Learning design contingent valuation (LDCV): NOAA guidelines, preference learning and coherent arbitrariness

We extend the contingent valuation (CV) method to test three differing conceptions of individuals' preferences as either (i) a-priori well-formed or readily divined and revealed through a single dichotomous choice question (as per the NOAA CV guidelines [K. Arrow, R. Solow, P.R. Portney, E.E. Learner, R. Radner, H. Schuman, Report of the NOAA panel on contingent valuation, Fed. Reg. 58 (1993) 4601-4614]); (ii) learned or 'discovered' through a process of repetition and experience [J.A. List, Does market experience eliminate market anomalies? Q. J. Econ. (2003) 41-72; C.R. Plott, Rational individual behaviour in markets and social choice processes: the discovered preference hypothesis, in: K. Arrow, E. Colombatto, M. Perleman, C. Schmidt (Eds.), Rational Foundations of Economic Behaviour, Macmillan, London, St. Martin's, New York, 1996, pp. 225-250]; (iii) internally coherent but strongly influenced by some initial arbitrary anchor [D. Ariely, G. Loewenstein, D. Prelec, 'Coherent arbitrariness': stable demand curves without stable preferences, Q. J. Econ. 118(l) (2003) 73-105]. Findings reject both the first and last of these conceptions in favour of a model in which preferences converge towards standard expectations through a process of repetition and learning. In doing so, we show that such a 'learning design CV method overturns the 'stylised facts' of bias and anchoring within the double bound dichotomous choice elicitation format. (C) 2007 Elsevier Inc. All rights reserved.

Measuring the value to the public of pig welfare improvements: a contingent valuation approach

The welfare of farm animals is a policy area that has increased greatly in importance in recent years. When deciding whether a proposed policy should be implemented, it can be useful for policymakers to compare the costs of the proposed improvement with the perceived benefits. The costs are relatively straightforward to calculate but little is known about the benefits. The Contingent Valuation Method (CVM), a direct survey-based method, can be used to shed some light on this. This approach elicits the willingness-to-pay (WTP) for the provision of some public good or service. This paper reports the results of a contingent valuation study of the value of welfare improvements for growing pigs. Attitudes and opinions with regard to form animal welfare are explored and WTP elicited for various pig welfare improvements including increases in space allowance, environmental enrichment and research into improved pig housing design. The results reveal a positive WTP for these improvements. However, it is also noteworthy that a significant proportion of the general public is willing to pay nothing for these improvements. Overall, the study illustrates the usefulness of the CVM approach as a tool for policymakers in assessing the merits of possible policy initiatives affecting the welfare of animals.

Parametric and non-parametric estimates of willingness to pay for forest recreation in Northern Ireland: A discrete choice contingent valuation study with follow-ups

In this study we show that forest areas contribute significantly to the estimated benefits from om outdoor recreation in Northern Ireland. Secondly we provide empirical evidence of the gains in the statistical efficiency of both benefit and parameter estimates obtained by analysing follow-up responses with Double Bounded interval data analysis. As these gains are considerable, it is clearly worth considering this method in CVM survey design even when moderately large sample sizes are used. Finally we demonstrate that estimates of means and medians of WTP distributions for access to forest recreation show plausible magnitude, are consistent with previous UK studies, and converge across parametric and non-parametic methods of estimation.

A note on the warm glow of giving and scope sensitivity in contingent valuation studies

This note develops a behavioral framework to classify individual contingent valuation (CV) respondents in terms of the warm glow and altruistic motives in their WTP responses. We suggest that at least five possible behavioral categories for CV responses may exist, depending on the type of underlying preferences and whether respondents are satiated or non-satiated with respect to the good. An empirical example suggests that the warm glow motive may be present in the majority of bids, although its presence does not necessarily preclude scope sensitivity to the quantity/quality of an environmental good. (C) 2000 Elsevier Science B.V. All rights reserved.

Customs-Related Transaction Costs, Firm Size and International Trade Intensity

Customs are generally perceived as a time-consuming impediment to international trade. However, few studies have empirically examined the determinants and the impact of this type of government-imposed transaction costs. This paper analyses the role of firm size as a determinant of customs-related transaction costs, as well as the effect of firm size on the relationship between these costs and the international trade intensity of firms. The results of this study indicate that customs-related transaction costs repress international trade activities of firms, even at low levels of these costs. The paper identifies transaction-related economies of scale, simplified customs procedures and advanced information and communication technology as main determinants of customs-related transaction costs. It is shown that when these factors are taken into account, firm size has no effect on customs-related transaction costs. Policy implications are considered for firm strategy and public policy.

A Holistic vs. an Attribute-based Approach to Agri-Environmental Policy Valuation: Do Welfare Estimates Differ?

Different economic valuation methodologies can be used to value the non-market benefits of an agri-environmental scheme. In particular, the non-market value can be examined by assessing the public's willingness to pay for the policy outputs as a whole or by modelling the preferences of society for the component attributes of the rural landscape that result from the implementation of the policy. In this article we examine whether the welfare values estimated for an agri-environmental policy are significantly different between an holistic valuation methodology (using contingent valuation) and an attribute-based valuation methodology (choice experiment). It is argued that the valuation methodology chosen should be based on whether or not the overall objective is the valuation of the agri-environment policy package in its entirety or the valuation of each of the policy's distinct environmental outputs.

Do focus groups contribute anything to the contingent valuation process?

The qualitative aspects of the Contingent Valuation Method (CVM) are largely ignored by (environmental) economists. This paper aims to instigate a discussion on (a) the usefulness of qualitative data to the contingent valuation process in general; and (b) the use and applicability of the focus group method in particular. We consider the range and uses of focus groups within the CVM and highlight problems with their analysis that have, to date, largely been ignored. A potential solution to circumvent the problem of non-independence of group data is suggested. While there are several distinct and worthwhile uses for qualitative data, focus groups should not automatically be taken as the only or best method to produce these insights even though they are the major one considered in this article. (C) 1999 Elsevier Science B.V. All rights reserved.

Combining preference ordering and contingent valuation methods to assess non market benefit of alternative afforestation projects

The application of the contingent valuation method (CVM) in this paper incorporates a prior preference ordering of several alternative future afforestation programmes which could be implemented in Ireland over the next decade. This particular experimental design is thereby shown to reveal the potentially conflicting preferences of different groups within society. These findings are used to devise appropriate CVM scenarios to take account, not only of the efficiency gains of choosing a single policy alternative over others, but also the effects on the distribution of non market benefit between different groups within society, arising from choice between alternatives. (C) 1998 Elsevier Science Ltd. All rights reserved.