SOME ISSUES IN DISCRETE RESPONSE CONTINGENT VALUATION STUDIES

Resource /Energy Economics and Policy,

Buying Time: Real and Hypothetical Offers

This paper provides the results of a field test of contingent valuation estimates within a willingness to accept framework. Using dichotomous choice questions in telephone-mail-telephone interviews, we compare responses to real and hypothetical offers to survey respondents for the opportunity to spend time in a second set of interviews on an undisclosed topic. Five hundred and forty people were randomly split between the real and hypothetical treatments. Our findings indicate no significant differences between people's choices with real and hypothetical offers. Choice models indicate the size of the offer and income were significant determinants of respondents' decisions, and these models were not significantly different between real and hypothetical offers.

Meta Analysis in Model Implementation: Choice Sets and the Valuation of Air Quality Improvements

We document the sensitivity of welfare estimates derived from discrete choice models to assumptions about the choice set. Such assumptions can affect welfare estimates through both the estimated parameters of the model and, conditional on the parameters, the substitution among alternatives. Our analysis involves estimates of the benefits of air quality improvements in Los Angeles based on discrete choices of neighborhood and housing. We further illustrate the use of meta analysis to document and summarize voluminous information derived from repeated sensitivity analyses.Meta analysis, random utility model, choice set, air quality, housing

Time and the Valuation of Environmental Resources

This paper considers the modeling strategies that have been used to incorporate time in revealed and stated preference methods for valuing environmental resources. After reviewing a subset of the economic models for describing time as an input to household production; time in creating habits and persistence in demand for particular services of environmental resources, and time as offering an opportunity for future consumption, the overview suggests that time has been used as a complement in production or consumption to marketed goods in each of these frameworks. The paper suggests two possible alternatives. This structure along with further restrictions to preferences or technology implies that there are other strategies for using revealed preference data to measure the economic value of changes in environmental quality.

Non-Market Valuation and the Household

The purpose of this paper is to describe the implications of the collective model of household behavior for the methods used to estimate the economic value of non-marketed environmental resources. The effects of public good and risk are considered, along with revealed and stated preference methods. To the extent the collective framework is adopted, then recover of individual preferences from household behavior requires distinguishing how preference and within household income allocations affect choices.

Benefit Transfer as Preference Calibration

This paper proposes and illustrates the use of a new approach to benefit transfer for the non-market valuation of environmental resources. It treats transfer as an identification problem that requires assessing whether available benefit estimates permit the parameters of a preference function to be identified. The transfer method proposed uses these identifying restrictions to calibrate preference parameters and bases the benefit estimates on that preference function. The approach is illustrated using travel cost, hedonic and contingent valuation estimates, as well as combinations of estimates. It has three potential advantages over conventional practice: (1) it allows multiple, potentially overlapping estimates of the benefits of an improvement in environmental quality to be combined consistently; (2) it assures the transferred estimates of the benefits attributed to a proposed change can never exceed income; and (3) it provides a set of additional "outputs" that offer plausibility checks of the benefit transfers.

PRICE, QUALITY, AND PESTICIDE RELATED HEALTH RISK CONSIDERATIONS IN FRUIT AND VEGETABLE PURCHASES: AN HEDONIC ANALYSIS OF TUCSON, ARIZONA SUPERMARKETS

National opinion polls indicate that pesticide residues on fresh fruits and vegetables remain an important concern of American consumers, despite a decade-long increase in per capita consumption levels for fresh fruits and vegetables. Increased availability of organically grown fruits and vegetables may change consumer produce purchase behavior which is often dominated by appearance considerations. Domestic consumers likely consider and tradeoff price, visual appearance, and health risk when buying fresh produce. This paper uses an hedonic framework to examine price, appearance, and health risk considerations made by Tucson, Arizona shoppers in 1994.Consumer/Household Economics, Demand and Price Analysis,

Measuring the Values for Time

Most economic models for time allocation ignore constraints on what people can actually do with their time. Economists recently have emphasized the importance of considering prior consumption commitments that constrain behavior. This research develops a new model for time valuation that uses time commitments to distinguish consumers' choice margins and the different values of time these imply. The model is estimated using a new survey that elicits revealed and stated preference data on household time allocation. The empirical results support the framework and find an increasing marginal opportunity cost of time as longer time blocks are used.

Estimating the General Equilibrium Benefits of Large Policy Changes: The Clean Air Act Revisited

This paper reports the first comprehensive approach for measuring the general equilibrium willingness to pay for large changes in air quality. It is based on a well defined locational equilibrium model. The approach allows estimation of households' indirect utility function and the underlying distribution of household types. With these estimates it is possible to compute a new locational equilibrium and the resulting housing prices in response to exogenous changes in air quality. This permits construction of welfare measures which properly take into consideration the adjustments of households in equilibrium to non-marginal changes in air quality. These types of measures are outside the scope of more traditional approaches. The empirical approach of this paper provides, for the first time, an internally consistent framework for estimation and applied general equilibrium welfare analysis. We compute the general equilibrium willingness to pay for the changes in air quality between 1990 and 1995. We implement our empirical framework using data from Southern California, an area which has experienced dramatic improvements in air quality during the past 20 years. Our findings are by and large supportive for our approach and suggest that accounting for general equilibrium effects in applied welfare can be especially important.