understanding heterogeneous preferences in random utility models a latent class approach a finite mixture approach toconditional logit models is developed in whichlatent classes are used to promoteunderstanding of systematic heterogeneity the model is applied to wilderness recreationin which a branded choice experiment involvingchoice of one park from a demand system wasadministered to a sample of recreationists the basis of membership in the classes orsegments in the sample involved attitudinalmeasures of motivations for taking a trip aswell as their stated preferences overwilderness park attributes the econometricanalysis suggested that four classes of peopleexist in the sample using the model toexamine welfare measures of some hypotheticalpolicy changes identified markedly differentwelfare effects than the standard singlesegment model and provided insight into thedifferential impact of alternative policies

political competition and the politicization of the state in east central europe the expansion and politicization of the postcommunist state even among the reform leaders of czech republic hungary poland and slovakia has confounded early expectations that the state would s

the link between response time and preference variance and processing heterogeneity in stated choice experiments abstract in this article we utilize the time respondents require to answer a self administered online stated preference survey while the effects of response time have been previously explored this article proposes a different approach that explicitly recognizes the highly equivocal relationship between response time and respondents choices in particular we attempt to disentangle preference variance and processing heterogeneity and explore whether response time helps to explain these three types of heterogeneity for this we divide the data ordered by response time into approximately equal sized subsets and then derive different class membership probabilities for each subset we estimate a large number of candidate models and subsequently conduct a frequentist based model averaging approach using information criteria to derive weights of evidence for each model our findings show a clear link between response time and utility coefficients error variance and processing strategies our results thus emphasize the importance of considering response time when modeling stated choice data

investigating m3 money demand in the euro area abstract euro area monetary growth has exceeded its target since 2001 likewise recent empirical studies did not find evidence in favour of a stable long run money demand function in contrast to the bulk of the literature we are able to identify a stable long run money demand relationship this result is obtained when the analysis is done without the short run homogeneity restriction between money and prices the basic equation can be improved by allowing for asymmetric adjustment in a low inflation environment opportunity costs of holding money have decreased thus the apparent monetary overhang is reconciled within standard models

political competition and policy adoption market reforms in latin american public utilities on y docencia econ omicas this article shows that political competition generates incentives that affect the pace of adoption of market reforms in the context of policy convergence previous work shows the effect of financial and technological pressures in promoting policy convergence and the impact of institutional constraints on shaping the pace of policymaking controlling for these effects this article demonstrates the policy effects of political competition and ideological polarization even at a time when ideological policy differences seem to be fading due to policy convergence this article studies policy adoption using duration analysis for the 18 countries of latin america during the 1985 2000 period when most of the market reforms in public utilities were adopted s tudies of market reforms in latin america have typically emphasized the common financial and technological pressures that limited the ability of incumbents to impose their ideological preferences on policy adoption during the 1980s and 1990s this article shows that although it is true that the ideology of incumbents cannot fully explain policy adoption political competition and the relative ideology of challengers did shape the incentives of policymakers and thus played a significant role in the adoption of market reforms the article shows these effects on the market reforms of latin american public utilities which have been widely regarded as an example of policy convergence market oriented reforms in telecoms and electricity including the privatization of assets the liberalization of markets and the separation of regulatory authority from operations spread rapidly around the globe and especially through latin america

protest responses and willingness to pay attitude toward paying for stormwater pollution abatement abstract in contingent valuation cv surveys there is often a proportion of individuals who are not willing to pay to obtain avoid an increase decrease in some attribute of a particular environmental public good some of these respondents might protest an aspect of the cv survey e g payment vehicle or the behavioral intention i e willingness to pay wtp constituting the measure of economic value respondents attitudes toward the behavior of paying for a particular public good may contribute to the decision to pay independent of other explanatory variables such as the price of the intervention household income and methodological characteristics of the cv survey moreover attitude toward paying for the good may manifest in protest responses as a reaction to higher prices and methodological factors e g the payment vehicle to the extent that protest beliefs are dependent on such matters of survey design they may be alleviated through changes in cv methodology however to the extent that protest beliefs are a reaction to the act of paying methodological remedies may not be effective cv surveys of stormwater pollution abatement were conducted in four australian state capital cities the surveys differed with respect to the type of pollution abatement intervention the payment regime the vector of prices used in the dichotomous choice question and the institution responsible for implementing the stormwater pollution intervention protest beliefs were measured for all respondents irrespective of their responses to the wtp question results indicated that attitude toward paying underpinned protest beliefs regarding the role of government in stormwater management and individual rights to unpolluted waterways this attitude was present in each city sample despite methodological differences between the cv surveys attitude toward paying explained variability in wtp and was a larger predictor than was price household income was significantly associated with attitude toward paying and this relationship was also invariant over city samples protest beliefs were not independent of either the wtp question or demographic factors such as household income rather these beliefs were related to wtp through attitudes toward the act of paying for stormwater pollution abatement censoring protest responses in the present study would bias cv samples toward those individuals who are favorably disposed toward paying for environmental public goods and those from higher income households

modeling individual preferences for energy sources the case of iv generation nuclear energy in italy the planned re introduction of nuclear energy in italy was abandoned in the aftermath of the fukushima nuclear accident twenty years earlier soon after the chernobyl accident italians had also voted against nuclear energy however a new nuclear energy technology i e fourth generation is under research and development this paper investigates its social acceptance by means of a robust methodology employing 1 choice experiments 2 structural equation modeling and 3 information treatments within an online nation wide survey results show a great deal of preference heterogeneity the majority of the sampled respondents oppose new nuclear plants in italy with some not willing to accept any monetary compensation at all however another segment of respondents more confident that fourth generation nuclear energy goals will be achieved show a modest support towards the implementation of new nuclear projects additional variables were found to affect opposition

a small monetary system for the euro area based on german data previous euro area money demand studies have used aggregated national time series data from the countries participating in the european monetary union emu however aggregation may be problematic because macroeconomic convergence processes have taken place in the countries of interest therefore in this study quarterly german data until 1998 are combined with data from the euro area from 1999 until 2002 and these series are used for fitting a small vector error correction model for the monetary sector of the emu a stable long run money demand relation is found for the full sample period moreover impulse responses do not change much when the sample period is extended by the emu period provided the break in the extended data series is captured by a simple dummy variable copyright 2006 john wiley sons ltd

a comparison of contingent preference models i compare the informational efficiencies of contingent rating contingent ranking and two contingent paired comparison methods as alternatives to the referendum contingent valuation method the contingent rating method is hypothesized to be most efficient because ratings convey information on preference intensities and can uniquely represent respondent indifference or ambivalence survey data on hunters ratings of alternative hypothetical hunting trips are used to estimate four alternative indirect utility models from which marginal willingness to pay measures for individual trip attributes are derived model comparison wtp estimates and their confidence intervals confirm the relative efficiency of the contingent rating approach

nonlinear income effects in random utility models random utility models rums are used in the literature to model consumer choices from among a discrete set of alternatives and they typically impose a constant marginal utility of income on individual preferences this assumption is driven partially by the difficulty of constructing welfare estimates in models with nonlinear income effects recently mcfadden 1995 developed an algorithm for computing these welfare impacts using a monte carlo markov chain simulator for generalized extreme value variates this paper investigates the empirical consequences of nonlinear rums in the case of sportfishing modal choice while refining and contrasting the available methods for welfare estimation

testing for the survey mode effect on contingent valuation data quality a case study of web based versus in person interviews this paper addresses the lack of empirical evaluation of the use of web based surveys in the context of contingent valuation surveys we compare using a case study in person interviews with web based surveys regarding response rate information additivity effects and respondents attitudes towards paying the web based survey had a much lower response 5 1 than the in person interviewing 84 we find the web based contingent valuation surveys to be neither more susceptible to information additivity effects nor more prone to zero protest responses we conclude in favor of the use of web based surveys namely in portugal where the number of internet users is rapidly increasing although further research efforts are required on their use

giving stated preference respondents time to think results from four countries previous studies have found that contingent valuation cv respondents who are given overnight to reflect on a cv scenario have 30 40 lower average willingness to pay wtp than respondents who are interviewed in a single session this time to think ttt effect could explain much of the gap between real and hypothetical wtp observed in experimental studies yet giving time to think is still rare in binary or multinomial discrete choice studies we review the literature on increasing survey respondents opportunities to reflect on their answers and synthesize results from parallel ttt studies on private vaccine demand in four countries across all four countries we find robust and consistent evidence from both raw data and multivariate models for a ttt effect giving respondents overnight to think reduced the probability that a respondent said he or she would buy the hypothetical vaccines average wtp fell approximately 40 respondents with time to think were also more certain of their answers and a majority said they used the opportunity to consult with their spouse or family we conclude with a discussion of why researchers might be hesitant to adopt the ttt methodology

reliability of individual valuations of public and private goods choice consistency response time and preference refinement we examined the reliability of a large set of paired comparison value judgments involving public goods private goods and sums of money as respondents progressed through a random sequence of paired choices they were each given their response time decreased and they became more consistent apparently fine tuning their responses suggesting that respondents tend to begin a hypothetical value exercise with relatively imprecise preferences and that experience in expressing preference helps reduce that imprecision reliability was greater for private than for public good choices and greater for choices between a good and a monetary amount than for choices between two goods however the reliability for public good choices was only slightly lower than for the private goods published by elsevier b v

the choice theory approach to market research this paper surveys economic choice theory stressing developments that permit use of data from psychometric and conjoint experiments to produce market demand forecasts alternatives to the widely used multinomial logit model are summarized and a new method for estimating multinomial probits is described an integration of choice models with attitudinal scaling and perceptual mapping within a latent variable system is described estimation of such systems under either random effects or fixed effects descriptions of heterogeneity across individuals is discussed issues in the use of choice models to describe responses from conjoint experiments are presented new regression diagnostic tests for the consistency of multinomial logit representations are discussed

investigating m3 money demand in the euro area new evidence based on standard models monetary growth in the euro area has exceeded its target level especially since 2001 likewise recent empirical studies did not find evidence in favour of a stable long run relationship between the variables entering the money demand function instead the equation appears to be increasingly unstable if more recent data are included since the link between money balances and macroeconomic variables seems to has become rather fragile these results put serious doubts concerning the rationale of monetary aggregates in the monetary policy strategy of the ecb however if the analysis is done without imposing a short run homogeneity restriction between money and prices a stable long run money demand relationship can be identified where recursively estimated parameters are almost stable in addition the corresponding error correction model survives a wide array of specification tests including procedures for nonlinearities and parameter instability hence the apparent monetary overhang is in line with standard models of money demand behaviour and is not expected to lead to a rise in inflation

the effect of individual ability to choose scale heterogeneity on the valuation of environmental goods christie m gibbons j 2011 the effect of individual ability to choose scale heterogeneity on the valuation of environmental goods ecological economics 70 12 2250 2257

choice and temporal welfare impacts incorporating history into discrete choice models abstract static cross sectional discrete choice models are often employed to calculate welfare measures in environmental valuation these measures will be biased if the underlying preference function includes temporally related attributes and lagged dependent variables nevertheless static models continue to dominate the literature in this paper we provide an approach to estimating discrete choice models that includes consideration of prior behavior and past attribute perceptions and allows for testing consistency with random utility maximization in a time series context we apply this model to the case of recreational fishing site choice and participation comparing our time series approach to static versions we find that the time series model provides a richer behavioral characterization of site choice we also find significant differences between cross section and time series welfare measures the time series model raises several concerns about the specification of the policy impact and the subsequent welfare measurement that are not apparent in the static case

evolution of the trans atlantic exchange rate before and after the birth of the euro and policy implications the establishment of the euro could present a challenge to the hegemony of the us dollar as the predominant international currency the fact that the unipolar us dollar dominated international monetary system can be unstable in the presence of large shocks presents an opportunity for the euro to promote systemic stability the present study pursues this conjecture by exploring with cointegration and error correction method techniques the interdependence between the dynamics of the dollar euro exchange rate and economic fundamentals in the context of a monetary exchange rate model our results suggest that both short run price stickiness and long run secular growth fundamentals affect the exchange rate path these findings support a relatively broad based policy approach to promote the collective economic interest of the eu zone to the extent that such policies succeed in strengthening and stabilizing the euro zone economy they are likely to buttress and possibly accelerate the internationalization

valuing cultural heritage in developing countries comparing and pooling contingent valuation and choice modelling estimates a substantial part of the united nation s world heritage sites whss can be found in developing countries but many of them are in a bad state thus there is a need to document the social benefits of these global goods in order to justify the costs of restoration and preservation programmes rpps this study adds to the scarce literature on economic benefits of whss in developing countries and reduces the need to perform very uncertain benefit transfers from european or us valuation studies we apply contingent valuation cv and choice modelling cm to estimate the social benefits of rpps for the my son world cultural heritage site in vietnam both to foreign visitors and the local residents we then compare the estimates from the cv and cm methods and pool the results from the two methods the results show that both cv and cm are suited to estimating the economic benefits of preserving cultural heritage of my son the two methods produce very similar results which can be interpreted as a test of convergence validity the pooling results give evidence to show that the cv and cm models have the same underlying preference structures thus these valuation models can be successfully used in cost benefit analyses to assess the benefits to cultural heritage of measures to reduce air pollution soil erosion climate change and other causes to deterioration of cultural heritage sites

model uncertainty in characterizing recreation demand a bayesian variable selection procedure is used to control for uncertainty in the specification of a recreational demand model specifically we propose a model that draws on the bayesian paradigm to integrate the variable selection process into model estimation and to reflect the accompanying uncertainty about which is the best specification in subsequent counterfactual predictions the advantage of this procedure over previous non bayesian approaches is that it overcomes the problem of pre testing in specification searches in our application evaluating demand for recreational lake usage in iowa we find clear evidence that site attributes such as lakes size handicap facilities and wake restrictions do impact lake usage there is also evidence that water quality matters in household recreation choices indeed contrary to abidoye et al am j agricult econ 2012 in which only a single functional form is considered we find clear evidence that water quality matters with posterior probability of less that 10 associated with a model without any water quality variables this suggests that the flexibility that the bayesian variable selection model affords in capturing the linkage between recreation demand and site characteristics can be important

information customization and food choice in this article we employ a hypothetical discrete choice experiment dce to examine how much consumers are willing to pay to use technology to customize their food shopping we conjecture that customized information provision can aid in the composition of a healthier shop our results reveal that consumers are prepared to pay relatively more for individual specific information as opposed to generic nutritional information that is typically provided on food labels in arriving at these results we have examined various model specifications including those that make use of ex post de briefing questions on attribute non attendance and attribute ranking information and those that consider the time taken to complete the survey our main results are robust to the various model specifications we examine

embracing model uncertainty strategies for response pooling and model averaging econometricians modeling stated preference sp data and most other types of data are confronted with the uncomfortable reality that our knowledge of the true model is limited with only certain variables suggested by the application at hand and general classes of functional forms and error structures suggested by the literature accepting our limited knowledge we pursue strategies for analyzing sp data that are more robust to uncertainties in our knowledge of the true model these include non parametric and parametric likelihood based tests of pooling responses from different elicitation formats and a frequentist based model averaging approach for estimating willingness to pay functions we argue that these strategies lead to increased econometric integrity and empower the ultimate users of models such as policy decision makers and even juries to better assess the robustness of the results we apply these approaches to an sp survey of saltwater angling in alaska which utilized split sample rankings and ratings elicitation methods while an important goal of our paper is to develop practicable modeling strategies that will ultimately lead to more robust conclusions and more confidence by the users of sp results an equally important goal is to engender a critical discussion of how we can make the analysis of sp data more robust

addressing preference heterogeneity multiple scales and attribute attendance with a correlated finite mixing model of tap water choice unobserved heterogeneity of error scale in choice models is a recent extension of the better investigated issue of heterogeneity of taste intensity it is achieved by fitting choice panel data with specifications that simultaneously handle inter personal variation in scale and taste the aim is to separate differences in preference intensities across respondents from differences in the degree of consistency in choice behaviour or preference discrimination while accounting for correlation between the two another recent substantive issue in choice data analysis is attribute non attendance we develop a finite mixing model to address simultaneously the three issues above we empirically prove the concept on stated preference data related to tap water attributes in a study for industry regulation

choice set formation for outdoor destinations the role of motivations and preference discrimination in site selection for the management of public expenditures on protected areas effective public expenditure currently dominates the management focus of many protected areas this calls for explicit modeling of constraints and motivations that respectively obstruct and stimulate visits to selected outdoor destinations choice set formation is the result of screening and or inclusion of specific sites alternatives to form the set of sites considered in real choices evidence shows that the omission of a structural representation of choice set formation is harmful to econometric inference yet the literature has largely ignored the underlying behavioral phenomenon we show using a discrete choice experiment involving selection among seven recreational sites in an italian national park that choice set formation is behaviorally relevant even after controlling for preference discrimination motivations why visit are important determinants of preliminary site screening for choice set inclusion as well as site selection justifying the additional value of such modeling extension

consumers willingness to pay for renewable and nuclear energy a comparative analysis between the us and japan abstract this paper examines consumers willingness to pay for nuclear and renewable electricity as two alternatives to fossil fuels for the reduction of greenhouse gas emissions we conduct a choice experiment of consumer stated preferences on the basis of an online survey in four us states and japan after the fukushima nuclear plant accident first the results suggest that us consumers willingness to pay for a 1 decrease in greenhouse gas emissions is 0 31 per month which is similar to the results for the us a decade ago japanese consumers show a slightly lower willingness to pay of 0 26 per month second the average consumer in both countries expresses a negative preference for increases in nuclear power in the fuel mix to a greater extent in japan third renewable energy sources were endorsed by both us and japanese consumers who show a willingness to pay 0 71 and 0 31 per month for a 1 increase in the use of renewable source energy this study also examines the differences in respondents characteristics approximately 60 of the us respondents who did not change their perception concerning the use of nuclear energy subsequent to the fukushima nuclear crisis have almost no preference for variation in nuclear power which is in stark contrast to the japanese respondents opposition to nuclear energy

gender specific starting point bias in choice experiments evidence from an empirical study abstract in this paper we test whether preferences and willingness to pay estimates obtained in a choice experiment study are susceptible to starting point bias as is often the case in dichotomous choice contingent valuation studies on the basis of a multinomial probit model we find that preferences are indeed susceptible to starting point bias in a split sample design our results suggest that varying the price levels displayed in a so called instructional choice set presented prior to the actual preference eliciting choice sets significantly impacts respondents preferences and willingness to pay for protecting danish nature areas from new motorway development in particular our results show that the bias is gender specific only female respondents are significantly affected results further reveal that the impact of the starting point bias decays as respondents evaluate more and more choice sets this supports the discovered preference hypothesis and on the basis of this we suggest a number of ways to potentially mitigate the starting point bias

how closely do hypothetical surveys and laboratory experiments predict field behavior we compare the ability of three preference elicitation methods hypothetical choices nonhypothetical choices and nonhypothetical rankings and three discrete choice econometric models the multinomial logit mnl the independent availability logit ial and the random parameter logit rpl to predict actual retail shopping behavior in three different product categories ground beef wheat flour and dishwashing liquid overall we find a high level of external validity our specific results suggest that the nonhypothetical elicitation approaches especially the nonhypothetical ranking method outperformed the hypothetical choice experiment in predicting retail sales we also find that the rpl can have superior predictive performance but that the mnl predicts equally well in some circumstances experiment

exiting a lawless state an earlier paper showed that an economy could be trapped in an equilibrium state in which the absence of the rule of law led to asset stripping and the prevalence of asset stripping led to the absence of a demand for the rule of law highlighting a coordination failure this paper looks more carefully at the dynamics of transition from a non rule of law state the paper identifies a commitment problem as the critical feature inhibiting the transition the inability under a rule of law to forgive theft this can lead to the perpetuation of the non rule of law state even when it might seem that the alternative is pareto improving

choosing between internet and mail survey modes for choice experiment surveys considering non market goods in a choice experiment setup considering a non market good this paper adds to the literature on survey mode effects by providing evidence that internet surveys can be a viable alternative to traditional mail surveys when gathering feedback from a sample of respondents the case study concerns preferences for protecting different types of landscape from road encroachment when building new motorways in denmark two samples of respondents are surveyed one by internet and one by mail the performances of the two samples are compared over six different criteria response rates protest responses demographics preferences and wtp estimation precision and finally certainty in choice differences are observed for some of these criteria implying that analysts should be aware that choosing internet over mail could be accompanied by a survey mode effect however the observed differences do not translate into significant differences in the unconditional wtp estimates in most applied economic valuation studies of non market goods the main objective is in fact estimation of wtp hence in the present case the identified survey mode effects do not severely invalidate the applicability and continued use of the internet as a suitable means of collecting data for choice experiment economic valuation of non market goods

model selection for the mixed logit with bayesian estimation in this paper the mixed logit ml using bayesian methods was employed to examine willingness to pay wtp to consume bread produced with reduced levels of pesticides so as to ameliorate environmental quality from data generated by a choice experiment model comparison used the marginal likelihood which is preferable for bayesian model comparison and testing models containing constant and random parameters for a number of distributions were considered along with models in preference space and wtp space as well as those allowing for misreporting we found strong support for the ml estimated in wtp space little support for fixing the price coefficient a common practice advocated and adopted in the environmental economics literature and weak evidence for misreporting

structural reliability of conjoint measurement in health care an empirical investigation this paper is concerned with the structural reliability of conjoint measurement when applied in a health care setting the clinical context was the diagnosis and treatment of knee injuries a conjoint measurement study was conducted which used the pairwise choice approach to preference elicitation each choice included two scenarios a conventional treatment approach to management arthroscopy and an approach using magnetic resonance imaging in order to test for structural reliability two separate conjoint measurement exercises were conducted exercise a where scenarios were defined in terms of three attributes and exercise b where scenarios included all four attributes the assessment of structural reliability involved a comparison of two random effects probit models for exercises a and b data were collected on a total of 176 students of sports science the results strongly indicate that the models for the two exercises are different although the instability is limited to the constant term and a sin

what you don t know might hurt you some unresolved issues in the design and analysis of discrete choice experiments the papers and comments in this issue focus on four broad areas related to understanding and modeling choices 1 the use of laboratory experiments to improve valuation methods 2 the design of stated preference choice set and choice occasions 3 latent class models as means of identifying and accommodating preference heterogeneity and 4 accommodating uncertainty about the true model modeling ranking and rating tasks and pooling data sources in what follows i offer some comments on each area and briefly discuss several unresolved issues associated with each area closing with some comments about future research opportunities

valuing unfamiliar and complex environmental goods a comparison of valuation workshops and internet panel surveys with videos abstract we compare two discrete choice experiments eliciting willingness to pay wtp for increased cold water coral protection in norway using valuation workshops and an internet panel survey with videos the video presentation provides the same visual presentation of information about the good and valuation task as in the valuation workshop in doing so we are the first to compare these survey modes the two survey modes perform equally well with respect to sampling but the internet survey gives significantly lower wtp estimates we identify a large number of status quo sq choosers in the internet survey that partly explain this result furthermore respondents who speed through the survey questionnaire and believe the survey to be inconsequential are more likely to be sq choosers while an internet survey is a fast and cost effective way of obtaining a representative population sample the potential biases in the valuation of complex and unknown environmental goods outlined here should be carefully addressed in future internet panel surveys

constructing historical euro zone data existing methods of reconstructing historical euro zone data by aggregation of the individual countries aggregate data raises numerous difficulties especially due to past exchange rate changes the approach proposed here is designed to avoid such distortions and aggregate exactly when exchange rates are fixed we first compute growth rates within states aggregate these then cumulate this euro zone growth rate to obtain the aggregated levels variables the aggregate of the implicit deflator plice index coincides with the implicit deflator of our aggregate nominal and real data we apply the method to euro zone m3 gdp and prices over the previous two decades 1 background with the introduction on 31 december 1998 of the irrevocably fixed euro exchange rates eleven countries of the european union entered a new monetary union from that date onwards monetary policy for these countries is set by the newly formed european central bank ecb the governing council of the ecb bases its monetary policy on medium term assumptions regarding real gdp growth and the trend decline in the velocity of circulation of m3 ecb 1999a p 40 therefore the construction of historical data for aggregate m3 and gdp for the euro zone is of practical relevance to policy makers in addition any econometric model for euro zone countries requires such historical data this paper describes an approach to doing so from the aggregate data of the individual member states a number of previous reconstructions are noted but as these have important drawbacks an approach related to that in t6rnqvist 1936 is proposed and its properties are discussed although there have been many important contributions to index number theory see section 4 few are directly relevant to the problem confronted here where we wish to use the national aggregates from member states not the individual item data usually input into index calculations to construct a euro zone aggregate moreover the inherently non stationary nature of those national aggregates both from unit roots inducing integrated time series

estimating willingness to pay do health and environmental researchers have different methodological standards health and environmental economists have been employing stated preference sp methods such as conjoint analysis or contingent valuation to estimate the monetary value of public health interventions and environmental goods and services however the quality of data and the validity of results are sensitive to a number of decisions researchers make the aim of this study is to compare the degree of the current consensus among active researchers in the rapidly evolving area of sp methods in health and environmental valuation we surveyed researchers who have published manuscripts on sp methods in the last 10 years researchers were presented with hypothetical sp studies with different attributes they were first asked which study they would recommend to use to inform policy decisions and then asked which study has better quality our results show that good practice sp methods vary among study features and among researchers with different amounts and kinds of research experience although health researchers

combining discrete and continuous representations of preference heterogeneity a latent class approach unobserved preference heterogeneity has been widely recognized as a critical issue not only for modelling choice behaviour but also for policy analysis this paper examines alternative approaches for incorporating heterogeneity in recreational demand we apply a hybrid model combining discrete and continuous heterogeneity representations of tastes to capture the defining features of both the latent class and the random parameter logit specifications this model allows for the joint estimation of discrete segments and within segment heterogeneity providing a richer interpretation of preference heterogeneity a database of recreational trips to forest sites in mallorca has been used to compare the empirical performance of this hybrid approach with common specifications such as the conditional logit the random parameter logit and the latent class model

position bias in best worst scaling surveys a case study on trust in institutions this paper investigates the effect of physical position on best and worst choices in the bestworst scaling technique although the best worst scaling technique has been used widely in many fields the phenomenon of consumers adoption of processing strategies while making choices has been largely overlooked we examine this issue in the context of consumers perception of trust in institutions to provide information about a new food technology namely nanotechnology and its use in food processing our results show that around half of the consumers used position as a schematic cue when making choices we find the position bias is particularly strong when consumers chose their most trustworthy institution compared to their least trustworthy institution in light of our findings we recommend researchers in the field to be aware of the possibility of position bias when designing best worst scaling surveys we also encourage researchers who have already collected best worst data to investigate whether their data shows such heuristics

competing for transparency political competition and institutional reform in mexican states why do political actors undertake reforms that constrain their own discretion we argue that uncertainty generated by political competition is a major driver of such reforms and test this argument using subnational data on mexican states adoption of state level access to information ati laws examining data from 31 mexican states plus the federal district we find that more politically competitive states passed ati laws more rapidly even taking into account the party in power levels of corruption civil society and other factors the fine grained nature of our data reflecting the staggered timing of elections inauguration dates and dates of passage allows us to distinguish between different theoretical mechanisms we find the greatest evidence in favor of an insurance mechanism by which incumbent parties who face uncertainty over future political control seek to ensure access to government information and means of monitoring incumbents in the future in case they lose power

valuing wetland attributes an application of choice experiments abstract the interest for wetlands is increasing not only because of the possibility of a cost efficient uptake of nutrients but also because wetlands can be designed to provide other services what values that are supplied depend largely on the design there are numerous different design options and different actors may promote different alternatives whether we want to design a wetland for nutrient retention alone or one that also serves other interests policy makers need information about the value of different options conducting a choice experiment we are able to identify attributes that increase and decrease citizens perceived value of wetlands using a random parameter model we find that biodiversity and walking facilities are the two greatest contributors to welfare while a fenced waterline and introduction of crayfish decrease welfare

are preferences stable the case of health care abstract experiments concerned with modelling individual preferences are based on the assumption of stability of preferences violations of the stability assumption have implications for the increasing amount of experimental work in health care concerned with the welfare implications of alternative policies this paper reports the results of a discrete choice experiment dce carried out to examine the effect of experience on stability of preferences within health care whilst the results provide evidence of stability further research is required before these results are generalised

protest beliefs in contingent valuation explaining their motivation abstract the definition and treatment of protest responses in contingent valuation cv can have a significant influence on the estimated values of the good in question if these responses are censored in order to understand how protest responses are motivated in a cv about forest biodiversity in germany we used an item battery to identify respondents protest beliefs the items were measured for all respondents irrespective of their willingness to pay wtp in principle then a scale based on these beliefs is taken as a dependent variable of regression analyses in addition to environmental concern we used norms the warm glow of giving and dilemma concern as further explanatory variables the latter focuses on cooperation problems in protecting the environment our results show that protest beliefs are significantly influenced by the explanatory factors furthermore the protest beliefs themselves have a significant effect on the decision to be wtp as well as on the amount of money stated by those who are wtp the censoring of protest responses may therefore be indefensible

tough and easy choices testing the influence of utility difference on stated certainty in choice in choice experiments respondents in stated preference studies may be uncertain about their preferences for the good presented to them inspired by wang j environ econ manag 32 219 232 1997 we hypothesize that respondents stated certainty in choice increases with the utility difference between the alternative chosen and the best alternative to that we test this hypothesis using data from two independent choice experiments both focusing on nature values in modelling respondents self reported certainty in choice we find evidence that the stated level of certainty increases significantly as utility difference in choice sets increases in addition stated certainty increases with income furthermore there is some evidence that male respondents are inherently more certain in their choices than females and a learning effect may increase stated certainty we find evidence of this in the first study where the good is described in rather broad and generic terms but not in the second study where a more specific description of the good is used

quick and dirty numbers the reliability of a stated preference technique for the measurement of preferences for resource allocation we investigated the reliability of an internet based stated preference survey to elicit preferences for priority setting using a conjoint study like approach preferences were elicited among members of an internet survey panel in an experimental allocation of points task at two times the main finding is that the survey showed good reliability and most participants consistently adjusted their allocations of points to differences in presented scenarios at the repetition of the survey respondents were more likely to prioritize between new treatment programs competing for funding and those that did prioritize discriminated stronger between programs we found no evidence that respondents were making easy choices or arbitrarily clicked through the survey

using conjoint analysis to derive estimates of compensating variation abstract we use several approaches to derive estimates of hicksian compensating variation from conjoint ratings data the different estimation approaches produced mixed results with respect to consistency with utility theory statistical significance of key variables magnitude of welfare estimates and confidence bounds on welfare estimates these findings suggest conjoint analyses are not a panacea for the problems being debated regarding contingent valuation and travel cost methodologies and conjoint questions appear to share many of the advantages and disadvantages associated with dichotomous choice contingent valuation questions

modeling disinterest and dislike a bounded bayesian mixed logit model of the uk market for gm food mixed logit models represent a powerful discrete choice analytical model but require assumptions about the functional form of the parameter distributions the use of unbounded distributions such as the normal distribution may be regarded as unsuitable where theory indicates that all are negatively affected by increases in an attribute such as price bounded distributions such as the triangular and log normal are unable to model the case where a section of the population is indifferent towards an attribute while the remainder are negatively disposed toward it train and sonnier s bounded mixed logit model accommodates these features and is employed in this paper a censored normal and johnson s s b distribution are used to model preferences in the uk for food attributes including price and gm technology bi modal distributions are identified regarding gm food some are unlikely to ever consume it some are close to indifference and willing to consume at relatively small discounts while the remainder are fairly unresponsive to further price reductions

information and effort in contingent valuation surveys application to global climate change using national internet samples this contingent valuation study investigates the issues of information access and respondent effort and is based on a series of national internet samples the focus is on a split sample treatment basic information bi versus enhanced information ei in the latter significantly expanded information is provided about global climate change and the kyoto protocol using a referendum format we compare the treatment effect bi versus ei on willingness to pay wtp we develop measures of respondent effort in accessing optional information through the technology of web based surveys and jointly model effort and wtp using a simultaneous estimation approach results support the use of the joint modeling approach for objective measures of respondent effort and wtp respondent effort is shown to be positively and significantly related to wtp however use of the optional menu is rather modest counts of pages and time spent and is highly variable both across pages and respondents

the discreet charm of formal institutions postcommunist party competition and state oversight why do some new democratic political politicians constrain themselves and reduce their discretion to extract resources from the state and the processes of privatization postcommunist democracies show surprising variation in the adoption of formal institutions of monitoring and oversight these institutions regulate markets empower citizen oversight and police the use and distribution of state assets these have arisen rapidly in some countries and with considerable delays in others accounts that link institutional creation to european union imposition initial bargaining and parliamentary divisions do not fully explain the variation instead in the nine consolidated democracies and free markets examined here robust political competition triggered mechanisms of anticipatory institution building and moderation of government behavior

choke price bias in choice experiments this paper reports on the results from a split sample choice experiment where the effect of changing the maximum level of the cost attribute is investigated the hypothesis was that changing the maximum price level would either give rise to an income effect or have no effect on consumers preferences this was tested in the framework of a valuation study of different quality characteristics of minced pork the data was analysed using a mixed logit error component model which accounts for correlation in the unobserved part of the utility results suggest that the size of the maximum price level does matter and that changing the maximum price level has a statistically significant effect on both the general preferences structure and the wtp estimates hence researchers should be very careful when defining not only the range of the price attribute but also the maximum level of the price attribute

the state of the art of environmental valuation with discrete choice experiments abstract this paper provides with a review of the state of the art of environmental valuation with discrete choice experiments dces the growing body of literature on this field serves to emphasize the increasing role that dces are playing in environmental decision making in the last decade the paper attempts to cover the full process of undertaking a choice experiment including survey and experimental design econometric analysis of choice data and welfare analysis the research on this field is found to be intense although many challenges are put forward e g choice task complexity and cognitive effort experimental design preference and scale heterogeneity endogeneity or model uncertainty reviewing the state of the art of dces serves to draw attention to the main challenges that this methodological approach will need to overcome in the coming years and to identify the frontiers in discrete choice analysis

measuring birdwatchers preferences a case for using online networks and mixed mode surveys abstract this paper reports findings derived from a study of birdwatchers in the azores the subject was birdwatchers preferences for given management actions designed to improve the attractiveness of bird watching sites in the absence of official statistics on this market segment use was made of a mixed mode survey incorporating both on site and off site surveys and the use of on line social networks and communications tools the variable willingness to stay more time at the site was used as a welfare measure it has the advantage that it can be used to demonstrate the significant returns of eco tourism to local communities two findings emerge first tourists practicing wildlife viewing and nature based activities are less worried about infrastructures and care more about biodiversity and habitat quality and second the research technique appears to be successful when surveying seasonal recreation communities that are small and socially cohesive

a joint framework for analysis of agri environmental payment programs this article presents an approach for simultaneously estimating farmers decisions to accept incentive payments in return for adopting a bundle of environmentally benign best management practices using the results of a multinomial probit analysis of surveys of over 1 000 farmers facing five adoption decisions in a voluntary program we show how the farmers perceptions of the desirability of various bundles change with the offer amounts and with which practices are offered in the bundle we also demonstrate an estimator for the mean minimum willingness to accept for the adoption of a practice conditional on the cost share offers for other practices agri environmental payment programs play an important part in improving the environmental performance of agriculture claassen and horan batie lynch and smith smith feather and cooper claassen et al federallevel interest in developing these programs is currently strong for example the 2002 farm act calls for a five fold increase in funding for the usda s environmental quality incentives program eqip this article focuses on voluntary programs designed along the lines of the eqip which provides incentive payments to encourage producers to adopt environmentally benign land management practices such as nutrient management manure management and integrated pest management for policy making purposes it would be useful to know the sensitivity of the producer s decision to enroll in response to a schedule of potential incentive payments and to which practices are bundled together such information can be used to assess the costs of encouraging farmers to try various environmentally benign management practices commonly known as best management practices or bmps eqip offers the farmer a suite of bmps to choose from existing published research cooper and keim modeled the probability of farmer adoption of bmps as a function of the incentive payment with each practice be

random coefficient models for stated preference surveys abstract this paper combines the use of random coefficient discrete choice models that allow for correlated errors in the form of unobserved preference heterogeneity with an investigation of the reliability and usefulness of rankings data for the data we examine we find significant unobserved preference heterogeneity in the rankings which violates the underlying assumptions of the rank ordered logit model further directly modeling unobserved preference heterogeneity results in significant improvement in the precision of the parameter estimates and in estimated willingness to pay wtp the reliability and usefulness of rankings data should be re examined with econometric models not subject to the independence of irrelevant alternatives iia

controlling for the effects of information in a public goods discrete choice model this paper develops a reduced form method of controlling for differences in information sets of subjects in public good discrete choice models using stated preference data the main contribution of our method comes from accounting for the effect of information provided during a survey on the mean and the variance of individual specific scale parameters in this way we incorporate both scale heterogeneity as well as observed and unobserved preference heterogeneity to investigate differences across and within information treatments our approach will also be useful to researchers who want to combine stated preference data sets while controlling for scale differences we illustrate our approach using the data from a discrete choice experiment study of a biodiversity conservation program and find that the mean of individual specific scale parameters and its variance in the sample is sensitive to the information set provided to the respondents

test retest reliability of choice experiments in environmental valuation the paper presents the results of the first test retest study on choice experiments in environmental valuation in a survey concerning landscape externalities of onshore wind power in central germany respondents answered the same five choice sets at two different points in time each choice set comprised three alternatives described by five attributes and the time interval between the test and the retest was eleven months the analysis takes place at three different levels investigating choice consistency at the choice task level and repeatability of the latent construct utility at the level of parametric models as well as at the level of willingness to pay estimates at the choice task level we observed 59 identical choices the parametric analysis shows that the test and retest estimates are not equal even when we control for scale that is differences in the error variance however comparing the marginal willingness to pay estimates among test and retest reveals only a statistically significant difference for one of the attributes overall this indicates a moderate test retest reliability taking into account that consistency at the choice task level overlooks the stochastic nature of the process underlying discrete choice experiments

designing choice sets for stated preference methods the effects of complexity on choice consistency abstract we vary the complexity of choice sets used in stated preference methods to evaluate the impact on choice consistency we define five measures of complexity that capture either the amount of information or the correlational structure of information in a choice set using these measures as randomly assigned treatments in a large experiment we analyze the consistency of respondents choices using a heteroskedastic multinomial logit model we find that i all of our measures of choice set complexity affect choice consistency ii changes in the correlational structure of information have the largest impact on choice consistency and iii choice complexity significantly distorts welfare estimates our results confirm economists initial worry that moving from contingent valuation to conjoint methods will increase complexity induced choice inconsistency however our analysis also shows that these negative impacts may be mitigated if precautions are taken at the design and estimation stages of stated preference methods

protest responses in contingent valuation a significant number of respondents to contingent valuation surveys tend to either state a zero bid or refuse to state a bid at all for reasons associated with the process of valuation these protest responses are routinely removed from contingent valuation samples because it is assumed that they are not indicative of respondents true values the censoring of protest responses has led to the emergence of a definitional controversy one view is that the definition of protest responses and the rules for censoring them are dependent on whether the practitioner conceives of the contingent valuation survey as a market or as a referendum however what is not acknowledged is the possibility that protest responses and their meaning may vary according to the type of good being valued the elicitation format and the interaction between these elements and external factors this potential renders the development of unambiguous rules for censoring protest responses difficult moreover when willingness to pay is viewed as a behavioural intention it becomes important to determine what the responses actually mean this approach does not assume an interpretative position a priori against which the responses should be judged but seeks to inform an existing understanding which is inadequate

heterogeneous preferences regarding global climate change we examine the structure of preferences for mitigating impacts of global climate change that will not occur during the lifetimes of most who are alive today because no market data exist for such distant markets a statedpreference approach is used the analysis is based on the random parameters logit model and the results indicate substantial heterogeneity in respondent preferences that mean willingness to pay is a significant and increasing function of the scope of the impact and provocatively that respondents have the same preferences over the two very different time horizons that we consider e examine the structure of preferences for mitigating impacts of global climate change that will not occur during the lifetimes of most who are alive today studies using current market data have estimated the potential costs of climate change on agriculture mendelsohn nordhaus shaw 1994 and on other aspects of measured production nordhaus 1994 but market data can not reveal the willingness of those currently alive to pay for measures to mitigate impacts that may not happen for 100 years or more there is serious public discussion involving diplomats at the highest levels about measures to mitigate emissions that would cost the united states alone 100 to 200 billion dollars annually therefore estimating the willingness of those currently alive to pay for mitigation measures is not a fanciful exercise but rather a crucial effort to determine how much mitigation should be undertaken it is the preferences of those alive today regarding acceptable levels of climate impacts and not the unknowable preferences of those who do not yet exist that will ultimately determine how much mitigation we pursue in the next quarter century as this question cannot be answered with market data we use the stated preference sp approach and elicit preferences for preventing climate change induced impacts a host of climate change impacts have been enumerated this study focuses on one type of impact that may be important but has received little attention from economists scientists have predicted that widespread ecosystem shifts may accompany changes in climate vemap 1995 ecosys tem shifts are likely to evolve slowly indicating that lost use values are likely to be small for those alive today yet the public may still be willing and asked to pay for mitigation measures that are designed to slow the transformation of ecosystems the current debate over climate change demon strates two things the first is that some people do care about long term changes that will never affect them or perhaps even their children the second is that preferences regarding the impacts of climate change are very heterogeneous as other members of the public appear much less concerned long term horizons combined with heterogeneous prefer ences makes ecosystem shifts a useful place to begin analyzing preferences for mitigating climate change im pacts a stated preference survey was designed that asked respondents to choose their most preferred program to reduce ecological impacts from a set menu of five or six different programs the programs varied in terms of costs the degree of ecosystem change and in the mitigation method four different menus provided to each respondent yielded four distinct valuation responses section ii de scribes the random parameters logit model for repeated choices that allows for a flexible correlation structure based on heterogeneous preferences the ecosystem change and the stated preference survey are discussed in section iii in section iv we estimate the random parameters model and estimate the willingness to pay to prevent various levels of ecosystem change section v concludes with a discussion of how the scope of the impact preference heterogeneity and the time horizon affect willingness to pay

testing for the cointegrating rank of a var process with structural shifts tests for the cointegrating rank of a vector autoregressive process are considered that allow for possible exogenous shifts in the mean of the data generation process the break points are assumed to be known a priori it is proposed to estimate and remove the deterministic terms such as mean linear trend term and a shift in a first step then systems cointegration tests are applied to the adjusted series the resulting tests are shown to have known limiting null distributions that are free of nuisance parameters and do not depend on the break point the tests are applied for analyzing the number of cointegrating relations in two german money demand systems

runaway state building how political parties shape states in postcommunist eastern europe why has the rate of expansion of postcommunist state administrations varied so widely among countries that are at comparable stages of economic transition have similar formal institutions and have been equally exposed to the dynamics of eu integration based on a close comparison of poland the czech republic and slovakia the author argues that the critical factor in postcommunist state building is the robustness of party competition the legacy of communism creates strong pressures for patronage politics which swells the administration but it is party competition that determines whether the predisposition to patronage politics in fact becomes the practice of patronage politics the number of state administrative personnel has expanded significantly more in countries where party system development has stalled and party competition has failed to constrain the party ies of government

spatial preference heterogeneity in forest recreation abstract in this study we analyze the preferences for recreational use of forests in lorraine northeastern france applying stated preference data our approach allows us to estimate individual specific preferences for recreational use of different forest types these estimates are used in a second stage of the analysis where we test whether preferences depend on access to recreation sites we find that there is significant preference heterogeneity with respect to most forest attributes the spatial analysis shows that preferences for forests with parking and picnic facilities are correlated with having access to such forests while for the other attributes considered dominant tree species trekking paths and presence of lake and rivers we find no correlation between stated preferences and accessibility this implies that the problem of endogenous distances in the travel cost method parsons 1991 may be present in the estimation of welfare economic values for parking and picnic facilities in the analyzed model the results underline the importance of considering spatial heterogeneity of preferences carrying out economic valuation of spatial delineated environmental goods and that the spatial variation in willingness to pay for such goods is not only explained by the users transport costs of accessing the sites

m3 money demand and excess liquidity in the euro area recent empirical studies have found evidence of unstable long run money demand functions if recent data are used if the link between money balances and the macroeconomy is fragile the rationale of monetary aggregates in the ecb strategy has to be doubted in contrast we present a stable long run money demand relationship for m3 for the period 1983 2006 to obtain the result the short run homogeneity restriction between money and prices is relaxed and a break in the income elasticity of money demand after 2001 is taken into account measures of excess liquidity do not show significant inflation pressures

salt or sludge exploring preferences for potable water sources decision makers often use information about public preferences to guide public policy several disciplines gather information on preferences through surveys by asking respondents to make hypothetical choices over potential policies however the context of the choice question differs between approaches with some failing to make the full consequences of the respondent s choice explicit in the question in this study we investigate whether question context matters by exploring whether economic and psychology approaches yield a similar understanding of community preferences towards a large scale recycled wastewater scheme we find that stated preferences differ depending on whether the preference question is contextualised using economic incentives the findings provide insight into the implications of inappropriately contextualised preference questions methodological considerations in attitude identification and estimation and the diversity of values and public attitudes towards recycled wastewater

are fast responses more random testing the effect of response time on scale in an online choice experiment scepticism over stated preference surveys conducted online revolves around the concerns over professional respondents who might rush through the questionnaire without sufficiently considering the information provided to gain insight on the validity of this phenomenon and test the effect of response time on choice randomness this study makes use of a recently conducted choice experiment survey on ecological and amenity effects of an offshore windfarm in the uk the positive relationship between self rated and inferred attribute attendance and response time is taken as evidence for a link between response time and cognitive effort subsequently the generalised multinomial logit model is employed to test the effect of response time on scale which indicates the weight of the deterministic relative to the error component in the random utility model results show that longer response time increases scale i e decreases choice randomness this positive scale effect of response time is further found to be non linear and wear off at some point beyond which extreme response time decreases scale while response time does not systematically affect welfare estimates higher response time increases the precision of such estimates these effects persist when self reported choice certainty is controlled for implications of the results for online stated preference surveys and further research are discussed

an expected profit model for monetizing fishing location choices abstract we develop and analyze the properties of a new type of discrete choice model which jointly estimates the expected value of catch and location choice this model implicitly monetizes location choices and can be used to predict costs and effort redistribution of creating marine protected areas or of implementing other policy changes that either increase travel costs or alter expected revenue we illustrate our approach by considering the closing of the steller sea lion conservation area in the united states bering sea to pollock fishing

risk aversion and willingness to pay for energy efficient systems in rental apartments abstract this paper uses a random utility model to estimate consumers valuation of energy efficient insulation and ventilation systems in rental apartments given consumers limited experience in residential buildings and the perceived uncertainty about their comfort benefits and resulting energy savings these relatively new technologies might be undervalued by risk averse consumers using the concept of certainty equivalence this paper proposes a model to assess the consumers risk aversion for adopting energy efficient systems these systems are treated as risky assets while conventional commodities are assumed to be risk free the curvature of the utility function is interpreted as a measure of aversion to perceived risks as opposed to explicit risks measured by observed variances the proposed formulation is applicable in stated preference data with qualitative variables the model is applied to data from a choice experiment conducted among 264 apartment tenants in switzerland the estimated curvatures reject the risk neutrality hypothesis the range of the estimated risk premiums suggests that risk considerations remain a central issue in dealing with energy efficiency in residential buildings the analysis also indicates that assuming same risk attitudes toward new and conventional systems could bias the estimates of the willingness to pay especially when the system is comprised of several components

real convergence in europe how robust are econometric inferences the paper examines the convergence properties of productivity in fifteen european countries over the period 1960 1997 european productivity is estimated using modified translog production systems with a completely general intertemporal structure to capture the notion that trade may have an influence on aggregate convergence imports are included in the production function stationarity tests are used to test for convergence around a common long run trend including unit root tests the kpss and bayesian tests as well as testing based on fractional differencing parameter estimation for long memory models it is found that convergence inferences are sensitive to the type of test employed

repeated dichotomous choice formats for elicitation of willingness to pay simultaneous estimation and anchoring effect repeated dichotomous choice contingent valuation data are generated from responses to a succession of binary questions regarding alternative prices for an environmental good in this paper we propose a simultaneous equation model that allows for endogeneity and error correlation across the responses at each stage of the bidding process the model allows us to study the evolution of anchoring effects after the second dichotomous choice question estimation involves the bayesian techniques of gibbs sampling and data augmentation and the application focuses on the preservation value of a natural area the results for a data set involving up to four successive dichotomous choice questions show that restricted multiple bounded models are rejected by the data with the general model in addition willingness to pay tends to stabilize after the second stage in the elicitation process for the general unrestricted model when taking anchoring effects into consideration it is revealed that individuals responses in the latter stages are influenced by the sequence of bid prices offered in earlier questions nevertheless they do not have a significant effect on welfare estimates

africa s overgrown state reconsidered bureaucracy and economic growth how close is the link between outsized states and economic stagnation in africa this article shows that african public bureaucracies are not as large as often portrayed that they have been getting smaller and that reducing their size alone has not bee n a prescription for economic revival to the contrary the countries with higher levels of public employment such as botswana and mauritius are apt to have the better economic records these findings suggest that a superabundance of public personnel is not in itself a major impediment to growth in africa too much attention has been paid to quantitative or first generation bureaucratic problems and too little attention has been given the second generation issues of bureaucratic quality