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Stated Preferences for Conservation Policies under Uncertainty: Insights on Individuals’ Risk Attitudes in the Environmental Domain

Author

Listed:
  • Michela Faccioli

    () (The James Hutton Institute, Social, Economic and Geographical Sciences Group)

  • Laure Kuhfuss

    () (School of Geography and Sustainable Development, University of St. Andrews)

  • Mikolaj Czajkowski

    () (University of Warsaw, Department of Economics)

Abstract

The outcome of a conservation policy is often subject to uncertainty. In stated preference valuation, there is increasing recognition that uncertainty affects preferences for environmental policies. However, there is also poor understanding regarding people’s perception of uncertainty per se and risk attitude. To shed more light on this , we designed a discrete choice experiment and compared preferences for environmental outcomes under climate change across two split samples, each confronted with a scenario where environmental outcomes are presented as either certain or uncertain (i.e. probabilistically) but displaying the same expected results. We fi nd that, for an equal expected outcome, preferences vary between the certain and the uncertain treatment. These results indicate that risk attitudes impact stated preferences for conservation policies under uncertainty and reinforce the idea that uncertainty should be included in stated preference studies to provide more accurate and policy relevant results . Interestingly, we additionally find that risk attitudes appear to be both context- and individual-specific– the effect of uncertainty depends on the magnitude and direction of change of the environmental good and on individual’s socio-demographic characteristics.

Suggested Citation

  • Michela Faccioli & Laure Kuhfuss & Mikolaj Czajkowski, 2017. "Stated Preferences for Conservation Policies under Uncertainty: Insights on Individuals’ Risk Attitudes in the Environmental Domain," Discussion Papers in Environment and Development Economics 2017-06, University of St. Andrews, School of Geography and Sustainable Development.
  • Handle: RePEc:sss:wpaper:2017-06
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    File URL: http://www.st-andrews.ac.uk/media/dept-of-geography-and-sustainable-development/pdf-s/DP%202017-06%20Faccioli%20et%20al.pdf
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    Cited by:

    1. Zawojska, Ewa & Bartczak, Anna & Czajkowski, Mikołaj, 2019. "Disentangling the effects of policy and payment consequentiality and risk attitudes on stated preferences," Journal of Environmental Economics and Management, Elsevier, vol. 93(C), pages 63-84.
    2. repec:eee:eneeco:v:65:y:2017:i:c:p:326-334 is not listed on IDEAS
    3. Bartczak, Anna & Chilton, Susan & Czajkowski, Mikołaj & Meyerhoff, Jürgen, 2017. "Gain and loss of money in a choice experiment. The impact of financial loss aversion and risk preferences on willingness to pay to avoid renewable energy externalities," Energy Economics, Elsevier, vol. 65(C), pages 326-334.

    More about this item

    Keywords

    Stated preference valuation; uncertainty; risk attitude; climate change; conservation;

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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