nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2011‒07‒02
five papers chosen by
Philip Yu
Hong Kong University

  1. Comparing Scientist and Public Preferences for Conserving Environmental Systems: A Case of the Kimberleyâs Tropical Waterways and Wetlands By Rogers, Abbie; Cleland, Jonelle
  2. Willingness to pay for kerbside recycling the Brisbane Region By Gillespie, Robert; Bennett, Jeff
  3. Willingness to pay for recycling food waste in the Brisbane Region By Gillespie, Robert; Bennett, Jeff
  4. Ordering effects and strategic response in discrete choice experiments By Scheufele, Gabriela; Bennett, Jeff
  5. Testing for value stability with a meta-analysis of choice experiments: River health in Australia By Rolfe, John; Brouwer, Roy

  1. By: Rogers, Abbie; Cleland, Jonelle
    Abstract: This study uses choice modelling to investigate public and expert preference divergence through a valuation of the Kimberleyâs tropical waterways and wetlands in Western Australia. A sample of Australian tropical river scientists participated in an identical survey to the West Australian public. Within the public sample, a split survey design is utilised to examine the effects of information on preferences â a low information version provided sufficient information for respondents to participate in the survey, while a high information version provided a more thorough and detailed description of the attributes. Divergent preferences are apparent between the public and scientist samples. This is illustrated through two key results: first, an attempt to merge the data for each of the samples is rejected; and second, there are differences in conservation preferences. The scientists had stronger preferences to protect system based attributes and threatened species, and were generally not willing to pay to protect iconic attributes. The public, on the other hand, held positive and more evenly spread values for all attributes. Information had an impact on public preferences, particularly through the rejection of a combined low/high information model, but also with respect to the iconic species attribute, where there is a pattern of decreasing willingness to pay as information level increases.
    Keywords: Environmental Economics and Policy,
    Date: 2010–12
  2. By: Gillespie, Robert; Bennett, Jeff
    Abstract: Waste policy in Australia has a strong focus on kerbside recycling. This has a range of costs and benefits to the community, including non-market benefits. However, in Australia, there has been little investigation of household willingness to pay for kerbside recycling. This paper used mixed logit choice modelling to estimate the willingness to pay of households in Brisbane, Australia for kerbside waste collection services including kerbside recycling. It was found that households in Brisbane have a positive and significant willingness to pay of $131.49 per annum for fortnightly kerbside recycling and would be willing to pay an additional $18.30 to increase the frequency of this service to weekly. The utility of respondents was, however, found to decline by $34.18 per year if general waste collection increased from weekly to twice a week. Based on the assumptions used in this study it would appear that the willingness to pay for kerbside recycling exceeds the net financial costs of this service, suggesting that the scheme is economically efficient. However, the reported economic values for recycling may overstate the communityâs true willingness to pay if household responses to the choice questions were confounded by their underlying perceptions about the environmental and resource sustainability benefits of recycling.
    Keywords: Environmental Economics and Policy, Research Methods/ Statistical Methods,
    Date: 2011–03
  3. By: Gillespie, Robert; Bennett, Jeff
    Abstract: Kerbside recycling in Australia has focused on paper, cardboard, plastics and bottles and in some areas green waste. Another area for potential kerbside recycling is organic waste. This study uses a dichotomous choice contingent valuation format with follow-up open-ended willingness to pay question to estimate the household willingness to pay for the introduction of a kerbside recycling scheme for kitchen waste. Two provision rules were used. The first sample split contained a majority decision rule while the second sample split contained a provision rule where participation is voluntary. Households across the Brisbane statistical sub-division currently pay in the order of $250 per annum for their kerbside waste collection scheme. This study indicates that on average Brisbane households would be WTP an additional $32 to $35 per year for a general waste bin where food waste is split from general waste. There was no significant difference in results between sample splits with majority or voluntary provision rules. Whether the provision of a food waste recycling scheme is economically efficient requires a consideration of all the potential costs and benefits. Other relevant costs and benefits for inclusion in a benefit cost analysis would include those associated with bin replacement, any additional collection and transport costs, composting costs, revenues from compost sales and avoided landfill costs. If a compulsory food waste recycling scheme could be provided to all households for less than $32 to $35 per household per annum then the benefits of the scheme would exceed the costs and would be considered to be economically efficient and desirable from a community welfare perspective. Given the difficulties of estimating precise WTP values from dichotomous choice data, any BCA of a compulsory scheme incorporating the results of this study should undertake sensitivity testing that includes the range of values reported including dichotomous choice and open-ended means to determine the robustness of BCA results to variations in the welfare estimate. Notwithstanding, the results of any BCA, decision-makers also need to be cognisant of the high proportion of respondents who did not support a kerbside food waste recycling scheme. The data from the study could also be used to undertake a BCA of a voluntary scheme.
    Keywords: Environmental Economics and Policy,
    Date: 2011–03
  4. By: Scheufele, Gabriela; Bennett, Jeff
    Abstract: This study explores ordering effects and response strategies in repeated binary discrete choice experiments (DCE). Mechanism design theory and empirical evidence suggest that repeated choice tasks per respondent introduce strategic behavior. We find evidence that the order in which choice sets are presented to respondents may provide strategic opportunities that affect choice decisions (âstrategic responseâ). The findings propose that the âstrategic responseâ does not follow strong cost-minimization but other strategies such as weak cost-minimization or good deal/ bad deal heuristics. Evidence further suggests that participants, as they answer more choice questions, not only make more accurate choices (âinstitutional learningâ) but may also become increasingly aware of and learn to take advantage of the order in which choice sets are presented to them (âstrategic learningâ).
    Keywords: discrete choice experiments, incentive compatibility, mixed logit models, ordering effects, repeated binary choice task, response strategies, Environmental Economics and Policy,
    Date: 2010–03
  5. By: Rolfe, John; Brouwer, Roy
    Abstract: While meta-analysis is typically used to identify value estimates for benefit transfer, applications also provide insights into the potential influence of design, study and methodological factors on results of non-market valuation experiments. In this paper, a metaanalysis of sixteen separate choice modelling studies in Australia with 130 individual value estimates relating to river health are reported. The studies involved different measures and scales of river health, so consistency was generated by transforming implicit prices from each study into a common standard of WTP per kilometer of river in good health. Tobit models have been used to identify the relationships between the dependent variable (WTP/km) and a number of variables. The results demonstrate that values are sensitive to marginal effects, with lower WTP/km for larger catchments, and higher WTP/km when river health is in decline. Values are also lower when river health has been defined by a subset of benefit types, such as recreation uses, vegetation health, fish health or bird populations. While there is evidence that the framing of the choice sets and descriptions of attributes have systematic impacts on values, there is very little evidence that choice dimensions, collection methods, sample sizes, response rates, statistical methods or publication status have influenced value estimates. Tests of apparent author effects show that these become insignificant when other explanatory variables are included in the models.
    Keywords: non-market valuation, choice modelling, meta analysis, river health, Environmental Economics and Policy,
    Date: 2011–03

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