Random error in willingness to pay measurement: A multiple indicators, latent variable approach to the reliability of contingent values

The reliability of measurement refers to unsystematic error in observed responses. Investigations of the prevalence of random error in stated estimates of willingness to pay (WTP) are important to an understanding of why tests of validity in CV can fail. However, published reliability studies have tended to adopt empirical methods that have practical and conceptual limitations when applied to WTP responses. This contention is supported in a review of contingent valuation reliability studies that demonstrate important limitations of existing approaches to WTP reliability. It is argued that empirical assessments of the reliability of contingent values may be better dealt with by using multiple indicators to measure the latent WTP distribution. This latent variable approach is demonstrated with data obtained from a WTP study for stormwater pollution abatement. Attitude variables were employed as a way of assessing the reliability of open-ended WTP (with benchmarked payment cards) for stormwater pollution abatement. The results indicated that participants' decisions to pay were reliably measured, but not the magnitude of the WTP bids. This finding highlights the need to better discern what is actually being measured in VVTP studies, (C) 2003 Elsevier B.V. All rights reserved.

The role of uncertainty in the relationship between fairness evaluations and willingness to pay

Participants in contingent valuation studies may be uncertain about a number of aspects of the policy and survey context. The uncertainty management model of fairness judgments states that individuals will evaluate a policy in terms of its fairness when they do not know whether they can trust the relevant managing authority or experience uncertainty due to insufficient knowledge of the general issues surrounding the environmental policy. Similarly, some researchers have suggested that, not knowing how to answer WTP questions, participants convey their general attitudes toward the public good rather than report well-defined economic preferences. These contentions were investigated in a sample of 840 residents in four urban catchments across Australia who were interviewed about their WTP for stormwater pollution abatement. Four sources of uncertainty were measured: amount of prior issue-related thought, trustworthiness of the water authority, insufficient scenario information, and WTP response uncertainty. A logistic regression model was estimated in each subsample to test the main effects of the uncertainty sources on WTP as well as their interaction with fairness and proenvironmental attitudes. Results indicated support for the uncertainty management model in only one of the four samples. Similarly, proenvironmental attitudes interacted rarely with uncertainty to a significant level, and in ways that were more complex than hypothesised. It was concluded that uncertain individuals were generally not more likely than other participants to draw on either fairness evaluations or proenvironmental attitudes when making decisions about paying for stormwater pollution abatement.

Spatial, temporal, and human dimensions of air pollution in Brisbane

Arriving in Brisbane some six years ago, I could not help being impressed by what may be prosaically described as its atmospheric amenity resources. Perhaps this in part was due to my recent experiences in major urban centres in North America, but since that time, that sparkling quality and the blue skies seem to have progressively diminished. Unfortunately, there is also objective evidence available to suggest that this apparent deterioration is not merely the result of habituation of the senses. Air pollution data for the city show trends of increasing concentrations of those very substances that have destroyed the attractiveness of major population centres elsewhere, with climates initially as salubrious. Indeed, present figures indicate that photochemical smog in unacceptably high concentrations is rapidly becoming endemic also over Brisbane. These regrettable developments should come as no surprise. The society at large has not been inclined to respond purposefully to warnings of impending environmental problems, despite the experiences and publicity from overseas and even from other cities within Australia. Nor, up to the present, have certain politicians and government officials displayed stances beyond those necessary for the maintenance of a decorum of concern. At this stage, there still exists the possibility for meaningful government action without the embarrassment of losing political favour with the electorate. To the contrary, there is every chance that such action may be turned to advantage with increased public enlightenment. It would be more than a pity to miss perhaps the final remaining opportunity: Queensland is one of the few remaining places in the world with sufficient resources to permit both rational development and high environmental quality. The choice appears to be one of making a relatively minor investment now for a large financial and social gain the near future, or, permitting Brisbane to degenerate gradually into just another stagnated Los Angeles or Sydney. The present monograph attempts to introduce the problem by reviewing the available research on air quality in the Brisbane area. It also tries to elucidate some seemingly obvious, but so far unapplied management approaches. By necessity, such a broad treatment needs to make inroads into extensive ranges of subject areas, including political and legal practices to public perceptions, scientific measurement and statistical analysis to dynamics of air flow. Clearly, it does not pretend to be definitive in any of these fields, but it does try to emphasize those adjustable facets of the human use system of natural resources, too often neglected in favour of air pollution control technology. The crossing of disciplinary boundaries, however, needs no apology: air quality problems are ubiquitous, touching upon space, time and human interaction.

A state-contingent production approach to principal-agent problems with an application to point-source pollution control

Two basic representations of principal-agent relationships, the 'state-space' and 'parameterized distribution' formulations, have emerged. Although the state-space formulation appears more natural, analytical studies using this formulation have had limited success. This paper develops a state-space formulation of the moral-hazard problem using a general representation of production under uncertainty. A closed-form solution for the agency-cost problem is derived. Comparative-static results are deduced. Next we solve the principal's problem of selecting the optimal output given the agency-cost function. The analysis is applied to the problem of point-source pollution control. (C) 1998 Published by Elsevier Science S.A. All rights reserved.

The effects of air pollution on hospitalizations for cardiovascular disease in elderly people in Australian and New Zealand cities

OBJECTIVE: The goal of this study was to estimate the associations between outdoor air pollution and cardiovascular hospital admissions for the elderly. DESIGN: Associations were assessed using the case-crossover method for seven cities: Auckland and Christchurch, New Zealand; and Brisbane, Canberra, Melbourne, Perth, and Sydney Australia. Results were combined across cities using a random-effects meta-analysis and stratified for two adult age groups: 15-64 years and >= 65 years of age (elderly). Pollutants considered were nitrogen dioxide, carbon monoxide, daily measures of particulate matter (PM) and ozone. Where multiple pollutant associations were found, a matched case-control analysis was used to identify the most consistent association. RESULTS: In the elderly, all pollutants except 03 were significantly associated with five categories or cardiovascular disease admissions. No associations were found for arrhythmia and stroke. For a 0.9-ppm increase in CO, there were significant increases in elderly hospital admissions for total cardiovascular disease (2.2%), all cardiac disease (2.8%), cardiac failure (6.0%), ischemic heart disease (2.3%), and myocardial infarction (2.9%). There was some heterogeneity between cities, possibly due to differences in humidity and the percentage of elderly people. In matched analyses, CO had the most consistent association. CONCLUSIONS. The results suggest that air pollution arising from common emission sources for CO, NO2, and PM (e.g., motor vehicle exhausts) has significant associations with adult cardiovascular hospital admissions, especially in the elderly, at air pollution concentrations below normal health guidelines. RELEVANCE TO CLINICAL AND PROFESSIONAL PRACTICE: Elderly populations in Australia need to be protected from air pollution arising from outdoor sources to reduce cardiovascular disease.

The limits of environmental responsibility - A stormwater case study

The motivation for concern about the environment beyond one's neighborhood is still relatively poorly understood. This article examines the determinants of feelings of responsibility at a regional watershed level. Using demographic, attitudinal, self-reported behavior and neighborhood mapping measures from four cities in Australia, five hypotheses were derived. These were that wider environmental concerns would depend on (a) the physical and social characteristics of the respondents' neighborhoods, (b) the size of their perceived neighborhoods, (c) the length of residence at their localities, (d) educational level and attitudes toward environmental moral responsibility (and the interaction between them), and (e) the level of reported environmentally friendly behavior. Support was gained for all hypotheses except length of residence and the role of general moral attitudes toward the environment. It is concluded that to explain community action at the regional level, it is important to include both spatial and psychological insights and methodologies in research.

Economic and environmental impacts of pollution control in a system of environment and economic interdependence

The importance of the rate of change of the pollution stock in determining the damage to the environment has been an issue of increasing concern in the literature. This paper uses a three-sector (economy, population and environment), non-linear, discrete time, calibrated model to examine pollution control. The model explicitly links economic growth to the health of the environment. The stock of natural resources is affected by the rate of pollution flows, through their impact on the regenerative capacity of the natural resource stock. This can shed useful insights into pollution control strategies, particularly in developing countries where environmental resources are crucial for production in many sectors of the economy. Simulation exercises suggested that, under plausible assumptions, it is possible to reverse undesirable transient dynamics through pollution control expenditure, but this is dependent upon the strategies used for control. The best strategy is to spend money fostering the development of production technologies that reduce pollution rather than spending money dealing with the effects of the pollution flow into the environment. (C) 2001 Elsevier Science Ltd. All rights reserved.

Impact of point source pollution on nitrogen isotope signatures (delta N-15) of vegetation in SE Brazil

This study presents novel evidence that N-15 natural abundance can be used as a robust indicator to detect pollutant nitrogen in natural plant communities. Vegetation from the heavily polluted industrial area of Cubatao in Sao Paulo State, SE Brazil, was strongly N-15 depleted compared to plants at remote sites. Historic herbarium samples from Cubatao were significantly less N-15 depleted than extant plants, indicating that N-15 depletion of vegetation is associated with present-day nitrogen pollution in Cubatao. The heavy load of nitrogenous atmospheric pollutants in Cubatao provides a nitrogen source for plants, and strongly N-15 depleted air NH3 is likely to contribute to plant and soil N-15 depletion. Epiphytic plants from Cubatao were extremely N-15 depleted (average -10.9parts per thousand) contrasting with epiphytes at remote sites (averages -1.0parts per thousand and -3.0parts per thousand). Nitrogen isotope composition of vegetation provides a tool to determine input of pollutant nitrogen into plant communities. The strong isotopic change of epiphytes suggests that epiphytes are particularly sensitive biomonitors for atmospheric pollutant nitrogen.

Exposure to automotive pollution increases plasma susceptibility to oxidation

Low-density lipoprotein oxidation is implicated in the development of atherosclerosis. Plasma susceptibility to oxidation may be used as a marker of low-density lipoprotein oxidation and thus predict atherosclerotic risk. In this study the authors investigated the relationship between plasma susceptibility to oxidation and exposure to automotive pollution in a group of automobile mechanics (n = 16) exposed to high levels of automotive pollution, vs. matched controls (n = 13). The authors induced plasma oxidation by a free radical initiator and they determined susceptibility to oxidation by (1) change in absorbance at 234 nm, (2) lag time to conjugated diene formation, and (3) linear slope of the oxidation curve. Mechanics had significantly higher values (mean standard error) for change in absorbance (1.60 +/- 0.05 vs. 1.36 +/- 0.05; p < .002), and slope (1.6 x 10(-3) +/- 0.1 x 10(-3) vs. 1.3 x 10(-3) +/- 0.1 x 10(-3); p < .001), compared with controls. These results indicate that regular exposure to automotive pollutants increases plasma susceptibility to oxidation and may, in the long term, increase the risk of developing atherosclerosis.