Economic valuation of policies for managing acidity in remote mountain lakes: Examining validity through scope sensitivity testing

Abstract

The paper introduces the reader to the contingent valuation method for monetary valuation of individuals' preferences regarding changes to environmental Aquat. Sci. 67 (2005) 274-291 Aquatic Sciences goods. Approaches to the validity testing of results from such studies are discussed. These focus upon whether findings conform with economic-theoretic expectations, in particular regarding whether valuations are sensitive to the size (or 'scope') of environmental change being considered, and whether they are invariant to alterations in study design which are irrelevant from the perspective of economic theory. We apply such tests to a large sample study of schemes to alter the acidity levels of remote mountain lakes. Results suggest that, when presented with environmental changes which respondents are concerned about, their values exhibit scope sensitivity and conform to theoretical expectations, and therefore could be used for formulating policy. However, when presented with changes which respondents feel are trivial, their values fail tests of theoretical consistency and are not scope sensitive, and therefore cannot be used within economic appraisals. Interestingly we find that qualitative focus group analyses are good indicators of whether a given change is likely to be considered trivial or not and therefore whether scope sensitivity tests are likely to be satisfied.

Public Attitudes, Preferences and Willingness to Pay for River Ecosystem Services

“…Studies have shown that, compared with other valuation techniques, choice experiments provide more robust estimates of the value of non-market goods and services [68], particularly when estimating improvements in environmental quality. According to Bateman, et al [69], the choice experiment technique uses a survey instrument to represent environmental goods and services as a set of attributes, where the levels of the attributes vary across the choice set, thereby allowing assessments of how individuals react to different attribute levels [70]. Many studies, such as those by Morrison, et al [71] and Carlsson, et al [72], have applied the choice experiment approach for evaluating non-market goods and services in wetlands and their findings demonstrated that the choice experiment approach can improve the understanding of ecological attributes, help policymakers by providing information about the values of various options and identify the ecological attributes that influence the perceived values of wetlands for individuals.…”

Assessing community values for reducing agricultural emissions to improve water quality and protect coral health in the Great Barrier Reef

“…[15] Encapsulating the intricacies of a complex ecological process into a realistic stated preference valuation scenario presents many challenges [Christie et al, 2006;Boyd and Krupnick, 2009]. Previous attempts to communicate impacts of water quality in concise ways have included the use of water quality ladders [e.g., Carson and Mitchell, 1993], effects on species ladders [e.g., Bateman et al, 2005], and indicator attributes such as water clarity [e.g., Kosenius, 2010]. In this study, changes in inputs were presented in the survey in terms of ''water quality units.''…”

Valuation of Wildlife: Revising Some Additional Considerations for Scope Tests

“…Smith and Osborne (1996) suggested examining the potential effects of the perceived substitutes of the resources being valued in the context of scope tests. Following the recommendations of Bateman et al (2005), we also incorporate biological information that helps respondents evaluate the specified gains of the different recovery levels. As far as we know, no other study followed the above-mentioned recommendations, including precise biological information about the relative magnitude of the stocks above and below the MVP and the degree of uniqueness of the good in the valuation scenario for conducting a scope test.…”

“…***Statistical significance at a 5 0.001; **statistical significance at a 5 0.01; *statistical significance at a 50.1. Bateman et al (2005) discussed the possibility of negative scope test results and proposed two possible explanations. The first is that the marginal value of increments of size may be so small that it is masked by statistical error.…”

“…For this second reason, they propose conducting focus groups to test the relevance of the changes in scope for the respondents. In order to avoid this last problem mentioned by Bateman et al (2005), in a second treatment, all participants were informed about each biological population level and the species status abroad so as to highlight the relevance of the proposed change. Table 6 presents the results for the WTP regressions when respondents are informed about the existence of other common murre colonies in northern Europe and their migrations to Galicia.…”