to estimate main effects only or multiple-way interactions between attributes. It has been reported that higher order effects generally account for less than 10% of the choice explanation. Nevertheless, the amount of applications testing for interactions among attributes in environmental valuation is very limited. This paper reports a Choice Modelling exercise valuing climate change impacts on plant cover, land erosion and fire risk in Spanish shrublands. Two out of three two-way interactions were found significant and to account for more than 20% of the choice model explanation. Their contribution to the log-likelihood value was comparable to the one of the main effects variables. Moreover, accounting for second order interactions significantly altered the estimates of the implicit prices of attributes compared to the main effects specifications.

Suggested Citation

  • Riera, Pere & Giergiczny, Marek & Peñuelas, Josep & Mahieu, Pierre-Alexandre, 2012. "A choice modelling case study on climate change involving two-way interactions," Journal of Forest Economics, Elsevier, vol. 18(4), pages 345-354.
  • Handle: RePEc:eee:foreco:v:18:y:2012:i:4:p:345-354
    DOI: 10.1016/j.jfe.2012.07.004
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    References listed on IDEAS

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    1. Mogas, Joan & Riera, Pere & Bennett, Jeff, 2006. "A comparison of contingent valuation and choice modelling with second-order interactions," Journal of Forest Economics, Elsevier, vol. 12(1), pages 5-30, March.
    2. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, May.
    3. David Revelt & Kenneth Train, 1998. "Mixed Logit With Repeated Choices: Households' Choices Of Appliance Efficiency Level," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 647-657, November.
    4. Brey, Raul & Bergland, Olvar & Riera, Pere, 2011. "A contingent grouping approach for stated preferences," Resource and Energy Economics, Elsevier, vol. 33(3), pages 745-755, September.
    5. Louviere,Jordan J. & Hensher,David A. & Swait,Joffre D., 2000. "Stated Choice Methods," Cambridge Books, Cambridge University Press, number 9780521788304, April.
    6. Lancsar, Emily & Louviere, Jordan & Flynn, Terry, 2007. "Several methods to investigate relative attribute impact in stated preference experiments," Social Science & Medicine, Elsevier, vol. 64(8), pages 1738-1753, April.
    7. Hess, Stephane & Rose, John M., 2009. "Allowing for intra-respondent variations in coefficients estimated on repeated choice data," Transportation Research Part B: Methodological, Elsevier, vol. 43(6), pages 708-719, July.
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    Citations

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    Cited by:

    1. Dong-Hyeon Kim & Byeong-Il Ahn & Eui-Gyeong Kim, 2016. "Metropolitan Residents’ Preferences and Willingness to Pay for a Life Zone Forest for Mitigating Heat Island Effects during Summer Season in Korea," Sustainability, MDPI, Open Access Journal, vol. 8(11), pages 1-15, November.
    2. Pierre-Alexandre Mahieu & Romain Craste & Bengt Kriström & Pere Riera, 2014. "Non-market valuation in France: An overview of the research activity," Working Papers hal-01087365, HAL.

    More about this item

    Keywords

    Higher order effects; Two-way interactions; Choice modelling;

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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