economic valuation of the threat posed by the establishment of the asian tiger mosquito in australia invasive species policy could be better informed if we understood how much people value reductions in the risks posed by these organisms this study investigates the public s willingness to pay wtp for additional measures to reduce the risk of invasion of the australian mainland by the asian tiger mosquito atm the study contributes to the literature by applying a stated preference method to estimate the public s wtp to reduce the risk of an atm invasion expressed as a change in probability it is the first ex ante invasive species analysis to test over two discrete invasion reduction probabilities based on management effort further to overcome the challenges in valuing changes in probabilities the study presented respondents with a well defined discrete difference in the final probability with one scenario reducing risk from 50 to 25 and the other from 50 to 5 we find a significant difference in the mean wtp values between these two scenarios a 67 vs a 90 the overall conclusion is that estimated benefits of reducing the probability of an atm incursion outweigh the costs

do governors get what they want an alternative examination of the line item veto this paper reconsiders the impact of the governor s line item veto on the state budget process the governor s ability to obtain his or her most desired budget measures item veto effectiveness rather than a smaller expenditure budget the percentage difference between the final state budget and the governor s original budget request over fiscal years 1983 1989 is examined the empirical results indicate that under certain political situations the line item veto authority enhances the governor s ability to obtain his or her desired budget

option value empirical evidence from a case study of recreation and water quality a procedure for measuring option value and other preservation values of water quality is developed and applied to a case study area in the south platte river basin colorado benefits from water based recreation activities are the focus of the study the results provide an empirical test and confirmation of weisbrod s proposal that option value and other preservation values represent important social benefits and should be added to the aggregate consumer surplus of recreation activities to determine the total benefit of environmental amenities to society in the absence of such an estimate insufficient resources would be allocated by society to preservation of unique environments such as pristine mountain streams where mineral and energy development may irreversibly degrade water quality

statistical efficiency of double bounded dichotomous choice contingent valuation the statistical efficiency of conventional dichotomous choice contingent valuation surveys can be improved by asking each respondent a second dichotomous choice question which depends on the response to the first question if the first response is yes the second bid is some amount greater than the first bid while if the first response is no the second bid is some amount smaller this double bounded approach is shown to be asymptotically more efficient than the conventional singlebounded approach using data from a survey of californians regarding their willingness to pay for wetlands in the san joaquin valley we show that in a finite sample the gain in efficiency can be very substantial

joint estimation of multiple cvm scenarios under a double bounded questioning format contingent valuation surveys frequently ask the same respondent for willingness to pay wtp for either different programs or different levels of provision of a single program when multiple scenarios are considered by the respondent the errors in the estimates of wtp are likely to be correlated across scenarios failing to account for correlation may lead to erroneous inferences concerning differences in wtp this paper presents a technique that can be used to jointly estimate wtp for multiple scenarios proposed within a survey when the double bounded questioning format is used monte carlo simulations are employed to show that estimates derived from the joint model provide lower parameter variances as well as tighter confidence intervals surrounding wtp the model is used to estimate wtp values for data collected in telephone interviews of california residents concerning wtp for fire reduction programs in oregon and california variance properties of these estimates are shown to be similar to those estimated using simulated data

identifying the warm glow effect in contingent valuation abstract this paper reports the results from a contingent valuation study designed to investigate the influence of warm glow in willingness to pay wtp responses interindividual differences in warm glow motivation are measured through a factor analysis performed on a list of attitudinal items the reported wtp measures fail to pass the scope test both socioeconomic variables and motivational factor scores are significant in the explanation of the individual wtp measures we compute cold wtp measures by taking out the effect of the warm glow motivation these cold measures satisfy both the scope test and hausman s adding up property

electoral politics and the executive veto a predictive theory we argue that winner take all voting in states and the unequal distribution of electoral votes across states in presidential elections makes incumbent presidents rationally place more weight on the preferences of voters in closely contested larger states when making policy decisions this hypothesis is tested by examining whether presidential veto decisions are influenced by the floor votes of senators from these electorally crucial states in a pooled sample of 325 individual bills from 1970 through 1988 we find significant evidence of this behavior by incumbent presidents

valuing option existence and bequest demands for wilderness to assess the relative importance of current costs and future benefits of nuclear waste storage we develop a simple model of bequest value the basic model of nonparternalistic altruism is extended to account for the uncertain nature of the externality

antebellum tariff politics regional coalitions and shifting economic interests abstract throughout u s history import tariffs have been put on a sustained downward path in only two instances from the early 1830s until the civil war and from the mid 1930s to the present this paper analyzes the political economy of tariff reductions in the antebellum period tariff politics was highly sectional the north supported high tariffs the south favored low tariffs and the west was a swing region in the 1820s a coalition between the north and west raised tariffs by exchanging votes on import duties for spending on internal improvements president andrew jackson delinked these issues by vetoing several internal improvements bills the nullification crisis led to the compromise tariff of 1833 which phased out tariffs above 20 percent over a 9 year period by this time transportation improvements gave the west access to foreign markets giving the region a stake with the south in maintaining a low tariff equilibrium thus the west s changing position on trade policy helps explain the

line item veto where is thy sting roponents of giving the president the authority to use a line item veto argue that the institutional change is needed to limit special interest legislation and restrain spending opponents respond that it would grant too much added power to the president thereby upsetting the delicate balance wisely crafted by the founding fathers this article focuses on the presumption evidently shared by both sides in the debate that adoption of item veto authority will have significant consequences in terms of budget outcomes and the distribution of power 1 curiously there presently exists little empirical support for the presumption that item veto authority is important most studies comparing states with various types of veto authority have failed to detect significant effects associated with item veto additional tests of our own are consistent with these results after reviewing the empirical evidence we reconsider the alleged effects of item veto authority by seating the popular depiction in an explicit model of the budgetary process formal modeling exposes logical inconsistencies contained in popular veto discourse further the model makes clear that the predicted consequences of item veto commonly projected as ubiquitous in fact arise only in select settings

politics partisanship and the power to veto does gubernatorial line item veto power affect state budgets abstracthow does line item veto liv power affect a governor s ability to structure the state budget is liv power only relevant as a partisan tool is it still relevant when the state legislature can override the veto we use a rich disaggregated data set to test the effect of the gubernatorial liv on state budgets controlling for political factors such as party affiliation of the governor and legislature minority status of the governor and the legislature s ability to override a liv our results suggest that liv power has very weak influence if any on governors ability to influence state budgets

favoritism and reverse discrimination abstract we analyze the inefficiency that may arise in the form of reverse discrimination in the presence of favoritism or nepotism favoritism is typically associated with inefficient transfers to the core support of the incumbent government but inefficiency that is opposite in nature may also arise through the electoral process in a political environment where favoritism is pervasive we show that if the policy maker is sufficiently office seeking a socially efficient action may never be taken if it yields benefits to his core support due to reputational concerns hence the core support of the incumbent may fare worse than other groups we also consider the implications of policies such as anti nepotism laws or term limits in the presence of favoritism

rational addiction and the effect of price on consumption legalization of such substances as marijuana heroin and cocaine surely will reduce the prices of these harmful addictive drugs by the law of the downward sloping demand function their consumption will rise but by how much according to conventional wisdom the consumption of these illegal addictive substances is not responsive to price however conventional wisdom is contradicted by becker and murphy s 1988 theoretical model of rational addiction the becker murphy b m analysis implies that addictive substances are likely to be quite responsive to price in this paper we summarize b m s model of rational addiction and the empirical evidence in support of it we use the theory and evidence to draw highly tentative inferences concerning the effects of legalization of currently banned substances on consumption in the aggregate and for selected groups in the population addictive behavior is usually assumed to involve both reinforcement and tolerance reinforcement means that greater past consumption of addictive goods such as drugs or cigarettes increases the desire for present consumption but tolerance cautions that the utility from a given amount of consumption is lower when past consumption is greater these aspects of addictive behavior imply

valuing environmental commodities some recent experiments a general model of consumer behavior is proposed to assess six recent experiments that have attempted to reveal preferences for environmental goals each experiment used a mix of both the techniques and the theory of demand for non market commodities and each was designed to estimate a non market attitude associated with the environment and to analyze potential biases in the techniques the six cases show some consistency in results the linkage within the contingent market between the environmental attribute institutional setting and the bidding instrument must be realistic and accepted by the respondent to avoid biased results possibly the most important result is the replication of results using a traditional property value study and a contingent bidding approach all evidence obtained to date suggests that hedonic studies of property values or wages travel costs and survey techniques all yield values well one order of magnitude in accuracy 41 references 2 tables

executive veto and informational strategy a structure induced equilibrium analysis this paper explores the strategic value of incomplete preference revelation for an executive with veto authority within a budgetary process the analysis indicates which forms of veto power can be augmented by the strategic manipulation of information on preferences the lesson of the analysis is that the failure to consider the strategic value of incomplete preference revelation is a methodological shortcoming of standard structure induced equilibrium analysis since without such consideration equilibrium outcomes are subject to misspecification the true power bestowed upon individual political actors by alternative institutions is misunderstood and the informational gamesmanship that is so much a part of the political process is left unexplained

valuation of natural resource improvements in the adirondacks for 20 years acid rain in the adirondack park has been a central issue in the debate about clean air regulation based on a contingent valuation survey of new york residents our study quantifies the total economic value of expected ecological improvements in the park from forthcoming policies our preferred estimates of the mean household willingness to pay range from 48 to 107 annually which imply total statewide benefits ranging from 336 million to 749 million annually alternative assumptions about ecological changes yield benefits up to 1 1 billion the instrument passes external scope sensitivity to bid and sample selection tests

the effectiveness of anti smoking legislation a review abstract this survey focuses on government efforts to curb the use of undesirable goods notably tobacco products we synthesize the economics literature and examine the effectiveness of government curbs on tobacco consumption through non price controls such as bans on cigarette advertising health warnings and workplace smoking bans and price measures or higher prices through higher taxes this literature review is unique in that we do not merely aim to provide a summary of the literature rather our main focus is to draw conclusions from the literature regarding the effectiveness of alternate policy measures across countries in checking smoking and to provide directions suggestions for extending the scope of government intervention to other tobacco products

do contingent valuation estimates pass a scope test a meta analysis abstract this paper considers the scope test proposed to judge the internal consistency of contingent valuation estimates the test is shown to be quite sensitive to the maintained hypotheses required to derive fairly precise expectations for the properties of wtp functions and therefore a different approach may be needed in gauging the reliability of cv this paper describes an approach that relies on a weight of the evidence criterion and uses meta analysis to develop a systematic appraisal of what the economic values of changes in amenity resources are the approach is illustrated for the case of estimating people s willingness to pay for improving or maintaining visibility at the national parks

from rational actor to efficient complexity manager exorcising the ghost of homo economicus with a unified synthesis of cognition research it is now commonplace to note that economics canonical model of humans as rational self interested utility maximizers homo economicus is both descriptively misleading and often insufficiently predictive however certain outdated assumptions tied to homo economicus persist often influencing discourse and research design even in sustainability oriented fields we argue this ghost of homo economicus endures because the diversity of findings that confound the canonical model has surfaced across multiple behavioral and cognitive sciences each with its own terminology and focus area as such a unified accessible synthesis of this new information has yet to emerge in this paper we review recent insights from across the behavioral and cognitive sciences and propose an efficient complexity manager ecm model homo efficens as the best synthesizing option the crux of this model is that our species works within biological limits to efficiently filter massive environmental complexity this is achieved largely through analogical or case based reasoning we explain this synthesized model using a series of accessible metaphors finally we speculate on how this model may enrich future sustainable development research insofar as it points to fruitful units of analysis can stimulate methodological innovation and provide a more explicit theoretical foundation for the field

the new approach to wilderness preservation through benefit cost analysis over the last 15 years economists of resources for the future led by john krutilla have been developing a new approach to wilderness preservation this paper offers a concise exposition of their approach and adds a few new steps the basic ingredient of the new approach is a perception of declining net benefits of wilderness development and rising net benefits of wilderness preservation over time these alter the entire shape of the benefit cost analysis of potential development the new steps involve reversibility postponability and recognition of multiple interest rates

information shocks and cigarette addiction views from dynamic panels with common structural changes in this article we attempt to evaluate the impact of various information shocks on cigarette consumption in contrast to the existing studies we do not impose any break points a priori we use recently developed techniques for sample splitting in the data on us cigarette demand and find that using a time index as a transition variable can cluster cigarette demand into four distinct regimes in the past four decades a myopic to rational switch in cigarette consumption behaviour was observed in response to various anti smoking information events in particular we find strong evidence in support of the rational addiction model in the 1980s and 1990s moreover in line with the theoretical prediction our estimate of the long run elasticity is twice as large as the short run elasticity our empirical framework should improve policy makers understanding of the dynamics of cigarette consumption in response to various anti smoking campaigns and stress the role of sound policy making in improving smoking con

the validity of the contingent valuation method perfect and regular embedding this article deals with one aspect of the validity claim of the contingent valuation method namely to what extent does the method produce different values in situations for which economic theory claims different values two aspects of this validity test perfect and regular embedding were tested in a field experiment comprising six samples of the dutch population perfect embedding occurs when the value for a specific good is similar to the value for a more inclusive good perfect embedding did not manifest itself in the experiment respondents considered a package of six goods as well as a package of two goods more valuable than one of these goods it is argued that this supportive evidence of the method s validity claim occurred because the goods involved were well defined regular embedding occurs when the same good receives a lower value if the value for it is inferred from the value for a more inclusive good rather than if that good is valued on its own regular embedding was only found when respondents were given the opportunity to value the inclusive good before valuing the specific good respondents who were given information on the inclusive good without valuing it did not state different values than respondents who were not given that information it seems that respondents perceive an inclusive good as being relevant to their valuation decision only when they are asked to value it further research is necessary to shed more light on the underlying processes that may account for this

impatience incentives and obesity this paper explores the relationship between time preferences economic incentives and body mass index bmi using data from the 2006 national longitudinal survey of youth we rst show that greater impatience increases bmi and the likelihood of obesity even after controlling for demographic human capital occupational and nancial characteristics as well as risk preference next we provide evidence of an interaction

improving environmental valuation estimates through consistent use of revealed and stated preference information abstract environmental valuation data from stated and revealed preference methods are integrated into a unified model of preferences for environmental quality improvement that identifies the use and nonuse components of the total value estimate this articulates clearly what parts of the total value estimate come from each type of data and permits tests of whether estimated preferences satisfy weak complementarity between the environmental good of interest and related private goods the statistical advantages of using more information for the valuation problem are exploited while retaining flexibility to identify value estimates from any individual method of analysis

structure induced equilibria and perfect foresight expectations this paper extends the work on structure induced equilibria by explicitly considering voters expectations the standard assumption of myopic expectations is contrasted with the alternative assumption of perfect foresight expectations in the institutional setting examined perfect foresight means voters know how the outcome on the first issue in a sequence of two issues conditions majority rule outcomes on the second issue if voters act on this knowledge when voting on the first issue then several important results follow first voters may possess multipeaked preferences defined over the first issue with a majority cycle resulting so that there is no equilibrium to the whole sequence of elections second even if cycling does not result the exact location of the equilibrium involves a broader conspiracy than previously thought a conspiracy of not only preferences and institutional structure but also voters expectations as conditioned by that structure

bureaucratic discretion or congressional control regulatory policymaking by the federal trade commission this paper extends stigler and peltzman s approach to regulation by incorporating a legislature the model yields comparative statics results and hence testable implications the paper then tests between two opposing approaches about regulatory agency behavior the first assumes agencies operate independently of the legislature and hence exercise discretion the second assumes that congress controls agency decisions the recent behavior of the federal trade commission provides the empirical setting substantial evidence is found for the specific predictions of the model including the hypothesis of systematic congressional influence over ftc decisions

diagnosing insensitivity to scope in contingent valuation sensitivity to scope is considered a desirable property of contingent valuation studies and often treated as a necessary condition for validity we first provide an overview of scope insensitivity explanations put forth in the environmental valuation literature then we analyze data from a contingent valuation survey eliciting willingness to pay to prevent oil spills of four different magnitudes in arctic norway in the baseline analysis the scope inference is ambiguous there is only statistical difference in willingness to pay to avoid a very large versus small oil spill nok 1869 and nok 1086 respectively however further explorations show that several confounding factors suggested in the literature influence the scope inference the scope sensitivity improves when we control for subjective probabilities of amenity provision exclude respondents based on the debriefing questions take into consideration the sample sizes and impose diminishing marginal utility overall the analysis supports an emerging view in the contingent valuation literature suggesting that statistical scope insensitivity is not a sufficient reason for deeming a study invalid

the economic benefits of surface water quality improvements in developing countries a case study of davao philippines two nonmarket valuation techniques the contingent valuation method and travel cost model are used to estimate the economic value that people in davao philippines place on improving the water quality of the rivers and sea near their community the contingent valuation and travel cost estimates are very close to each other and are quite low both in absolute terms and as a percentage of household income these findings suggest that water pollution control is simply not a high priority for davao s residents and support the argument that households willingness to pay for environmental amenities such as improved water quality is low

the scope trials variation in sensitivity to scope and wtp with directionally bounded utility functions abstract sensitivity to scope refers to the property that willingness to pay for an environmental amenity is an increasing function of the scope of the amenity measurements of the degree of sensitivity to scope are commonly proposed as a test for the reliability of contingent valuation studies we evaluate the traditional scope test using neoclassical utility functions that are directionally bounded we provide a formal definition of sensitivity to scope and show that directionally bounded utility functions can produce arbitrarily small degrees of sensitivity to scope we conclude that a failure to satisfy existing scope tests should not be used as a prima facie basis for rejecting contingent valuation studies this does not imply that small degrees of sensitivity to scope should always be viewed as acceptable rather the results of scope tests should be considered more carefully with attention given to the substitutability of market and non market goods

agenda control by budget maximizers in a multi bureau setting while the present extension of the single issue model of agenda control has permitted the examination of a wide array of questions within a consistent overall framework and has generated new insights some qualifications are in order first the analysis like niskanen s and romer and rosenthal s is strictly limited to one form of agenda control take it or leave it offers made relative to some reversion level second each of the bureaus in this extension are single activity bureaus as a result certain types of agenda control that might exist when there are several dimensions to each bureau s activity such as the mix chosen for various sub activities or the spatial distribution of the bureau s output are ignored see denzau and mackay 1980 and mackay and weaver 1979a b for analyses of these types of agenda control for the case of a single bureau third as a point of reference and for expositional simplicity the analysis for the most part was executed with a single decisive voter on all issues as a result certain complexities and perhaps additional ambiguities were avoided finally in an effort to isolate and study the effects of the supply side phenomenon of agenda control a simple traditional model of the demand side of the collective choice process was employed for the simplest demand side passive supply side models this has typically proved quite adequate as models of the collective choice process have become more complex however taking on more strategic features the weaknesses of certain of the standard assumptions implicit in this demand side model become more apparent in particular the assumption that voters vote sincerely and non strategically is likely to be strained by most specifications of the dynamics of the voting process since learning on the part of voters would condition expectations and perhaps alter choice the inclusion of expectations formation into the model of voter behavior would certainly seem at least at the intuitive level to introduce an interesting additional set of constraints on agenda setters that may limit to some extent the expansionary tendencies described in this paper in short each of these qualifications should provide fertile ground for future research

the revenue and welfare effects of cigarette taxes 1988 the revenue and welfare effects of cigarette taxes applied economics vol 20 no 9 pp 1223 1232

ex ante willingness to pay with supply and demand uncertainty implications for valuing a sea turtle protection programme it is argued that ex antewillingness to pay is appropriately measured as a function of subjective supply and demand probabilities an exploratory case study of a loggerhead sea turtle protection programme is used to show how estimates of these probabilities can be obtained from a sample survey and how a change in probabilities determines contingent choice empirical results confirm that subjective probabilities are important when explaining ex antewillingness to pay attempts to estimate the determinants of ex antewillingness to pay without controlling for subjective probabilities will result in specification bias it is important that subjective probability information is gleaned from contingent valuation survey respondents and included in empirical models of contingent choice

plausible responsiveness to scope in contingent valuation plausible responsiveness to scope is a question of economic significance in addition to statistical significance of the scope test in contingent valuation we briefly review the history of the scope test in order to place the current issue in the context of the bp deepwater horizon oil spill as a result of the review we gain insights into how the issue of scope adequacy arose twenty years after it was first mentioned by the noaa panel on contingent valuation following the exxon valdez oil spill we then provide a review of desvousges mathews and train 2012 who promote the adding up test to identify inadequate responsiveness to scope adequacy the adding up test is a test of the construct validity of the contingent valuation method but is flawed as a measure of economic significance we propose scope elasticity of willingness to pay as a measure of economic significance a simulation suggests a likely range of elasticity estimates given linear and quadratic functional forms for the willingness to pay function in order to illustrate the ease of implementation of scope elasticity within the context of the standard scope test we calculate scope elasticity with willingness to pay estimates from several studies describe two studies that directly estimate scope elasticity and estimate scope elasticity with primary data from two studies all of these empirical estimates of scope elasticity fall within the range of scope elasticity suggested by the simulation scope elasticity provides a practical way forward relative to the adding up test on the issue of economic significance of scope effects

presidential pork executive veto power and distributive politics mitigated to the extent that the president prefers spending in some districts over others the model also generates new insights and predictions about fiscal policy under the separation of powers including the effects of divided government electoral rules and term limitations for the executive

part whole bias in contingent valuation will scope effects be detected with inexpensive survey methods the purpose of this paper is to test for scope effects with the contingent valuation method we use data from a telephone survey focusing on water quality improvements in the albemarle and pamlico sounds in north carolina we find that the willingness to pay estimates are sensitive to the scope of the policy these results suggest that the use of inexpensive survey methods may not be the cause of the failure to detect scope effects in some recent contingent valuation studies

revenue and land use effects of proposed changes in sin taxes a general equilibrium perspective in recent years large budget deficits have been of great concern to the u s government as well as to the general population leading to pressures for alternative sources of revenue one possibility is raising income taxes however this revenue source is extremely unpopular and fraught with liabilities for any government official or agency who might support it a more popular proposal is to increase the federal excise taxes on alcohol and tobacco it has been suggested in congress that the revenue raised through these additional taxes be earmarked for funding a 1 3 billion dollar shortfall in drug rehabilitation programs the most common proposals to achieve this funding are to alter section 5701 b of the tax code by increasing the sales tax on cigarettes from 0 16 to 0 32 per pack and to alter sections 5041 and 5051 of the tax code by increasing the taxes on beer and wine to the level on distilled spirits which is based on alcohol content increases in alcohol and cigarette taxes have been justified both politically and economically from a political perspective the so called sin taxes are supported as morally defensible since the taxes fall upon individuals who use harmful and addictive

some empirical evidence on embedding effects in contingent valuation of forest protection abstract we test for an embedding effect on a geographically distributed public good and the extent to which improvements in the cvm design reduce the occurrence and magnitude of embedding effects in valuation using both open ended and dichotomous choice cvm for protection of forests in all of southeastern australia and two smaller portions of that area we find the occurrence of embedding effects in only one of the two levels when embedding effects were present there was a reduction in value much smaller than that found by kahneman and knetsch

institutionalizing majority rule a social choice theory with policy implications recent results in the theory of pure majority rule demonstrate the genericity of majority rule cycles as established by richard mckelvey 1979 l cohen 1979 and n schofield 1978 majority rule nearly always breaks down and when it does the breakdown is complete the theorems given below may be summed up in the following three assertions 1 for any policy or alternative there exists a set of alternatives that command a majority of votes against it 2 this situation is not an abberation but rather is the general case and 3 it is almost always possible in multidimensional choice settings to find a sequence of votes that begins at any point and ends at any other point majority rule may wander anywhere yet when these theoretical assertions are applied to legislatures based upon majority rule they contain no obvious policy content or predictions the key insight which we elaborate in this paper is that majority rule is not self implementing there is no majority rule machine into which we feed preferences and out of which come outcomes rather there is a complex series of institutional arrangements underpinning the operation of majority rule legislatures arrangements from which theorists have mistakenly abstracted in fact majority rule theorists have not focused at all on institutional details instead they have restricted themselves to the majority rule dominance relation operating under the implicit assumption that what may be proved true about this relation is true of all legislative institutions based upon it in this paper we show that this assumption is misleading and that the the results based upon it must be reinterpreted in order to be useful for understanding real world committees and legislatures

executive veto and spending limitation positive political economy with implications for institutional choice the consequences of institutional change in the budgetary process are not generally determinate independent of the preferences of political actors nonetheless this study shows for a general class of preference configurations that the legislative branch cannot be made better off by a spending limitation unless the executive is empowered with a line item veto in the absence of executive item veto authority there is no incentive for the legislature to constrain spending

decision structuring to alleviate embedding in environmental valuation abstract embedding is the widely observed phenomenon that a good is assigned a higher value if evaluated on its own rather than as part of a more inclusive set embedding is considered a serious problem affecting the quality of many environmental management and health risk policy judgments this paper presents the results of an experiment involving of a structured small group approach for conducting environmental policy evaluations it focuses on eliciting problem specific values and discussion among participants about the pros and cons of multiple project alternatives in the context of tradeoffs between fisheries production and electricity generation from dams study results show a significant reduction in embedding which is viewed as an improvement in the quality of the preference judgments compared with a standard contingent valuation cv approach

valuing public goods a comparison of survey and hedonic approaches although the theory of public goods has progressed rapidly since paul samuelson s seminal article the empirical measurement of the value of demand for public goods only recently has received increased attention perhaps the best known and most widely accepted empirical approach has been the use of hedonic prices wherein for example it is assumed that either wages or housing values reflect spatial variation in public good characteristics of different communities this indirect approach based on theoretical work of charles tiebout kelvin lancaster sherwin rosen and others has proven quite successful among public goods or bads which have been valued using the hedonic approach are climate i hoch air pollution robert anderson and thomas crocker d harrison and d rubinfeld social infrastructure r cummings et al and other community characteristics such as noise level j nelson and ethnic composition ann schnare an alternative approach is to directly ask households or individuals to state their willingness to pay for public goods using survey techniques despite arguments that strategic bias will invalidate survey results there exists the need for an alternative to the hedonic approach as an example consider the case of a remote and unique scenic vista valuable to recreators which is threatened by air pollution from a proposed coal fired plant a typical situation in the western united states although it is possible in principle to impute the value of clean air and visibility from the relative decline in local visitation which might follow construction of a power plant information on the value of visibility at the site is needed prior to construction for socially optimal decision making on plant location and pollution control equipment the hedonic approach is unavailable both because the scarcity of local population as opposed to recreators makes use of wage or property value data impossible and because scenic vistas may themselves be unique for these reasons a randall et al first applied survey methods for valuing visibility and other environmental effects of large coal fired power plants in the four corners region of new mexico since this initial application the survey approach has been widely used to value environmental commodities where market data for hedonic analysis is difficult to acquire see for example brookshire ives and schulze rowe et al brookshire et al other early attempts to value public goods using the survey approach include r davis peter bohm and j hammack and g brown although results of using the survey approach for estimating the value of public goods appear to be internally consistent replicable and consistent with demand theory see schulze et al little work on external validation has been reported thus the purpose of this paper is to report on an experiment designed to validate the survey approach by direct comparison to a hedonic property value study the los angeles metropolitan area was chosen for the experiment because of the well defined air pollution problem and be assistant professor university of wyoming assistant professor university of missouri rolla associate professor university of wyoming and professor university of wyoming respectively the research reported here was funded under a grant methods development for assessing air pollution control benefits from the u s environmental protection agency we would like to give special thanks to alan carlin and shelby gerking for their helpful suggestions and contributions additional helpful comments were received from a myrick freeman iii john tschirhart and james murdoch all conclusions are of course our sole responsibility

an investigation of part whole biases in contingent valuation studies abstract part whole bias is a possible explanation for nonuse contingent valuation estimates that are insensitive to marginal changes in environmental commodities our empirical analyses reveal no statistically significant differences in willingness to pay of independent samples of nonusers to prevent 2000 20 000 or 200 000 migratory waterfowl deaths in the central flyway all numbers less than 2 of the waterfowl population five alternative propositions for explaining this empirical findings do not provide a completely satisfactory explanation more research is necessary to investigate appropriate commodity metrics sample sizes for small changes in environmental commodities and consider how respondents evaluate small changes in environmental commodities

cigarette consumption in spain empirical evidence and implications for public health policy the partial adjustment habit persistence model is used to analyse the behaviour of the demand for cigarettes in spain over the period from 1964 to 1988 on that basis the short and long run elasticities of demand with respect to price income and advertising intensity are estimated the model also provides and estimation of the effects that the anti smoking policies implemented during the period might have had on consumption the results are used to anticipate the probable impact on sales of a total ban on advertising and to design a suitable method to finance a health education campaign about the risks of smoking

the case for diminishing marginal existence values abstract this study addresses the debate over sensitivity of existence values measured by contingent valuation to scope tests we reconcile much of the debate within one theoretical model if marginal wtp for existence goods is diminishing then a study that tested for sensitivity to scope over a range for which marginal wtp is high would be more likely to detect sensitivity to scope than a study that focused on a range for which marginal wtp is much lower an empirical model demonstrates this point for existence value of remote wilderness parks these results have significant implications for future contingent valuation work

on visible choice sets and scope sensitivity abstract in this paper we argue that the burgeoning empirical debate over scope sensitivity within contingent valuation studies is fundamentally incomplete in that it has neglected a systematic examination of certain effects of study design upon observed scope sensitivity in particular we highlight the fact that in certain study designs the choice set initially offered or visible to respondents is changed in a stepwise manner as they progress through a valuation exercise while other designs involve advance disclosure regarding the full extent of the final visible choice set prior to any choices or values being elicited the issue of changes in the visible choice set is alluded to by smith j environ econom manage 22 1 71 who identifies this as a primary challenge to kahneman and knetsch s j environ econom manage 22 1 57 well known experimental results kahneman and knetsch contend that it seems highly implausible that this minor procedural change would significantly alter results p 61 but do not test this assertion we present experimental and field tests of the impact upon contingent values of varying the visible choice set through stepwise and advance disclosure these dimensions of design are interacted with changes in the order in which nested goods are presented bottom up versus top down when a stepwise disclosure procedure is adopted the observed scope sensitivity is substantially and significantly affected by the order in which goods are presented but such procedural variance is not observed within advance disclosure designs conjectures regarding the origin and implications of such findings are presented

adequate responsiveness to scope in contingent valuation the standard test for scope sensitivity in contingent valuation studies determines whether the response to changes in scope is statistically significant it does not address whether the magnitude of response is appropriate given the specified changes in scope we examine contingent valuation studies that implemented scope tests to determine what they imply about the adequacy of response to scope we find that in the vast majority of studies the magnitude of response cannot be assessed only three studies permit such an assessment samples and hollyer 1990 diamond et al 1993 and chapman et al 2009 the first two papers find that responses to their surveys did not vary adequately with scope the third study passed the standard scope test but we show that the magnitude of response in this study is inadequate by straightforward methods of assessment and cannot be explained by diminishing marginal utility or substitution more research is needed on this issue including wider application of adding up tests on incremental parts as well as the development of other methods that permit an assessment of the magnitude of response or other tests of rationality

an adding up test on contingent valuations of river and lake quality for a contingent valuation cv study of a bundle of water quality improvements this paper tests whether the sum of the estimated willingness to pay wtp for each individual part of the package evaluated incrementally equals the estimated wtp for the entire bundle as implied by standard utility theory this is the first application of the adding up test using incremental parts and carson and groves s 2007 procedures to induce truthful respondents answers the test is failed which implies that either the cv method did not elicit truthful answers or that respondents true preferences are inconsistent with standard utility theory

how people respond to contingent valuation questions a verbal protocol analysis of willingness to pay for an environmental regulation abstract this paper investigates what a respondent is thinking when answering a willingness to pay question in a contingent valuation using a think aloud technique from psychology called verbal protocol analysis the willingness to pay responses we observed seem to be constructed from a variety of considerations including an obligation to pay a fair share of the cost of the solution and signaling concern for a larger set of environmental issues the finding that respondents seem to construct their values at the time they are asked rather than reporting a more well defined value is seen as consistent with over two decades of research on the psychology of decision making potential uses of verbal protocols in contingent valuation studies are also discussed

consumer s surplus without apology the purpose of this paper is to settle the controversy surrounding consumer s surplus and by so doing to validate its use as a tool of welfare economics i will show that observed consumer s surplus can be rigorously utilized to estimate the unobservable compensating and equivalent variations the correct theoretical measures of the welfare impact of changes in prices and income on an individual i derive precise upper and lower bounds on the percentage errors of approximating the compensating and equivalent variations with consumer s surplus these bounds can be explicitly calculated from observable demand data and it is clear that in most applications the error of approximation will be very small in fact the error will often be overshadowed by the errors involved in estimating the demand curve the results in no way depend upon arguments about the constancy of the marginal utility of income consequently this paper supplies specific empirical criteria which can replace the apologetic caveats frequently employed by those who presently apply consumer s surplus moreover the results imply that consumer s surplus is usually a very good approximation to the appropriate welfare measures to preview below i establish the validity of these rules of thumb for a

executive veto legislative override and structure induced equilibrium in this study the structure induced equilibrium approach for modeling democratic institutions is extended to allow for the added structural features of executive veto and legislative override a multidimensional model is presented for a budgetary process involving three actors a legislature an appropriations committee and an executive in order to focus attention on the role of the veto and override possibilities simplifying assumptions are made with regard to other aspects of the agenda formation process in particular the committee has monopoly agenda power a closed amendment control rule is operative and perfect foresight expectations are held by the committee and the executive given these assumptions utility maximization by the several actors generates a budget outcome characterized as a structure induced equilibrium the general model is illustrated geometrically with a two dimensional example permitting budget outcomes to be analyzed for various combinations of veto rules and override provisions the analysis demonstrates that budget outcomes are sensitive to alternative specifications of veto rules and override provisions in the illustration executive veto power is shown to vary directly with both the permissiveness of the veto rule and the stringency of the override provision similar relationships however are not found to exist for total budget expenditures

the structure of motivation for contingent values a case study of lake water quality improvement abstract critics of the contingent valuation cv method have argued that individuals apply noneconomic motives in responding to cv questions implying that elicited values are not valid measures of the economic benefit of environmental improvement this study examines the role of such motives by using measures of attitude and motive strength to interpret willingness to pay wtp values for a set of nested environmental goods with potential use and nonuse benefits motivational structure is found to be more complex than suggested by the simple distinction between valid economic theoretic and noneconomic motives social motivations possibly associated with the benefit of contributing to a public good rather than the benefits of the good itself are potentially relevant to the wtp decision but do not give rise to separable values the strength of perceived personal responsibility for provision of the good is significantly associated with wtp but also with the theoretically desirable property of enhanced scope sensitivity wtp is not found to be associated with the extent to which the individual feels under some general moral obligation to contribute to good causes motives arising from ethical concerns for the environment and altruism are also potentially relevant to wtp but are closely related to underlying motives associated with existence and personal use values respectively it is suggested that the cv debate should be informed by further empirical investigation of the extent to which motives for wtp can be treated as separable

analysing the social benefits of soil conservation measures using stated preference methods the paper estimates the benefits of programmes to mitigate the off site impacts of soil erosion for a watershed in andalusia spain two stated preference methods are used namely choice experiments and contingent valuation to obtain estimates of the social benefit from soil erosion reductions under two different methodologies we emphasise the relative merits of the choice experiment method to provide useful inputs to policy design however employing both methods allows us to undertake a convergent validity test and thus to provide more defensible social benefit estimates the attributes used in the choice experiment include water quality impacts which we find to have the highest marginal values impacts on wildlife and the area subject to a control programme the contingent valuation design includes an attempt to reduce bias by reminding respondents about substitutes results are used to suggest upper limits on per hectare payments for soil conservation programmes

willingness to pay for quality improvements should revealed and stated preference data be combined abstract in this article we propose theoretically consistent welfare measurement of use and nonuse values for an improvement in environmental quality with revealed and stated preference data an analytical model based on the comparative static analysis of the variation function that describes the relationship between recreation demand and dichotomous choice contingent valuation models is estimated our results show that revealed and stated data should not be combined under the same assumed preference structure unless the two decisions imply the same change in behavior induced by the quality change in addition our results indicate scope effects in willingness to pay measures estimated with stated preference data

contingent valuation and social choice the contingent valuation method for estimating the existence value of natural resources is examined for psychophysical robustness statistical reliability and economic sensibility extensions of standard models for willingness to pay and suitable econometric techniques for analyzing these models are developed the analysis is applied to a series of experiments on the value of preserving wilderness areas in the western united states the results call into question the reliability of the cv method for estimating existence values

scope effects in contingent valuation does the assumed statistical distribution of wtp matter abstract economic theory assumes that willingness to pay wtp increases with the quantity of the consumed good this implies that there should be a scope effect in contingent valuation studies however in previous issues of ecological economics several authors criticized the contingent valuation cv method for the absence of such effect or its inadequacy in this paper we contribute to this ongoing debate by proposing to systematically apply several wtp statistical distribution assumptions to test for scope effects and check its plausibility following whitehead s 2016 recent recommendations we perform this approach using data from a swiss case study assessing the wtp for an increased surface of forest reserves we find that both mean wtp and scope effects are sensitive to the statistical distribution assumption regarding plausibility scope elasticities provide mixed result and also depend on the assumed statistical distribution of wtp for small sample size cv studies a non parametric analysis a spike model or an open ended format can thus be better suited to reveal scope effects than the classical parametric dichotomous choice analysis we thus recommend to systematically apply several statistical distribution assumptions of wtp to test for scope effects and their plausibility

finding sensitivity to scope in nonmarket valuation summary data limitations frequently prevent using actual consumer behavior in determining natural resource values so stated preference methods are used whether value estimates show sensitivity to the scope of resource valued is a key test for their validity which several studies fail developing a correlated panel mixed logit model of households water quality valuations in california we show that false negatives in scope tests can result when individual preference variation and correlation are ignored and split sample comparisons are used monte carlo simulations further demonstrate potentially prevalent false rejections of scope sensitivity even when within subject comparisons of willingness to pay portray strong scope sensitivity copyright 2013 john wiley sons ltd

valuation of small and multiple health risks a critical analysis of sp data applied to food and water safety this study elicits individual risk preferences in the context of an infectious disease using choice experiments a main objective is to examine scope sensitivity using a novel approach our results suggest that the value of a mortality risk reduction vsl is highly sensitive to the survey design our results cast doubt on the standard scope sensitivity tests in choice experiments but also on the validity and reliability of vsl estimates based on stated preference studies in general this is important due to the large empirical literature on non market evaluation and the elicited values central role in policy making

hydropower externalities a meta analysis this paper presents a meta analysis of existing research related to the economic valuation of the external effects of hydropower a database consisting of 81 observations derived from 29 studies valuing the non market impacts of hydropower electricity generation is constructed with the main aim to quantify and explain the economic values for positive and negative hydropower externalities different meta regression model specifications are used to test the robustness of significant determinants of non market values including different types of hydropower impacts the explanatory and predictive power of the estimated models is relatively high whilst controlling for sample and study characteristics we find significant evidence for public aversion towards deteriorations of landscape vegetation and wildlife caused by hydropower projects there is however only weak evidence of willingness to pay for mitigating these effects the main positive externality of hydropower generation the avoidance of greenhouse gas emission positively influences welfare estimates when combined with the share of hydropower in national energy production sensitivity to scope is detected but not linked to specific externalities or non market valuation methods

sensitivity of contingent valuation to alternative payment schedules insensitivity to payment schedule wherein respondents do not adequately differentiate between a one time payment and a series of payments may be an important but often overlooked factor in the design interpretation and use of contingent valuation studies several contingent valuation experiments involving a familiar private good and a less familiar environmental commodity indicate that although respondents distinguished between lump sum and periodic payment schedules implicit discount rates were very high suggesting that sensitivity to payment schedule is an important subject for further study

political solutions to market problems for some market failures serve as a rationale for public intervention however the fact that self interested market behavior does not always produce felicitous social consequences is not sufficient reason to draw this conclusion it is necessary to assess public performance under comparable conditions and hence to analyze self interested political behavior in the institutional structures of the public sector our approach emphasizes this institutional structure warts and all and thereby provides specific cautionary warnings about optimistic reliance on political institutions to improve upon market performance

testing the internal consistency of contingent valuation surveys abstract for an internal consistency check one can examine wtp responses to different surveys holding an environmental problem constant concave preferences imply wtpconcavein the success of a remedy the same preferences imply wtpconvexin the magnitude of an environmental problem assuming a successful remedy having opposite signed curvature of these two wtp patterns is general not requiring concave preferences for an adding up test an environmental commodity can be divided then wtp for one part plus wtp for the second part conditional on already having the first part equals wtp for the whole adjusted by an income effect

cigarette tax economic welfare and social class patterns of smoking the divergence in social class patterns of smoking in the last two decades means that now only half as many professional men social class 1 smoke as do unskilled working men social class 5 and mortality from smoking related disease is becoming predominantly a lower social class problem the changes in smoking patterns have been attributed to the greater influence of antismoking publicity in the higher social classes while the influence on social class smoking of other factors such as taxation or advertising has been largely unknown this study presents a method for assessing the impact of cigarette tax on members of different social classes responses to tax changes over 17 years are analysed and a method developed for estimating the effects of price changes on tax paid expenditure on cigarettes and economic welfare the results suggest that smokers of lower social class may be more responsive to tax changes and that cigarette tax increases may not be regressive cigarette prices in the uk are still some 25 below the 1948 real price level the downward drift in prices may have effectively increased the smoking levels of lower socioeconomic groups relative to social classes 1 and 2 and may have been a major factor in the divergence in social class smoking i smoking profiles the united kingdom stin experiences high smoking levels about 3 4 of all consumer expenditure is spent on tobacco central statistical office 1982 and this represents the highest per capita consumption in the european economic community commission of the european communities 1982 it is by no means evenly spread throughout the population but is mostly concentrated in the lower social class groups opcs 1982 before the anti smoking health publicity of the early 19605 there was very little difference between the smoking habits of different social classes in the uk around 60 of men and 45 of women in each class smoked cigarettes fig 1 since that time the pattern of smoking has been characterized by a widening divergence in smoking between members of different social classes an overall increase in the number of cigarettes smoked by the average smoker and a narrowing of the difference in women and men s smoking habits by 198549 0 of unskilled working men sc5 smoked cigarettes while only

executive veto power and credit claiming the line item veto has often be heralded as an effective tool in reducing pork barrel spending a model of veto bargaining over public goods and pork barrel spending in the presence of credit claiming incentives demonstrates that the item veto does not necessarily reduce pork barrel spending and reduces the executive s ability to attain his preferred level of spending on public goods the item veto also has an ambiguous effect on the balance of power between the executive and the legislature while strengthening the position of the legislative agenda setter within the legislature

contingent valuation from dubious to hopeless abstract approximately 20 years ago peter diamond and i wrote an article for this journal analyzing contingent valuation methods at that time peter s view was that contingent valuation was hopele

the adding up test in an incentivized value elicitation mechanism the role of the income effect in the context of testing the construct validity of stated preference studies some researchers advocate the use of an adding up test designed to gauge whether elicited values are sufficiently sensitive to a change in the scope i e size of a good crucial to the applicability of this test in practice which relies on endowing a subsample of respondents with a good free of charge is that the income effects due to endowment are negligible in this study we apply the adding up test in an experimental value elicitation format to examine the potential effect of endowment as part of the test design on the adding up property of elicited values the results show that the adding up property can be affected by free provision of part of the bundle

the role of question order and respondent experience in contingent valuation studies abstract grand canyon white water boating was used to address issues in contingent valuation of question ordering and respondent experience question ordering effects were not identified for experienced boaters but did occur in some estimates for less experienced boaters an experience effect is further suggested if respondents value their actual white water trips differently than written scenarios of trips no effect was identified for experienced boaters but a significant difference did occur for less experienced boaters significant differences for less experienced boaters suggest that respondent experience may play a role in value formation resulting in survey instrument effects in valuation estimates

executive budget proposal executive veto legislative override and uncertainty a comparative analysis of the budgetary process this study examines the roles of the executive budgetary proposal the executive veto the legislative override and legislative uncertainty about the executive s preferences in determining the outcome of a budgetary process a sequential model of the budgetary process with three institutional agents a legislature an appropriations committee and an executive is presented to focus attention on the executive proposal the veto the override provision and uncertainty simplifying assumptions are made 1 the appropriations committee has monopoly agenda power and 2 there is a closed amendment control rule in order to characterize sequential equilibria of various combinations of veto rules and override provisions we examine a particular arrangement of agents preferences and a two item budget the results demonstrate that the final budget depends critically on the executive proposal the executive veto rule the override provision and the uncertainty we achieve three striking results first the executive proposal may be effective in reducing the frequency of the exercised veto second for a given override provision a movement from the item veto to the item reduction veto leaves the executive worse off in some cases third with the same change in institutions the government budget may increase