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Non-attendance to attributes in environmental choice analysis: a latent class specification

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  • Danny Campbell
  • David A. Hensher
  • Riccardo Scarpa

Abstract

There is a growing literature on the design and use of stated choice experiments. Analysts have developed sophisticated ways of analysing such data, using a form of discrete choice model to identify the marginal (dis)utility associated with observed attributes linked to an alternative, as well as accounting for preference and scale heterogeneity. There is also a growing literature studying the attribute processing rules that respondents use as a way of simplifying the task of choosing. Using the latent class framework, we define classes based on rules that recognise the non-attendance to one or more attributes. These processing rules are postulated to be used in real markets as a form of cognitive rationalisation. The empirical study involves a choice amongst rural environmental landscape improvements in the Republic of Ireland. We estimate models and calculate a marginal willingness to pay (WTP) for four landscape improvements, and contrast it with the results from a model specification in which all attributes are assumed to be attended to with parameter preservation. We find that the marginal WTP is, on average, significantly higher when full attribute preservation specification is adopted, raising questions about the appropriateness of current practice that assume a fully compensatory attribute choice rule.

Suggested Citation

  • Danny Campbell & David A. Hensher & Riccardo Scarpa, 2011. "Non-attendance to attributes in environmental choice analysis: a latent class specification," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 54(8), pages 1061-1076, December.
  • Handle: RePEc:taf:jenpmg:v:54:y:2011:i:8:p:1061-1076
    DOI: 10.1080/09640568.2010.549367
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    References listed on IDEAS

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    1. Danny Campbell & W George Hutchinson & Riccardo Scarpa, 2009. "Using Choice Experiments to Explore the Spatial Distribution of Willingness to Pay for Rural Landscape Improvements," Environment and Planning A, , vol. 41(1), pages 97-111, January.
    2. David Hensher, 2006. "Revealing Differences in Willingness to Pay due to the Dimensionality of Stated Choice Designs: An Initial Assessment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 34(1), pages 7-44, May.
    3. Ferrini, Silvia & Scarpa, Riccardo, 2007. "Designs with a priori information for nonmarket valuation with choice experiments: A Monte Carlo study," Journal of Environmental Economics and Management, Elsevier, vol. 53(3), pages 342-363, May.
    4. Scarpa, Riccardo & Rose, John M., 2008. "Design efficiency for non-market valuation with choice modelling: how to measure it, what to report and why," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(3), pages 1-30.
    5. David Hensher & David Layton, 2010. "Parameter transfer of common-metric attributes in choice analysis: implications for willingness to pay," Transportation, Springer, vol. 37(3), pages 473-490, May.
    6. Swait, Joffre, 2001. "A non-compensatory choice model incorporating attribute cutoffs," Transportation Research Part B: Methodological, Elsevier, vol. 35(10), pages 903-928, November.
    7. Hess, Stephane & Hensher, David A., 2010. "Using conditioning on observed choices to retrieve individual-specific attribute processing strategies," Transportation Research Part B: Methodological, Elsevier, vol. 44(6), pages 781-790, July.
    8. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387, April.
    9. Cantillo, Víctor & Heydecker, Benjamin & de Dios Ortúzar, Juan, 2006. "A discrete choice model incorporating thresholds for perception in attribute values," Transportation Research Part B: Methodological, Elsevier, vol. 40(9), pages 807-825, November.
    10. Danny Campbell, 2007. "Willingness to Pay for Rural Landscape Improvements: Combining Mixed Logit and Random‐Effects Models," Journal of Agricultural Economics, Wiley Blackwell, vol. 58(3), pages 467-483, September.
    11. David Hensher & John Rose & William Greene, 2005. "The implications on willingness to pay of respondents ignoring specific attributes," Transportation, Springer, vol. 32(3), pages 203-222, May.
    12. Hensher, David A. & Rose, John M., 2009. "Simplifying choice through attribute preservation or non-attendance: Implications for willingness to pay," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 45(4), pages 583-590, July.
    13. David A. Hensher, 2006. "How do respondents process stated choice experiments? Attribute consideration under varying information load," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 21(6), pages 861-878.
    14. Riccardo Scarpa & Timothy J. Gilbride & Danny Campbell & David A. Hensher, 2009. "Modelling attribute non-attendance in choice experiments for rural landscape valuation," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 36(2), pages 151-174, June.
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