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Inferring Attribute Non-attendance from Discrete Choice Experiments: Implications for Benefit Transfer

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Abstract

Typical convergent validity tests of benefit transfer based on stated preference data assume that willingness to pay (WTP) estimates have been accurately measured, and that differences in WTP arise from differences in observable and unobservable characteristics between the study and the policy sites. In this paper, we conduct a convergent validity test assuming equality of underlying preferences, but allow for the possibility that transfer errors arise from differences in the way that respondents process information in the preference elicitation tasks. Using data from an identical survey instrument applied to the population of two river basins in Spain, we obtain marginal and total WTP estimates for ecological improvements of water bodies and the corresponding transfer errors across sites. Results of equality constrained latent class (ECLC) models that infer attribute non-attendance (AN-A) are compared to results from mixed logit (MXL) models in WTP space. We find large absolute and relative differences in marginal and total WTP between sites for the MXL models, and significantly reduced transfer errors for the ECLC models. This paper therefore provides further evidence that AN-A can significantly affect environmental values derived from attribute-based stated preference methods and is the first to investigate the implications for benefit transfer.

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Notes

  1. For completeness, we note that Rosenberger and Stanley (2006) identify a third category of transfer error, the publication bias arising from economic journals giving more attention to methodological innovations than to reporting of applied work.

  2. Both generalisation and measurement error can be confounded. Certain types of measurement error related to, for example, design principles for the development of valuation scenarios are implicitly addressed when aiming at reducing the generalisation error (Bateman et al. 2011).

  3. We calculated MWTP based on the approaches applied in Campbell et al. (2011) and Kragt (2013). Results differed slightly in magnitude but not qualitatively to the MWTP estimates reported in this paper.

  4. The design does not allow estimation of the utility impact of a move from ‘poor’ to ‘moderate’ for environmental status related to river flows (ENV). Because the ‘poor’ level used to describe the status quo does not also appear in the remaining (designed) alternatives, it is not possible to estimate the difference in utility between ‘poor’ and ‘moderate’. This was done to serve the original purpose of the study, but it is unfortunate for the present paper. Strictly speaking, therefore, when we refer to non-attendance to ENV, this involves non-attendance to any improvement in ENV over ‘moderate’, since any choice of a non-status quo alternative implies a move from ‘poor’ to ‘moderate’.

  5. The second and third largest consumptive water uses are in both cases domestic water supply and industrial abstraction and use. The relative magnitude of domestic water consumption is higher in the SRB (25 %) compared to the GRB (11.5 %).

  6. The omission of protest responses had little effect on the model results and the conclusions drawn in this paper.

  7. Test statistics of a Ben-Akiva and Swait (1986) test are \(\sim \)0, i.e. the probability of erroneously choosing MXL as the true model when the ECLC is the true model is effectively zero for both GRB and SRB. For convenience the reader may also wish to compare values of the Akaike Information Criterion (AIC) and the Bayesian Information Criterion (BIC) listed in Table 3.

  8. Poe et al. (2005) tests confirm that differences in MWTP and CS are statistically significant at the 1 % level.

  9. Based on results of Poe et al. (2005) tests, the null hypothesis that mean MWTP distributions of RES, ENV2 and ENV3 are equal for samples can be rejected for RES, and the null hypothesis of equal CS distributions can be rejected for all of the six scenarios.

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Acknowledgments

We like to thank two anonymous reviewers and the editor, Christian Vossler, for their helpful comments and suggestions on earlier versions of the paper. This research was partially funded by the Scottish Government Rural Affairs and the Environment Portfolio Strategic Research Programme 2011–2016, Theme 1 (Environmental Change: Ecosystem Services and Biodiversity). The data used in this article were collected as part of the Collaboration Agreement between the University of Córdoba (Spain) and the Spanish Ministry of the Environment for the Development of Water Demand Analysis and Assessment of Environmental and Resource Benefits of the Water Framework Directive, and the AquaMoney project of the EU VI Framework Programme (SSPI-022723, Development and Testing of Guidelines for the Assessment of Environmental and Resource Costs and Benefits of the Water Framework Directive, www.aquamoney.org).

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Authors and Affiliations

  1. Land Economy, Environment and Society Group, Scotland’s Rural College (SRUC), King’s Buildings, West Mains Road, Edinburgh , EH9 3JG, UK

    Klaus Glenk

  2. Social, Economic and Geographical Sciences Group, The James Hutton Institute, Craigiebuckler, Aberdeen , AB15 8QH, UK

    Julia Martin-Ortega

  3. Research Institute of Water and Environmental Engineering (IIAMA), Universitat Politécnica de Valéncia, Camino de Vera s/n, 46022 , Valencia, Spain

    Manuel Pulido-Velazquez

  4. Biomathematics and Statistics Scotland, Craigiebuckler, Aberdeen , AB15 8QH, UK

    Jacqueline Potts

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  1. Klaus Glenk
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  4. Jacqueline Potts
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Correspondence to Klaus Glenk.

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Glenk, K., Martin-Ortega, J., Pulido-Velazquez, M. et al. Inferring Attribute Non-attendance from Discrete Choice Experiments: Implications for Benefit Transfer. Environ Resource Econ 60, 497–520 (2015). https://doi.org/10.1007/s10640-014-9777-9

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