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Stated Preferences for Conservation Policies under Uncertainty: Insights on Individuals’ Risk Attitudes in the Environmental Domain

Michela Faccioli (), Laure Kuhfuss () and Mikolaj Czajkowski ()
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Michela Faccioli: The James Hutton Institute, Social, Economic and Geographical Sciences Group

No 2017-07, Working Papers from Faculty of Economic Sciences, University of Warsaw

Abstract: The outcome of a conservation policy is often subject to uncertainty. In stated preference valuation, there is increasing recognition that uncertainty affects preferences for environmental policies. However, there is also poor understanding regarding people’s perception of uncertainty per se and risk attitude. To shed more light on this, we designed a discrete choice experiment and compared preferences for environmental outcomes under climate change across two split samples, each confronted with a scenario where environmental outcomes are presented as either certain or uncertain (i.e. probabilistically) but displaying the same expected results. We find that, for an equal expected outcome, preferences vary between the certain and the uncertain treatment. These results indicate that risk attitudes impact stated preferences for conservation policies under uncertainty and reinforce the idea that uncertainty should be included in stated preference studies to provide more accurate and policy relevant results. Interestingly, we additionally find that risk attitudes appear to be both context- and individual- specific – the effect of uncertainty depends on the magnitude and direction of change of the environmental good and on individual’s socio-demographic characteristics.

Keywords: Stated preference valuation; uncertainty; risk attitude; climate change; conservation (search for similar items in EconPapers)
JEL-codes: D6 D81 Q20 Q51 Q54 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dcm, nep-env, nep-exp and nep-upt
Date: 2017
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Citations: View citations in EconPapers (2) Track citations by RSS feed

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http://www.wne.uw.edu.pl/index.php/download_file/3405/ First version, 2016 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:war:wpaper:2017-07

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