Using choice modelling to investigate equity preferences

Benefit cost analysis (BCA) is a widely used method of assessing environmental policies. One of the limitations of BCA is the incorporation of equity considerations into an analysis. While this is theoretically possible through the application of distributional weights, this practice has not been generally adopted due to difficulties in determining appropriate weights. This paper suggests that one way of addressing the equity issue is through the application of a staged preference technique to the estimation of equity preferences. It is demonstrated that using choice modelling enables respondents' equity preferences to be elicited and distributional weights suitable for application in BCA to be estimated.

Estimating intergenerational utility distribution preferences

Resource management decisions influence not only the output of the economy but also the distribution of utility between groups within the community. The theory of Benefit Cost Analysis provides a means of incorporating this distributional change through the application of distributional or welfare weights. This paper reports the results of research designed to estimate distributional weights suitable for inclusion in a Benefit Cost Analysis framework. The findings of a choice modelling experiment estimating community preferences with respect to intergenerational utility distribution are presented to illustrate this innovative application of a stated preference technique.

Steve Bracks: quiet trailblazer

When Steve Bracks became Victorian Labor leader in February 1999, replacing the struggling John Brumby, he took over a party that despaired of the political ascendancy of Liberal premier Jeff Kennett.

Estimating intergenerational distribution preferences

Resource management decisions influence not only the output of the economy but also the distribution of utility between groups within the community. The theory of cost benefit analysis provides a means of incorporating distributional changes into the decision making calculus through the application of distributional or welfare weights. However, this practice has not been widely adopted in part due to difficulties in the estimation of distributional weights. This paper addresses this problem by using the stated preference method of choice modelling to estimate distributional weights suitable for inclusion in a cost benefit analysis framework. The findings of a choice modelling experiment designed to estimate community preferences with respect to intergenerational utility distribution illustrate the potential of this method in addressing distributional issues.

Decision-making in a social welfare context

This paper presents analysis of the decision-making strategies adopted by respondents when confronted with potential policy options that include changes in both aggregate levels of welfare and equity in distribution. The analysis is based on the results of a choice experiment designed to estimate intergenerational distributional preferences. Non-linear welfare functions are employed within a conventional conditional logit framework. The heuristics employed by respondents in the stated preference context provide valuable insights into the application of welfare principles by respondents in determining trade-offs between the potential changes in the well-being of different generations.