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The Impacts of Attribute Level Framing and Changing Cost Levels on Choice Experiments Value Estimates

Marit Kragt and Jeffrey Bennett

No 59091, 2010 Conference (54th), February 10-12, 2010, Adelaide, Australia from Australian Agricultural and Resource Economics Society

Abstract: Choice Experiments (CE) are increasingly used to estimate the values of environmental goods and services. CE questionnaires represent the environmental good under valuation by varying levels of non-market attributes. Inclusion of a cost attribute enables the estimation of monetary values for changes in the non-market attributes presented. The ways in which the levels of the attributes are described in the survey - the ‘attribute frame’ - may affect respondents’ choices. Furthermore, varying levels of the cost attribute may impact CE value estimates. The challenge for CE practitioners is to identify the ‘appropriate’ attribute frames and cost levels. In this paper, the impacts of changing cost levels and the impacts of describing non-market attributes as absolute levels or in relative terms are assessed. These tests were performed using data from a CE on catchment management in Tasmania, Australia. Contrary to a priori expectations, including explicit information cues about relative attribute levels in the choice sets is found not to affect stated preferences. However, comparisons between different split samples provide evidence that respondents’ preferences are impacted by changing the range in cost attribute levels, with higher levels leading to significantly higher estimates of WTP for one of the three environmental attributes.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 24
Date: 2010
New Economics Papers: this item is included in nep-dcm and nep-env
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DOI: 10.22004/ag.econ.59091

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