A comparison of contingent valuation and choice modelling with second-order interactions

Abstract

This study compares the welfare measures estimated from two different stated choice methods, contingent valuation method and choice modelling. The welfare measures are inferred from different assumptions about the utility function definition, like allowing for second-order interactions. The application involves the estimation of non-market values from alternative afforestation programmes in the Northeast of Spain. The two techniques are found to yield equivalent estimates of welfare change for identical afforestation programmes when the fully specified utility functions are used as the basis for the calculations. When elements of the utility functions, e.g., the second-order interactions effects, are omitted from the value estimation procedure, significant differences do occur between estimates derived using the two valuation techniques.

Consumer preferences in the design of airport passenger areas

“…First, a respondent is asked to make a discrete choice between two or more discrete alternatives in a choice set; second, the alternatives in a choice set are constructed by means of an experimental design that varies one or more attributes within and/or between respondents in such a way that information related to preference parameters of an indirect utility function can be inferred (Carson & Louviere, 2011;Kuhfeld, 2010). There is some evidence that discrete choice experiments are better in estimation and provide a better understanding of the choices made by respondents than the contingent valuation method using a referendum approach (Mogas, Riera, & Bennett, 2006).…”

Investigating fishers’ preferences for the design of marine Payments for Environmental Services schemes

“…The first step in implementing the CE is the determination of realistic attributes and attribute levels which define the good to be valued (Mogas et al, 2006;Bennett & Blamey 2001;Hanley et al, 2001). The good here is a hypothetical marine PES management plan that comprises two restriction attributes and a payment attribute.…”

Private household demand for vehicles on alternative fuels and drive trains: a review

“…In CV, value elicitation is whole-product based by asking respondents to express their maximum willingness to pay (WTP) for a given improvement of a public good provision level (e.g., cleaning up a lake) or for public goods aspects of a market good (e.g., eco-labeled goods) [44,63]. In the dichotomous CV design (yes/no answers), respondents accept or refuse a payment for a change in the quality or the quantity of a good at a given cost, while open-ended questions (such as payment cards and bidding games) provide a way to elicit the respondent's maximum WTP [63,64]. CVand CM offer rather different merits and their use entirely depends on the purpose of the study under consideration.…”