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Effects of Institutional Setting on Value Estimates of Stated Preference Surveys in Developing Economies: A Discrete Choice Experiment on Conserving Biodiversity in The Cape Floristic Region

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  • Manhique, Henrique
  • Wätzold, Frank

Abstract

The use of stated preference surveys for the valuation of environmental goods in developing countries has to take into account that there is substantial public distrust towards the institutions providing the environmental goods under valuation. Thus, high protest responses and low value estimates may indicate rejection or protest against the institutional setting of the survey design, rather than the dislike or low welfare effects of these goods. In this context, we investigate the effects of institutional trust on value estimates by examining the performance of three different institutions – government, conservation NGO, and farmers – in a case study aimed at eliciting preferences for conserving different types of biodiversity within orchards in the Cape Floristic Region – a biodiversity hotspot in South Africa threatened by the expansion and intensification of agriculture. We find that institutional trust has an effect on preferences and willingness-to-pay, with farmers leading to the highest level of trust and value estimates, followed rather closely by a conservation NGO and, with some distance, by the government with the lowest trust level and value estimates. In terms of preferences for biodiversity conservation, our results show that respondents prefer measures to conserve endangered and endemic species over measures primarily aimed at providing the ecosystem services of pollination and pest control.

Suggested Citation

  • Manhique, Henrique & Wätzold, Frank, 2023. "Effects of Institutional Setting on Value Estimates of Stated Preference Surveys in Developing Economies: A Discrete Choice Experiment on Conserving Biodiversity in The Cape Floristic Region," MPRA Paper 118750, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:118750
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    More about this item

    Keywords

    Biodiversity Hotspot; Institutional distrust; Ecosystem services; Economics; Endangered species; Payment vehicle; Western Cape;
    All these keywords.

    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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