nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2008‒06‒07
two papers chosen by
Philip Yu
Hong Kong University

  1. Introducing a genetically modified banana in Uganda: Social benefits, costs, and consumer perceptions By Falck-Zepeda, José; Kilkuwe, Enoch; Wesseler, Justus
  2. Contingent Valuation of Competing Public Sector Programmes: An Experiment of Single versus Joint Evaluation By Cam Donaldson; Stephane Luchini; Jean-Paul Moatti; Christèle Protière

  1. By: Falck-Zepeda, José; Kilkuwe, Enoch; Wesseler, Justus
    Abstract: "Banana is a staple crop consumed by Ugandan households. The Uganda National Agricultural Research Organization has implemented conventional and biotechnology programs that seek improving bananas and address the crop's most important pest and disease problems. A major thrust is the development of genetically modified (GM) bananas. The purpose of this paper is to examine potential social welfare impacts of adopting a GM banana in Uganda. The study has three objectives. First, suggest and apply an approach to calculate reversible and irreversible benefits and costs of introducing a GM banana. The study applies a real option approach to estimate, ex ante, the maximum incremental social tolerable irreversible costs (MISTICs) that would justify immediate introduction of the technology. Second, suggest an approach for assessing producer/consumer preferences and willingness to pay (WTP) for introducing a GM banana. Finally, the paper discusses main implications for biosafety decision making for GM crops in Uganda. Results of MISTICs estimation for different scenarios indicate that in delaying the approval of a GM banana, Uganda foregoes potential annual benefits ranging approximately from US$179 million to US$365 million. Average annual MISTICs per household vary between US$34 and US$ 69. Results indicate that only if the average household is willing to give up at least US$38 per year to avoid introduction of a GM banana, should postponing an immediate release be considered. Results imply that although GM bananas promise vast benefits, realization of those benefits depends on consumers' perceptions and attitudes and the willingness to pay for the GM technology." from Author's Abstract
    Keywords: GM banana, Real option, Choice experiment, Biosafety, MISTICs,
    Date: 2008
  2. By: Cam Donaldson (University of Newcastle - University of Newcastle); Stephane Luchini (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales - CNRS : UMR6579); Jean-Paul Moatti (Faculté d'économie - Université de la Méditerranée - Aix-Marseille II, Epidémiologie et Sciences Sociales Appliquées à l'Innovation Médicale - INSERM : U379 - Université de la Méditerranée - Aix-Marseille II); Christèle Protière (Epidémiologie et Sciences Sociales Appliquées à l'Innovation Médicale - INSERM : U379 - Université de la Méditerranée - Aix-Marseille II)
    Abstract: In this paper, we compare single and joint evaluation (JE) of competing public sector programmes in a contingent valuation exercise. Using survey data aimed at evaluating WTP for cancer interventions (n = 2628), we disantangle two types of effects of JE: informational effects and sequence effects. By the former, we<br />mean: by presenting different programmes to respondents, they will acquire more information on each programme than they would if each programme was valued in isolation. Sequence effects are underisable and induced by the JE exercise itself: changing the order of the valuation sequence induces different WTP values.<br />Our results show that there are informational effects but no sequence effects. We therefore argue that JE approaches can be added to the armoury of techniques aimed at designing better survey instruments in a way that induces informational effects without incurring problems of sequencing.
    Keywords: Single Evaluation; Joint Evaluation Willingness to Pay; Contingent Valuation; Priorities Setting
    Date: 2008–05–28

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