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Consequential Cash Choice Experiments: Provision Rules and Decision Support for Restoration of NROCs Ecosystem

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  • Kafle, Achyut
  • Swallow, Stephen K.

Abstract

Investigating incentives, through valuation context and questions, that motivate respondents to reveal their true values for environmental good under consideration has been a long-standing area of research in stated preference literature. A large number of previous non-market valuation studies have focused on various dimensions of valuation questions and context and have investigated how these dimensions affect the incentives to answer truthfully. An important, but relatively less-explored, area is the inclusion of a provision rule, by which environmental good under investigation will be provided, and how this affects participants’ incentives to tell the true values. Provision rules, that are made explicit to survey respondents, provide a connection between survey choices and actual outcomes. Advancements in Mechanism Design Theory have recently attracted researchers’ attention on examining alternative provision rules using discrete choice experiments (DCE) and comparing preferences and tradeoffs across provision rules. Only very few studies,mostly in laboratory experiments, have attempted to examine the influence of the inclusion of a provision rule in elicited preferences and tradeoffs. Employing a split-sample approach, this study compares a single decision-maker’s choice and a plurality vote provision rules in in-person choice experiments using real cash for actual implementation of ecosystem restoration project on the ground. A very preliminary conditional logit model results suggest that both rules produce statistically similar preference functions in terms of marginal values and tradeoffs between restoration attributes. Further analysis is yet to be conducted to ensure these preliminary results hold consistently using a Latent Class Model to incorporate preference heterogeneity for ecosystem restoration.

Suggested Citation

  • Kafle, Achyut & Swallow, Stephen K., 2013. "Consequential Cash Choice Experiments: Provision Rules and Decision Support for Restoration of NROCs Ecosystem," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150405, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea13:150405
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    Keywords

    Demand and Price Analysis; Research Methods/ Statistical Methods;

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