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Accounting for implicit and explicit payment vehicles in a discrete choice experiment

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  • Musharaf A. Talpur
  • Mark J. Koetse
  • Roy Brouwer

Abstract

This study estimates the benefits of beach quality improvements, using travel costs as an implicit and entrance fee as an explicit payment vehicle in two otherwise identical labelled discrete choice site selection models. Including entrance fee as an explicit payment vehicle in addition to implicit travel costs is expected to affect beach visitors’ preferences and willingness to pay (WTP) since travel costs only are not expected to measure maximum WTP. Convergent validity of preference parameters and WTP derived from the two identical discrete choice experiments (DCEs) is tested using a split-sample approach and specifying a mixed logit choice model. Both preferences and scale parameters are significantly different between the two samples. As expected, mean WTP values are higher when an explicit entrance fee is included in the DCE. Our results suggest that implicit payment vehicles in choice experiments underestimate welfare changes. Beach visitors’ positive WTP holds promise for the introduction of economic instruments such as entrance fees to support the financial sustainability of improved beach management.

Suggested Citation

  • Musharaf A. Talpur & Mark J. Koetse & Roy Brouwer, 2018. "Accounting for implicit and explicit payment vehicles in a discrete choice experiment," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 7(4), pages 363-385, October.
    • Handle: RePEc:taf:teepxx:v:7:y:2018:i:4:p:363-385
    DOI: 10.1080/21606544.2018.1450789
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    Cited by:

    1. Rambonilaza, Tina & Kerouaz, Fathallah, 2023. "Valuing harvest regulation changes in recreational fisheries with a discrete choice experiment study: What can we learn from a synthetic review?," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 40-54.
    2. Khedr, Salma & Rehdanz, Katrin & Brouwer, Roy & van Beukering, Pieter & Dijkstra, Hanna & Duijndam, Sem & Okoli, Ikechukwu C., 2023. "Public preferences for marine plastic litter management across Europe," Ecological Economics, Elsevier, vol. 204(PA).
    3. John Robinson, Peter & van Beukering, Pieter & Brander, Luke & Brouwer, Roy & Haider, W. & Taylor, Michael & Mau, Paulus, 2022. "Understanding the determinants of biodiversity non-use values in the context of climate change: Stated preferences for the Hawaiian coral reefs," Ecosystem Services, Elsevier, vol. 53(C).
    4. Talpur, Musharaf & Brouwer, Roy & Koetse, Mark, 2019. "Opt-Out Forced Choice Effect in Combined Revealed and Stated Preference Discrete Choice Models: A Gender Perspective," MPRA Paper 99631, University Library of Munich, Germany.
    5. Soliño, Mario & Raposo, Rosa, 2022. "Contributing to healthy forests: Social preferences for pest and disease mitigation programs in Spain," Forest Policy and Economics, Elsevier, vol. 140(C).
    6. David Boto-García & Petr Mariel & José Baños Pino & Antonio Alvarez, 2022. "Tourists’ willingness to pay for holiday trip characteristics: A Discrete Choice Experiment," Tourism Economics, , vol. 28(2), pages 349-370, March.

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