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Dealing with ignored attributes in choice experiments on valuation of Sweden’s environmental quality objectives

  • Carlsson, Fredrik

    ()

    (Department of Economics, School of Business, Economics and Law, Göteborg University)

  • Kataria, Mitesh

    ()

    (Department of Policy Analysis, National Environmental Research Institute)

  • Lampi, Elina

    ()

    (Department of Economics, School of Business, Economics and Law, Göteborg University)

In this paper we use follow-up questions to investigate whether attributes have been ignored in a choice experiment on environmental goods. This information is subsequently used in the estimation of the model by restricting the individual parameters for the ignored attributes to zero. We then separately estimate the marginal willingness to pay (WTP) for the whole sample and for those who took all attributes into account. We find no significant differences in mean marginal WTP between these two models. However, when taking the shares of respondents who considered both the environmental and the cost attributes (52 -69 percent of the respondents) into account, then the marginal WTPs for each attribute change if the respondents who ignored the attributes have a zero WTP. Hence, not taking into account whether respondents have considered the attribute could give biased welfare estimates and wrong policy implications. We also investigate whether any socioeconomic characteristics can explain who ignores attributes, and find that very few of the variables are significant, indicating that we can only partly explain the behavior.

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File URL: http://hdl.handle.net/2077/9568
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Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 289.

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Length: 35 pages
Date of creation: 20 Feb 2008
Date of revision: 01 Mar 2009
Publication status: Published in Environmental and Resource Economics, 2010, pages 65-89.
Handle: RePEc:hhs:gunwpe:0289
Contact details of provider: Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/

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  1. Kenneth Train, 2003. "Discrete Choice Methods with Simulation," Online economics textbooks, SUNY-Oswego, Department of Economics, number emetr2, March.
  2. Carlsson, Fredrik & Frykblom, Peter & Lagerkvist, Carl-Johan, 2004. "Using Cheap-Talk as a Test of Validity in Choice Experiments," Working Papers in Economics 128, University of Gothenburg, Department of Economics.
  3. Carlsson, Fredrik & Frykblom, Peter & Lagerkvist, Carl-Johan, 2004. "Preferences With and Without Prices - does the price attribute affect behavior in stated preference surveys?," Working Papers in Economics 150, University of Gothenburg, Department of Economics.
  4. Fredrik Carlsson & Peter Martinsson, 2003. "Design techniques for stated preference methods in health economics," Health Economics, John Wiley & Sons, Ltd., vol. 12(4), pages 281-294.
  5. Bengt Kristr�m, 1997. "Spike Models in Contingent Valuation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 1013-1023.
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  7. Clinch, J Peter & Murphy, Anthony, 2001. "Modelling Winners and Losers in Contingent Valuation of Public Goods: Appropriate Welfare Measures and Econometric Analysis," Economic Journal, Royal Economic Society, vol. 111(470), pages 420-43, April.
  8. Persson, Ulf, et al, 2001. " The Value of a Statistical Life in Transport: Findings from a New Contingent Valuation Study in Sweden," Journal of Risk and Uncertainty, Springer, vol. 23(2), pages 121-34, September.
  9. DeShazo, J. R. & Fermo, German, 2002. "Designing Choice Sets for Stated Preference Methods: The Effects of Complexity on Choice Consistency," Journal of Environmental Economics and Management, Elsevier, vol. 44(1), pages 123-143, July.
  10. John List & Michael Taylor & Paramita Sinha, 2006. "Using choice experiments to value non-market goods and services: Evidence from field experiments," Natural Field Experiments 00278, The Field Experiments Website.
  11. McFadden, Daniel L. & Bemmaor, Albert C. & Caro, Francis G. & Dominitz, Jeff & Jun, Byung-hill & Lewbel, Arthur & Matzkin, Rosa L. & Molinari, Francesca & Schwarz, Norbert & Willis, Robert J. & Winter, 2005. "Statistical analysis of choice experiments and surveys," Munich Reprints in Economics 19251, University of Munich, Department of Economics.
  12. Thomas H. Stevens & Jaime Echeverria & Ronald J. Glass & Tim Hager & Thomas A. More, 1991. "Measuring the Existence Value of Wildlife: What Do CVM Estimates Really Show?," Land Economics, University of Wisconsin Press, vol. 67(4), pages 390-400.
  13. Danny Campbell & W. George Hutchinson & Riccardo Scarpa, 2007. "Incorporating Discontinuous Preferences into the Analysis of Discrete Choice Experiments," Working Papers in Economics 07/18, University of Waikato, Department of Economics.
  14. Alpizar, Francisco & Carlsson, Fredrik & Martinsson, Peter, 2001. "Using Choice Experiments for Non-Market Valuation," Working Papers in Economics 52, University of Gothenburg, Department of Economics.
  15. Rosenberger, Randall S. & Peterson, George L. & Clarke, Andrea & Brown, Thomas C., 2003. "Measuring dispositions for lexicographic preferences of environmental goods: integrating economics, psychology and ethics," Ecological Economics, Elsevier, vol. 44(1), pages 63-76, February.
  16. Carlsson, Fredrik & Kataria, Mitesh, 2006. "Assessing management options for weed control with demanders and non-demanders in a choice experiment," Working Papers in Economics 208, University of Gothenburg, Department of Economics.
  17. 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, 05.
  18. Timothy Haab, 1999. "Nonparticipation or Misspecification? The Impacts of Nonparticipation on Dichotomous Choice Contingent Valuation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 14(4), pages 443-461, December.
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