Valuing the non-market production of agriculture

As a consequence of the negotiations for a new agricultural policy of the EU the multifunctionality of agricultural production has come into new prominence in the public. The philosophy that subsidies for the agricultural sector should be calculated not only by agricultural market production but also according to agricultural noncommodity production like e.g. the conservation of the countryside, makes it necessary to assess the social value of this part of agricultural production. In this paper we scrutinize the welfare theoretical background of the economic valuation of non-market production as well as the existing practical valuation techniques. Further, the applicability of these techniques to the valuation of agricultural noncommodity production is considered.valuation of non-market goods, cost-benefit analysis, contingent valuation, multifunctionality of agriculture, Environmental Economics and Policy, Research Methods/ Statistical Methods,

Allowing for Household Preferences in Emission Trading - A Contribution to the Climate Policy Debate

In the context of emission trading it seems to be taken as given that people's preferences can be ignored with respect to the whole process of fixing emission targets and allocating emission permits to polluters. With this paper we want to reopen the debate on how citizens can be involved in this process. We try to show how citizen preferences can be included in the process of pollution control through emission trading. We propose an emission trading system where all emission permits are initially allocated to households who are then allowed to sell them in the permit market or to withhold (at least some of) them in order to reduce total pollution. This proposal tries to overcome the fundamental disadvantage of traditional permit systems which neglect consumer preferences by solely distributing emission permits to producers/polluters. In our system the property right to nature is re-allocated to the households who obtain the opportunity of reducing actual emissions according to their personal preferences by withholding a part or all of the emission permits allotted to them. Such a change in environmental policy would mark a return to the traditional principles of consumer sovereignty by involving households (at least partially) in the social abatement decision process instead of excluding them. Another advantage of admitting households to the TEP market as sellers or buyers of permits is that this increases the number of agents in the permit market and thus significantly reduces the possibilities of strategic market manipulations.Environmental policy, tradable emission permits, climate policy, consumer sovereignty

Allowing for household preferences in emission trading-A contribution to the climate policy debate

In the context of emission trading it seems to be taken as given that people's preferences can be ignored with respect to the whole process of fixing emission targets and allocating emission permits to polluters. With this paper we want to reopen the debate on how citizens can be involved in this process. We try to show how citizen preferences can be included in the process of pollution control through emission trading. We propose an emission trading system where all emission permits are initially allocated to households who are then allowed to sell them in the permit market or to withhold (at least some of) them in order to reduce total pollution. This proposal tries to overcome the fundamental disadvantage of traditional permit systems which neglect consumer preferences by solely distributing emission permits to producers / polluters. In our system the property right to nature is re-allocated to the households who obtain the opportunity of reducing actual emissions according to their personal preferences by withholding a part or all of the emission permits allotted to them. Such a change in environmental policy would mark a return to the traditional principles of consumer sovereignty by involving households (at least partially) in the social abatement decision process instead of excluding them. Another advantage of admitting households to the TEP market as sellers or buyers of permits is that this increases the number of agents in the permit market and thus significantly reduces the possibilities of strategic market manipulations.Environmental policy; tradable emission permits; climate policy; consumer sovereignty

Constructing a Preference-oriented Index of Environmental Quality - A welfare theoretical generalization on the concept of environmental indices -

Environmental Valuation

Equity and Aggregation in Environmental Valuation

Environmental valuation studies aim at the assessment of the social benefits or the social costs caused by some change in environmental quality (in the broadest sense). The most popular field of application of environmental valuation studies is project appraisal where the benefits arising from some environmental project (measured in terms of people's willingness to pay for that project) are assessed and confronted with the costs of the project or with the benefits from some alternative project if a choice has to be made between different projects. A closer look at the results of empirical valuation studies shows that in many surveys a negative correlation between the number auf household members and the willingness to pay (WTP) stated by a household for a project can be observed. These results are rather puzzling because in larger households more people are going to benefit from an environmental improvement than in small households. A plausible explanation for these results is that household budgets are tighter for large households than for smaller households with the same household income. Therefore, large households must state a smaller WTP for a project than smaller households with the same income and the same preferences. This might have consequences for the allocation of public funds in all cases where the realization of a specific environmental project depends on the absolute value of the aggregate social benefits it generates. In order to calculate the social benefits typically the WTPs of the different households affected by that project are added up. In this aggregation process the members of larger households have a lower weight and, therefore, their WTP has a smaller impact on the decision if a certain project is realized or not. The reason for this violation of the principle of horizontal equity is that for the computation of the social benefits not individual but household WTPs are aggregated. In this paper we suggest to use household equivalence scales for the evaluation of WTP data in order to reduce this discrimination of the members of large families. We demonstrate the effects of equivalence scales on the results of environmental valuation surveys using an empirical study carried out in Eastern Germany.contingent valuation; Environmental Valuation; Equity

Sustainability and regional development

While sustainable development is often viewed as a task for national governments this paper asks what can be done on a regional level. The first part of the paper deals with the general principles of sustainable development according to the concept of the sustainability triangle are explained. It is shown that while economic sustainability prevails during the first stages of the development of a country at a later stage social and environmental sustainability become essential for the mid- and long-term development and stability of an economy. In the second part it is shown that sustainable development is not a task for central government alone but is also an important challenge for regional governments. Some tasks necessary for a sustainable development like e. g. groundwater protection can even be better executed on a regional level. Therefore, special emphasis will be put on water protection in this part of the paper. In spite of the responsibility to be taken by regional governments the existence of significant spillover effects between regions makes it necessary to coordinate the policy between central government and regional governments as well as between different regional governments in order achieve overall efficient results

Getting people involved : a preference-based approach to water policy in China

Market-oriented environmental policy instruments like taxes and fees or regulatory policy instruments like rationing are typically recommended in order to set incentives for citizens to make a sparing use of water. What is often overlooked in this context is that these instruments provoke resistance and non-compliance of citizens if they do not share the values underlying such a policy. Enforcing compliance with environmental policy instruments requires strict monitoring and the prosecution of trespassers and can be rather costly for government. The resistance to government policy and the incentives to avoid or evade the respective policy measures are the greater the less these instruments are in accordance with people's preferences, i. e. the less people accept these instruments and the goals they serve as reasonable. Compliance enforcement costs are mainly monitoring costs to identify trespassers and administration costs for their prosecution. This paper deals with possibilities to reduce such compliance costs by closing the gap between people's preferences on the one hand and government policy on the other in the case of water preservation in China

Respondent incentives in contingent valuation: The role of reciprocity

--public expenditures,environmental valuation,cost-benefit analysis,contingent valuation method,respondent incentives,reciprocity,reforestation

The Role of Participation in CVM Survey Design: Evidence from a Tap Water Improvement Program in Northern Thailand

In the environmental economics literature results from contingent valuation mail surveys (MS) are usually considered less reliable than results from face-to-face surveys (FtF). This is mostly due to low response rates and self-selection effects of the respondents. However, MS are much less costly than FtF surveys so that there exists a strong need to make MS more reliable in order to save costs for environmental policy makers. This paper proposes a participatory procedure of survey design in order to improve MS questionnaires. In an empirical study of water quality improvement it is demonstrated that this procedure yields results identical to those of a FtF survey. In contrast to focus groups commonly applied in contingent valuation, we are able to show with our empirical study that much better results can be obtained by conducting group meetings with respondents from a preceding mail survey. Their pre-information of the project and experience with the questionnaire as well as their high motivation to get involved proved to be advantageous for efficient and productive group discussions. Our participatory questionnaire design resulted in a doubling of the response rate and a significant reduction of respondent self-selection. Further, alternative willingness-to-pay elicitation question formats were tested in the context of Thailand. For the dichotomous choice format strong anchoring and "yea"-saying effects were detected so that the use of this format cannot be recommended here. In contrast, the payment card format was found to perform well in this study.contingent valuation, water quality improvement, participatory techniques, mail surveys, elicitation question formats, Resource /Energy Economics and Policy, D6, H4, L3, Q25, Q51,

Non-trading behaviour in choice experiments

This paper addresses a methodological problem of choice experiments, namely the problem that respondents sometimes avoid the intellectual effort of thoroughly considering the trade-offs between different alternatives that are the essence of every choice experiment, and tick instead the next best alternative without the necessary deliberation. This kind of behaviour which is called "nontrading" in the respective literature calls into question the validity of choice experiments. In this paper, which is based on an online choice experiment concerned with consumers tastes for table grapes with 1,000 participants, we suggest possibilities to identify potential non-traders not only by their answering behaviour but also by some general characteristics we found to be typical of this kind of respondent