Does respondent’s perceived knowledge of the status quo affect attribute attendance and WTP in choice experiments? Evidence from the Karapiro Catchment Freshwater streams

Dan Marsh, Lena Mkwara and Riccardo Scarpa

No 96809, 2010 Conference, August 26-27, 2010, Nelson, New Zealand from New Zealand Agricultural and Resource Economics Society

Abstract: In environmental valuation studies with stated preference methods researchers often provide descriptions of status quo conditions which may differ from those perceived by respondents. Ignoring this difference in utility baselines may affect the way attributes are attended to in choice tasks and further affect the magnitude of utility changes and hence bias the implied estimates of benefits from the proposed environmental policies. We investigate this issue using data from a choice experiment on a community’s willingness to pay for water quality improvements in streams. About 60% of respondents perceived the description of the quality of water in streams to be better than the one we provided in our scenario. Our results show some differences in serial attribute non-attendance between respondents who were provided with our baseline description of the status quo and those who used their own perceived baselines. The results further reveal some differences in attribute non-attendance in the two split samples within respondents who used their own descriptions of the status quo conditions. Generally we note that non-attendance to cost was higher in respondents who reported lower levels of water quality than those who perceived water quality to be higher. However, we find mixed results in terms of the willingness to pay for water quality improvements.

Keywords: Community/Rural/Urban Development; Environmental Economics and Policy; Health Economics and Policy; Land Economics/Use (search for similar items in EconPapers)
Pages: 22
Date: 2010-08
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Persistent link: https://EconPapers.repec.org/RePEc:ags:nzar10:96809

DOI: 10.22004/ag.econ.96809

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