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Defining environmental attributes as external costs in choice experiments: A discussion

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  • Catalina M. Torres Figuerola

    () (Centre de Recerca Econòmica (UIB · Sa Nostra))

  • Antoni Riera Font

    () (Centre de Recerca Econòmica (UIB · Sa Nostra))

Abstract

After doing a CE literature review to examine the dominant trends around the definition of environmental attributes in terms of their identification as external benefits or costs, their description through qualitative or quantitative attribute level labels, their number of levels and their assumed relationship with utility (i.e. linear vs non-linear), three main conclusions have been drawn. First, definition of environmental attributes as external costs has been uncommon. Second, only one single parameter has been estimated for most of them, in which cases the number of quantitative and qualitative attributes has been similar. Third, nonlinear effects have been mainly depicted through use of qualitative attributes. In this context, this paper examines the policy relevance of defining the environmental attributes as external costs when the assessment of welfare losses induced by potential impacts from polluting activities is the issue. It shows how a cost-based attribute definition allows identifying the environmental attributes through impact pathway analyses not only enabling links between welfare estimates and actual impact magnitudes but also promoting the description of attribute levels in quantitative terms.

Suggested Citation

  • Catalina M. Torres Figuerola & Antoni Riera Font, 2009. "Defining environmental attributes as external costs in choice experiments: A discussion," CRE Working Papers (Documents de treball del CRE) 2009/1, Centre de Recerca Econòmica (UIB ·"Sa Nostra").
  • Handle: RePEc:pdm:wpaper:2009/1
    as

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    References listed on IDEAS

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    Cited by:

    1. Cheung, Jimmy & Kragt, Marit & Burton, Michael, 2015. "The awareness and willingness of air travellers to pay for voluntary carbon offsets and their co-benefits," Working Papers 199231, University of Western Australia, School of Agricultural and Resource Economics.

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    Keywords

    Choice experiments; environmental attributes; utility specification; external costs; impact pathway; eutrophication;

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