Prominent numbers in DCE cost vectors: A review and an application to wind energy

Pierre-Alexandre Mahieu (), Klaus Glenk () and Jürgen Meyerhoff ()
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Pierre-Alexandre Mahieu: LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Nantes Univ - IAE Nantes - Nantes Université - Institut d'Administration des Entreprises - Nantes - Nantes Université - pôle Sociétés - Nantes Univ - Nantes Université
Klaus Glenk: SRUC - Scotland's Rural College
Jürgen Meyerhoff: TUB - Technical University of Berlin / Technische Universität Berlin

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Abstract: Nearly all discrete choice experiments in environmental valuation have a cost attribute to estimate willingness to pay for the goods and services in question. The composition of the cost vector, however, has received little attention in the literature so far. This paper focuses on whether or not the cost vector should include "prominent amounts" (e.g., €1, €2, €5, €10, €20, €50). On the one hand, these amounts are familiar to participants as they are used in everyday life (e.g., coins or banknotes). On the other hand, respondents may not consider the amounts to reflect the cost of environmental programs, affecting credibility. In a review of published discrete choice experiment articles on wind energy, we find little information on how the levels of the cost attribute vectors were chosen and why prominent amounts are (not) included, reflecting the lack of guidance in the literature. In a split-sample survey on renewable energy, we find that the composition of the cost vector does not affect choice frequencies or the perceived difficulty of the task. However, we observe that the cost vector impacts credibility, suggesting that it may impact the validity of the welfare estimates.

Keywords: Prominent numbers; Discrete choice experiment; Cost vector; Payment consequentiality; Renewable energy (search for similar items in EconPapers)
Date: 2026-02
Note: View the original document on HAL open archive server: https://nantes-universite.hal.science/hal-05626914v1
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Published in Resource and Energy Economics, 2026, 85, pp.101551. ⟨10.1016/j.reseneeco.2025.101551⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05626914

DOI: 10.1016/j.reseneeco.2025.101551

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