Discrete Choice Experiments in Developing Countries: Willingness to Pay Versus Willingness to Work

Abstract

A concern when conducting stated preference valuation studies in rural developing or very low income contexts is the use of monetary willingness to pay (WTP) estimates. In circumstances where cash incomes are extremely low, a significant proportion of the population are not engaged in waged labour and the exchange of goods or services is augmented through barter or work exchange, the role of money is likely to be different from that within an urban developed setting. As such, ability to pay using money may be impaired and downwardly biased when compared with other mediums of exchange. In recognition of this several studies have used hypothetical labour contributions as payment vehicles and a common finding is that households are more often willing to contribute labour than they are money. In this paper we present the results of a split sample DCE using money and labour contributions as payment vehicles for improved drinking water quality in Kandal Province, Cambodia. We find little differences between the payment vehicles in terms of attribute non-attendance, marginal utilities of attributes or derived welfare values. We argue that this provides support for the use of WTP in rural developing areas where there are functioning labour markets.

Sustainable financing of a national Marine Protected Area network in Fiji

“…Current literature supports our use of non-monetary payments as three quarters of respondents were unwilling to pay for MPA management complements (Gibson et al, 2016). This is consistent with community stakeholders having little consideration for payment vehicles because wellbeing becomes the priority when selecting WTP or WtCT (Coulthard et al, 2017).…”

“…Given that proximity to a fishing market or lack thereof, dependence on marine resources, food security and income are variables most influencing WtCT and WTP, respondents are conveying a willingness to contribute work-time (Gibson et al, 2016). Similarly, O'Garra (2009) attributed time not spent managing the MPA to livelihood generating activities for income, food and community benefits.…”

Estimating Residents’ Preferences of the Land Use Program Surrounding Forest Park, Taiwan

“…To sum up, the forest manager could think about a potential land use program which contains both ecotourism development and natural conservation based on the key attributes, and creates a better ecosystem service environment in the near future. Other issues included creating an initial mechanism for local residents with an agri-environmental program [13] and willingness to contribute to the land use program in the near future [28,36]. This pilot study could generate useful information to demonstrate possible land-use management programs in the forest park with respect to the ecosystem services.…”

“…The distribution of the final CE questionnaire started in October of 2015. Based on the above discussion, seven characteristics were included as CE attributes in the design: agricultural farming type [24,25], biodiversity [6,16,26], water provision [12], land use type [6,10,13,26,27], ecotourism mode [13], WTP, and WTW [6,13,26,28], as well as the levels of the attributes in relation to ecosystem services, as shown in Table 1. Agricultural production provides nutrition and health for human society [29].…”

“…Rai and Scarborough [36] pointed out that the respondent will increase the labor time to participate in an environmentally friendly program. Furthermore, past studies used the labor times as a tool, and found that households are more willing to contribute labor time than money [28]. Thus, we integrated the WTP and WTW into the CE set to measure the land use preference.…”