comparing alternative models of heterogeneity in consumer choice behavior summary when modeling demand for differentiated products it is vital to adequately capture consumer taste heterogeneity but there is no clearly preferred approach here we compare the performance of six alternative models currently the most popular are mixed logit mixl particularly the version with normal mixing n mixl and latent class lc which assumes discrete consumer types recently several alternative models have been developed the generalized multinomial logit g mnl extends n mixl by allowing for heterogeneity in the logit scale coefficient scale heterogeneity logit s mnl is a special case of g mnl with scale heterogeneity only the mixed mixed logit mm mnl assumes a discrete mixture of normals heterogeneity distribution finally one can modify n mixl by imposing theoretical sign constraints on vertical attributes we call this t mixl we find that none of these models dominates the others but g mnl mm mnl and t mixl typically outperform the popular n mixl and lc models copyright 2012 john wiley sons ltd

the influence of design dimensions on stated choices in an environmental context discrete choice experiments are increasingly used in the context of environmental valuation however there is still little known about the influence of the complexity of the choice task on model outcomes in this paper we investigate task complexity in terms of the design dimensionality of the choice experiment by systematically varying the number of choice sets alternatives attributes and levels as well as the level range we largely follow a design of designs approach originally introduced in transportation first we analyse the influence of the design dimensionality on participants dropout behaviour finding that the probability to drop out of the survey is influenced by socio demographic characteristics and increases with the number of choice sets attributes as well as with designs having five alternatives second we investigate the impact of the design dimensions on stated choices by estimating a multinomial logit model and heteroskedastic logit models results show that the error term variance is influenced by socio demographic characteristics as well as by all design dimensions moreover we find that accounting for the impact of the design dimension on the error variance does not significantly change willingness to pay estimates

double dividend effectiveness of energy tax policies and the elasticity of substitution a cge appraisal there is a considerable body of literature that has studied whether or not an adequately designed tax swap whereby an ecotax is levied and some other tax is reduced while keeping government income constant may achieve a so called double dividend that is an increase in environmental quality and an increase in overall efficiency arguments in favor and against are abundant our position is that the issue should be empirically studied starting from an actual non optimal tax system structure and by way of checking the responsiveness of equilibria to revenue neutral tax regimes under alternate scenarios regarding technological substitution with the use of a cge model we find that the most critical elasticity for achieving a double dividend is the substitution elasticity between labor and capital whereas the elasticity that would generate the highest reduction in carbon dioxide emissions is the substitution elasticity among energy goods

the generalized multinomial logit model accounting for scale and coefficient heterogeneity the mixed or heterogeneous multinomial logit mixl model has become popular in a number of fields especially marketing health economics and industrial organization in most applications of the model the vector of consumer utility weights on product attributes is assumed to have a multivariate normal mvn distribution in the population thus some consumers care more about some attributes than others and the iia property of multinomial logit mnl is avoided i e segments of consumers will tend to switch among the subset of brands that possess their most valued attributes the mixl model is also appealing because it is relatively easy to estimate recently however some researchers have argued that the mvn is a poor choice for modelling taste heterogeneity they argue that much of the heterogeneity in attribute weights is accounted for by a pure scale effect i e across consumers all attribute weights are scaled up or down in tandem this implies that choice behaviour is simply more random for some consumers than others i e holding attribute coefficients fixed the scale of their error term is greater this leads to a scale heterogeneity mnl model s mnl here we develop a generalized multinomial logit model g mnl that nests s mnl and mixl by estimating the s mnl mixl and g mnl models on 10 data sets we provide evidence on their relative performance we find that models that account for scale heterogeneity i e g mnl or s mnl are preferred to mixl by the bayes and consistent akaike information criteria in all 10 data sets accounting for scale heterogeneity enables one to account for extreme consumers who exhibit nearly lexicographic preferences as well as consumers who exhibit very random behaviour in a sense we formalize below

awareness of ag gag laws erodes trust in farmers and increases support for animal welfare regulations abstract hidden camera investigations are becoming an increasingly popular means of raising public awareness about farm animal welfare however livestock industries claim they are deceptive one strategy to curtail these investigations has been the introduction of so called ag gag legislation which aims to restrict the flow of information coming out of farm facilities psychological research suggests that this approach may be counter productive as reducing information flow often reduces feelings of trust we sought to extend these findings by applying them to a real world timely example and to determine whether the perceived intention to obstruct access to information erodes feelings of trust accordingly this study tested whether simply being made aware of ag gag laws might have a negative impact on trust in farmers participants n 716 were randomly assigned to either receive information about ag gag laws or to a control condition we found that most people were unaware of ag gag laws and that learning about them lead to a decrease in trust in farmers and an increase in support for animal welfare regulations interestingly we also found evidence that awareness of ag gag laws negatively impacted perceptions of the current status of farm animal welfare as well as the perception that farmers do a good job of protecting the environment through this topical example this study demonstrates that even the intention to restrict access to information can undermine trust

confidence lost and partially regained consumer response to food scares abstract in a model of individual information processing a two step risk perception process is proposed first differences in the reliability between single types of suppliers are captured by subjective failure probabilities second trust in an individual supplier is defined as the subjective probability that he is a reliable one this contrasts the standard assumption of a single step risk perception process based on objective probability information the analysis shows that the typically observed consumer response to food scares i e a sharp decline in demand followed by a slow and often incomplete recovery may thus be explained furthermore implications concerning the information strategies of suppliers with respect to food safety are derived

risk perceptions endogenous demand and regulation of agricultural biotechnology abstract this paper presents a dynamic model of optimal product regulation in which consumer acceptance and the rate of product innovation are included as endogenous variables insights derived from the model are used to critically evaluate recent policy controversies regarding regulation of agricultural biotechnology the results of the analysis indicate that if regulatory policy significantly affects consumer risk perceptions more stringent regulatory requirements than those based solely on scientific risk assessment may be economically efficient when demand is endogenously affected by regulatory policies industry may also benefit from stronger regulations even if this results in a significant increase in product development costs

benefits and costs of food safety regulation abstract this paper begins with a review of the concepts and methods that can be used to quantify the benefits and costs of food safety regulations on the cost side where research is only beginning to emerge this paper also provides an analytical framework for measurement of the costs of statutory regulations in the form of design and performance standards this paper also discusses the use and limitations of currently available benefit and cost information for quantitative regulatory impact assessment using the assessment of the mandatory haccp and pathogen reduction regulations in the united states as an example the paper concludes with suggestions for future research on quantifying benefits and costs of food safety regulations

unraveling the choice format effect a context dependent random utility model a few recent studies report that preferences elicited from a two alternative choice format are different from those elicited from a three alternative choice format when both choice set designs contain a status quo option we hypothesize that the choice format effect might disappear when we estimate a random utility model rum that allows for context dependent preferences based on the estimated context dependent rum we find that the choice format effect is likely the result of two offsetting effects a task complexity effect that increases the probability of choosing the status quo option and a preference matching effect which decreases the probability

will export rebate policy be effective for co2 emissions reduction in china a ceepa based analysis china has adopted cancellation of export tax rebate policies on many occasions to push ahead energy conservation and emission reduction since 2007 by applying a ceepa china energy environmental policy analysis system model this paper simulates the impacts of the cancellation of export rebates on co2 emissions and socio economic consequences in different scenarios so as to figure out whether it works this paper covers three export rebate scenarios and makes comparisons between the impacts of export rebates on emission reduction effects and that of carbon tax policies the conclusions are 1 the current policy which cancels export rebates for key sectors can cut emissions at huge economic cost yet it is unsustainable 2 the policy which cancels export rebates for key sectors and meanwhile subsidizes sectoral outputs yields double dividends in the short term thus can facilitate emission reduction yet the boost is limited 3 the policy which cancels export rebates and boosts domestic demand helps improving residents welfare in the short term while it may inflict pronounced social and economic impacts in the long run so policy of this kind should be adopted with great caution 4 export rebates generate far more economic costs than carbon tax policies in the long term and don t contribute to optimizing the energy mix as well as the latter in summary canceling export rebates should not be regarded as a priority to encourage emission reduction

complexity effects in choice experiment based models abstract many firms rely on choice experiment based models to evaluate future marketing actions under various market conditions this research investigates choice complexity i e number of alternatives number of attributes and utility similarity between the most attractive alternatives and individual differences in decision time as key factors that affect the predictive performance of models based on choice experiments both within and between complexity conditions the results show that complexity and individual decision time not only affect the error in consumer choice models but also consumers decision strategy and systematic utilities the authors introduce a complexity adjusted mixed logit cam logit model to capture the various influences of complexity in choice experiment based models they illustrate the consequences of complexity on choice behavior with market share predictions of the cam logit model for different complexity conditions

using choice experiments to estimate consumer valuation the role of experimental design and attribute information loads with fixed dimensionality of choice experiments ces previous simulation results show that d optimal design with correct a priori information generates more accurate valuation in the absence of a priori information random designs and designs incorporate attribute interactions result in more precise valuation estimates in this article monte carlo simulations demonstrate that the performances of different design strategies are affected by attribute information loads in ces consumer valuation estimates in simulation settings vary with the number of attributes

the theoretical benefits of food safety policies a total economic value framework in this paper we examine consumer benefits from food safety policy the main objective is to develop a model that integrates important insights from the literature on consumers responses to food safety we consider four consumer responses product avoidance brand switching averting behavior and mitigation we suggest how these responses are affected by consumers knowledge of marginal product contamination the effect of averting on marginal product contamination the health effects of total exposure to contaminants and the mitigation expense associated with these health effects

norwegian climate policy reforms in the presence of an international quota market abstract this study shows that the second best optimal difference between tax rates on goods that generate greenhouse gas emissions and non polluting goods is equal to the quota price plus a ramsey tax on the quota price when emission quotas are traded between governments and the price elasticity of these goods is identical this tax difference exceeds the second best optimal difference between tax rates on goods that generate a negative externality equivalent to the quota price and non polluting goods model simulations show that a unilateral increase in emission tax to above the international quota price generates a welfare gain for norway model simulations also show that an international tax quota price increase generates a welfare gain loss for norway if norwegian imports of oil become substantial marginal in the long run

are choice experiments reliable evidence from the lab this study investigates whether a popular stated preference method the choice experiment ce reliably measures individuals values for a good we address this question using an induced value experiment our results indicate that ces fail to elicit payoff maximizing choices we find little evidence that increasing the salience of the choices or adding monetary incentives increase the proportion of payoff maximizing choices this questions the increasing use of ce to value non market goods for policy making

choice consistency and preference stability in test retests of discrete choice experiment and open ended willingness to pay elicitation formats this study tests the temporal stability of preferences choices and willingness to pay wtp values using both discrete choice experiment dce and open ended oe wtp elicitation formats the same sample is surveyed three times over the course of two years using each time the same choice sets choice consistency is positively correlated with choice certainty and choice complexity the impact of choice complexity fades away in time most likely as a result of learning and preference refinement although the oe wtp values remain stable over a time period of 2 years as in previous stated preference studies dce based wtp measures differ significantly suggesting their use in benefits transfer may be limited

cost function estimation and quality bias the regulated automobile insurance industry this article explores the implications of endogenous product quality and therefore endogenous output in the empirical estimation of cost functions for regulated automobile collision insurance firms it contains a structural model of such a firm and provides an illustration of the types of biases that can result if data on quality of service are unavailable or otherwise omitted the analysis shows how the directions of biases depend on the nature of the variations in the observed nonquality data a new test suggests that such bias is present in insurance cost functions

on mandatory labeling of animal welfare attributes this paper assesses us resident support for mandatory labeling of animal welfare information on pork and egg products and outlines policy considerations for assessment prior to implementing any mandatory labeling policies regarding animal welfare practices results suggest consumers support mandatory labeling indicating use of gestation crates stalls and laying hen cages estimates suggest consumers would be willing to pay about 20 higher pork and egg prices to obtain this production practice information demographic and latent perception drivers of this support are highlighted multiple issues that warrant consideration prior to imposing mandatory labeling are discussed revealing lines of corresponding future research

the contingent valuation debate why economists should care t he contingent valuation method involves the use of sample surveys questionnaires to elicit the willingness of respondents to pay for generally hypothetical projects or programs the name of the method refers to the fact that the values revealed by respondents are contingent upon the constructed or simulated market presented in the survey a spirited and occasionally mean spirited battle over such methods is currently being waged involving competing factions within the federal government economists and lawyers representing business and environmental groups and interested academics as well at issue is a seemingly quite specific question should environmental regulations currently under development at both the department of the interior and the department of commerce sanction the use of the contingent valuation method in estimating the damage done by spills of oil chemicals or other substances covered by federal law more generally the debate raises broad questions about what economists have to say about the values that individuals place on public or private goods the two papers that follow this one make cases for and against the use of the contingent valuation method my aim here is to provide an overview of the technique and the debate surrounding it i also want to suggest why this debate should matter to economists both professionally and in their roles as citizens and consumers

carbon taxation in russia prospects for a double dividend and improved energy efficiency russia is not only one of the world s major sources of carbon based energy coal oil and gas but is also one the most intensive users of energy furthermore russia accounts for a disproportionately large share of global carbon dioxide emissions some 5 to 6 of global carbon dioxide emissions eia 2011a it has been estimated world bank 2008 that russia could reduce its use of primary energy use by 45 with consequent economic and environmental benefits high energy and carbon intensity of the russia economy is inter alia explained by low energy prices due to high export taxes as well as administrative regulation of domestic prices of gas and electricity and low environmental taxes carbon taxes are one such pigouvian tax and they would address concerns on several fronts simultaneously in the short to medium term they would inter alia lead to lower ghg emissions and encourage the diffusion of more energy efficient technologies in the longer term the increased cost of energy inputs is expected to induce technological progress in this analysis the macroeconomic and sectoral effects of carbon taxes on the russia economy are examined this analysis addresses the following objectives i to test the double dividend hypothesis under perfect and imperfect competition in output markets to analyse ii the incidence of carbon taxes iii impacts on sectoral competitiveness iv effects on income equity and v interactions of carbon taxes with other taxes a computable single country multi sector comparative static cge model is employed russland verfugt nicht nur uber einen der grosten vorrate an kohlenstoffbasierter energie wie kohle rohol und gas sondern ist auch einer der grosten energieverbraucher daruber hinaus ist russland fur einen uberproportional grosen anteil von kohlendioxid emission etwa 5 bis 6 der weltweiten kohlendioxidemission verantwortlich mit der einfuhrung einer kohlendioxidsteuer konnten gleichzeitig unterschiedliche wirkungen erzielt werden kurz und mittelfristig wurden kohlenstoffsteuern sowohl zu einer reduzierung von treibhausgasemissionen als auch zur einfuhrung von energieeffizienteren technologien fuhren langfristig wird erwartet dass hohe energiekosten den anreiz zur entwicklung und zur investition in energiesparenden technischen fortschritt erhohen die vorliegende arbeit analysiert und bewertet die makrookonomischen und sektoralen auswirkungen einer einfuhrung von kohlenstoffsteuern auf die russische wirtschaft die ziele der arbeit bestehen darin die hypothese der doppelten dividende fur den fall des vollkommenen und des unvollkommenen wettbewerbs auf gutermarkten zu uberprufen und die inzidenz einer kohlenstoffsteuer ihre auswirkungen auf die sektorale wettbewerbsfahigkeit ihre auswirkungen auf die einkommensverteilung und die interaktion von kohlenstoffsteuern mit anderen steuern zu analysieren und zu bewerten als methodischer ansatz wurde ein single country und multi sektor model gewahlt

economic and welfare influences of an energy excise tax in jiangsu province of china a computable general equilibrium approach abstract in recent years although china s energy intensity has gradually decreased the total consumption of energy commodities has increased sharply levying an excise tax on energy commodities is one of the keys to control energy consumption this paper constructed a computable general equilibrium model to simulate levying an energy excise tax in jiangsu province which is one of china s strong economic provinces with lower endowments of energy resources the results show that the energy excise tax is beneficial for energy saving while levying energy will cause economic and welfare declines when at a level tax rate of 5 10 and 15 the loss of gdp will reach 0 27 0 66 and 1 13 respectively and the incomes of inhabitants and enterprises alike will decrease when the energy tax revenue used to compensate for the welfare losses suffered by inhabitants or enterprises there is a double dividend effect energy saving and increasing income moreover the simulation indicated that a 5 improvement of energy efficiency brings about a backfire phenomenon with an increase of 142 in energy consumption however when considering the cost of energy efficiency improvements the rebound effect will be significantly decreased policy suggestions are further recommended to help improve the energy policy in regard to reducing energy consumption

the theory of reform and indian indirect taxes abstract given a set of value judgements an initial state and a model of the economy one can ask whether some feasible tax change would increase welfare we do this by defining the marginal cost in terms of welfare of raising an extra rupee from the i th good the inverse optimum problem is the calculation of non negative welfare weights on households which imply that the initial state is optimum if no such welfare weights exist then a pareto improvement is possible we illustrate the concepts and results using data from the indian economy for 1979 1980 directions of tax reform for a number of specific social welfare functions and for pareto improvements are presented

designing discrete choice experiments do optimal designs come at a price in discrete choice experiments design decisions are crucial for determining data quality and costs while high statistical efficiency designs are desirable they may come at a price if they increase the cognitive burden for respondents we address this problem by designing 44 experiments that systematically vary numbers of attributes and attribute level differences our results for two product categories suggest that respondents systematically are less consistent in answering choice questions as statistical efficiency increases this relationship holds regardless of the number of attributes and is statistically significant even if one accommodates preference heterogeneity implications for practice and future research are discussed

the effect of consumers real world choice sets on inferences from stated preference surveys for stated preference sp studies we develop a model that assesses the influence of choice set misspecification arising from the omission of perceived substitutes among real world alternatives in the same class of goods this problem is most likely to be present when individuals are allowed to select a no purchase option instead of being forced to choose from an explicit set of sp alternatives with hypothetical attribute levels a convenient feature of our model is that researchers do not need to know exactly which omitted real substitute the individual most prefers only the set of real substitutes that exists in our empirical illustration a comparison of rival models suggests researchers who overlook the presence of perceived real alternatives related to an sp experiment can end up with noticeably biased welfare estimates our more general model suggests that it may be prudent for future sp researchers to anticipate then test and possibly correct for distortions in utility parameter estimates that result from this problem

the impact of deal proneness on wtp estimates in incentive aligned value elicitation methods even after controlling for hypothetical biases some incentive aligned value elicitation methods still produce different willingness to pay wtp estimates in this study we compare wtp estimates from three incentive aligned value elicitation methods real choice experiment rce real double bounded dichotomous contingent valuation rcvm and becker degroot marschak auction bdm we find that participants aggressiveness in obtaining low prices i e deal proneness influences wtp estimates in the bdm auction but not those elicited from the rce and rcvm the participants with higher levels of deal proneness tend to submit lower bids in the bdm auction the discrepancies in wtp estimates between different incentive aligned procedures are narrower for participants with lower levels of deal proneness our results indicate that the bids in bdm auctions may be understated and the auction mechanism may induce the gambling behavior of people who are deal prone that is whether the bdm auction is truly incentive aligned is again called into question we also discuss the practical implications for food retailers

the economic implications of using haccp as a food safety regulatory standard abstract this article discusses the nature and role of hazard analysis critical control point haccp as a food safety control system and in particular its role as an element of public food safety regulation the notion of efficiency in food safety regulation is discussed and related to the nature of food safety controls it is suggested that if appropriately applied haccp is a more economically efficient approach to food safety regulation than command and control cac interventions the economic implications of haccp are discussed with reference to estimates of the costs and benefits in particular for the food industry finally the use of haccp as an international trade standard and the facilitation of trade in processed food products is considered

optimal sharing of foodborne illness prevention between consumers and industry the effect of regulation and liability consumers and the food industry can both prevent foodborne illness two questions are explored what is the socially optimal level of preventative effort by each and can tort and regulatory instruments induce such behavior analysis is complicated by two aspects of food safety technology one party s effort can affect the marginal effectiveness of the other party s effort and damage functions can be nonconvex previous analysis of accidents under torts and regulation fails to consider these generalizations indeed results concerning the ability of tort and regulatory instruments to induce first best and second best behavior often contradict previous results in the literature

the effect of fossil energy and other environmental taxes on profit incentives for change in an open economy evidence from the uk this paper argues that the underlying supply and demand analysis of fossil energy and other environmental taxes needs further elaboration when a country a introduces national fossil energy or environmental taxes and b is open to international trade at given world prices we provide evidence that such conditions are plausible for many sectors in the uk a key implication is that the short run effects of such taxes should not be felt in final good prices since these are determined in world markets but in terms of underlying profitability these changes in underlying profits provide two key incentives for producers to change to more environmentally friendly production techniques and to switch resources to production of less environmentally harmful goods using input output techniques we provide evidence for the uk to show how existing fossil energy and other green taxes have affected underlying profitability the evidence shows quite strong profit incentives to shift resources from a small number of energy intensive industries to others

effects and mechanism of influence of china s resource tax reform a regional perspective abstract china s resource tax reform beginning with xinjiang as a pilot area in june 2010 marked a new stage in the progression of china s resource tax system based on the 2007 social accounting matrix sam for xinjiang constructed by ourselves this paper takes a regional perspective on china s resource tax reform to quantitatively calculate its degree of influence and qualitatively analyze its mechanism of influence by adopting an energy computable general equilibrium cge model and a sam price model the results show that the main significance of the reform lies in bolstering local government finances rather than energy conservation or carbon reduction this is because revenue will be transferred from resource enterprises and the central government to the local government while simultaneously the low tax rate narrow tax scope and unreasonable price mechanism will combine to prevent the reform from reaching its environmental goals promoting resource price mechanism reform and deepening resource tax reform will be two key elements of china s future energy strategies because resource enterprises will bear the increased burden caused by the reform the degree of sectoral price increases will be limited therefore the fear that resource tax reform will push up inflation is unnecessary and should not be a barrier to reform

carbon taxation and market structure a cge analysis for russia abstract russia is one of the world s major sources of carbon based energy as well as one its most intensive users introducing carbon taxes can lead to a reduction in emissions and encourage investment in energy efficiency we investigate the economic effects of carbon taxes on the russian economy under perfect competition and a cournot oligopoly in output markets the main findings are i substituting carbon taxes for labour taxes can yield a strong double dividend in russia however welfare gains strongly depend on the labour supply elasticity and elasticities of substitution between capital labour and energy ii under the assumption of a cournot oligopoly with homogenous products and symmetric firms in the markets for natural gas petroleum and chemical products metals and minerals welfare costs of the environmental tax reform can be higher than under perfect competition this is because introducing carbon taxes leads to a reduction in already sub optimal output thereby exacerbating pre existing distortions arising from imperfect competition iii furthermore increases in energy costs can result in higher mark ups in some markets because of less competition resulting from firms exit

how shifting investment towards low carbon sectors impacts employment three determinants under scrutiny abstract the threat of climate change requires redirecting investment towards low carbon sectors and this shift generates heated debates about its impact on employment many studies exist most of which use cge or input output io models however the economic mechanisms at play remain unclear this paper disentangles the channels of job creation and studies to what extent the results of simpler io models diverge from cge results using stylized models we show that a shift in investment creates jobs in io if it promotes sectors with a higher share of labour in value added lower wages or a lower import rate in cge the first two channels also yield job creation but there is no positive impact of targeting low imports sectors unless these do not export then we undertake a numerical analysis of two policies the installation of solar panels and weatherization in france both policies have a positive effect on employment in both models due to the high share of labour and low wages in these sectors io results provide a good approximation of cge results for solar 14 to 34 and are slightly higher for weatherization 22 to 87 our findings challenge the idea that renewables boost employment by reducing imports but they also suggest that a double dividend can be achieved by encouraging low carbon labour intensive sectors

no such thing as a free safe lunch the cost of food safety regulation in the meat industry this study develops theoretical and econometric cost function models for the meat industry to test the hypothesis of safety exogeneity i e that product safety does not affect productive efficiency using plant level data from the census of manufactures this hypothesis is rejected estimates of the impacts of food safety regulation on variable cost of production in the beef pork and poultry industries show that the efficiency costs of food safety regulations could plausibly exceed benefits estimated by the u s department of agriculture costs of regulation per pound of meat are found to be size neutral for all but the smallest plants copyright 2000 oxford university press

determinants of retailers decisions to use public or private grades and standards evidence from the fresh produce market of sao paulo brazil abstract this paper models retailers choices between public and private grades and standards g s and their means of administering them it focuses on the firm specific factors influencing the decision increasing use of private g s worldwide particularly by large powerful retail chains has implications for competition participation and the effectiveness and efficiency of public policy regarding g s drawing from a study of fresh produce markets in sao paulo brazil the paper shows that the importance of the product in the firm s activities or sales market power scale of operations and investment in brand capital and reputation are key firm specific factors encouraging the use of private g s regimes over public important contextual determinants are the strategic objective of the standard the institutional environment and the characteristics of the product and market a range of formal and informal private and public methods for administering g s was found the paper discusses policy implications of the results focusing on issues of substitutability and complementarity between public and private g s regimes

effect of experimental design on choice based conjoint valuation estimates in this article we investigate the effect of several commonly used experimental designs on willingness to pay in a monte carlo environment where true utility parameters are known all experimental designs considered in this study generated unbiased valuation estimates however random designs or designs that explicitly incorporated attribute interactions generated more precise valuation estimates than main effects only designs a key result of our analysis is that a large sample size can substitute for a poor experimental design overall our results indicate that certain steps can be taken to achieve a manageably sized experimental design without sacrificing the credibility of welfare estimates

the influence of task complexity on consumer choice a latent class model of decision strategy switching the literature indicating that person context and task specific factors cause consumers to utilize different decision strategies has generally failed to affect the specification of choice models used by practitioners and academics alike who still tend to assume an utility maximizing omniscient indefatigable consumer this article 1 introduces decision strategy selection within a maintained compensatory framework into aggregate choice models via latent classes which arise because of task complexity 2 it demonstrates that within an experimental choice task the model reflects changing aggregate preferences as choice complexity changes and as the task progresses the import of these findings for current practice model interpretation and future research needs is examined

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

willingness to pay estimation with choice based conjoint analysis addressing extreme response behavior with individually adapted designs the increasing consideration of behavioral aspects in operations management models has prompted greater use of choice based conjoint cbc studies in operations research such studies can elicit consumers willingness to pay wtp a core input for many optimization models however optimization models can yield valid results only if consumers wtp is estimated accurately a simulation study and two field studies show that extreme response behavior in cbc studies such that consumers always or never choose the no purchase option harms the validity of wtp estimates reporting the share of consumers who always and never select the no purchase option allows for detecting extreme response behavior this study suggests an individually adapted design that avoids extreme response behavior and thus significantly improves wtp estimation accuracy

on the impacts of carbon tax and technological progress on china using a dynamic national computable general equilibrium model we investigate the impact of carbon tax and energy efficiency improvement on the economy and environment of china the chinese social

valuing changes in health risks a comparison of alternative measures essential to efficient provision of health safety and the environment is correct valuation of risks to human health in a world of scarcity difficult decisions concerning tradeoffs between health and other desirables are unavoidable in this paper we develop a model of health investment under uncertainty which yields a general expression for values of changes in risks to human health the preference based values of morbidity risks and mortality risks are ex ante dollar equivalents of changes in expected utility associated with risk changes the preference based values are related to two alternative measures costs of illness and preventive expenditures which are thought to be lower bounds on the value of risk reductions we demonstrate that these alternative measures are not even special cases of the more general measure and that the size relationships among the three measures are complex also we derive the relationship between the willingness to pay for risk changes and the consumer surpluses associated with health changes which occur with certainty the next section contains a brief review of the approaches to valuing changes in health

rational choice under an imperfect ability to choose we consider an individual who lacks the information processing capacity required for a direct comparison of all feasible allocations instead of finding at once a best allocation the individual myopically adjusts his current allocation toward higher utility the individual makes adjustment errors inversely proportional to his ability to choose we compare the stationary state of this process with the standard model we see how an imperfect ability to choose modifies both positive and normative predictions of the standard model and how the standard model can be obtained from our more general one as the special case corresponding to perfect ability jel d 11

whatever the customer wants the customer gets exploring the gap between consumer preferences and default electricity products in germany abstract in liberalized electricity markets residential customers can choose their preferred provider and select among a variety of different electricity products including green power options successful product design and marketing strategies for green electricity may provide electricity providers with a competitive advantage while at the same time contributing to energy policy objectives this requires however a thorough understanding of customer preferences we investigate the relative importance of different product attributes in creating customer value and find that price and electricity mix are the two most important attributes the german electricity customers we surveyed in 2009 expressed an implicit willingness to pay a premium of about 16 for electricity from renewable sources we conclude that consumers are willing to pay a significant price premium for an upgrade from the current default electricity mix in germany to a more environmentally friendly default electricity mix and discuss implications for marketing strategy and energy policy our findings are based on a dataset of 4968 experimental choices made by 414 german residential consumers collected in a stated preference survey

dynamic hypothetical bias in discrete choice experiments evidence from measuring the impact of corporate social responsibility on consumers demand abstract this paper is aimed at studying the dynamics of consumers preferences for corporate social responsibility the data come from both a discrete choice experiment dce and a field experiment conducted in a real market setting the results show that in a static setting first month predictions of a standard dce study and real market shares are statistically similar for the various profiles of corporate social responsibility however as time evolves real market shares present some dynamic patterns that are not mirrored by the standard dce predictions the overall conclusion is that differences between real market behavior and dce data can be attributed to the lack of learning experience or adaptation in dce surveys rather than to the hypothetical nature of the experiments

the impacts of carbon pricing on coastal megacities a cge analysis of singapore abstract pricing carbon is a widely used policy instrument for climate change mitigation quantitative analysis of carbon pricing are mainly conducted at the regional and national level rarely at the city level due to data availability as a representative of coastal megacities that are vulnerable to both climate change and climate policies singapore has announced to impose carbon tax on large direct emitters as a complementary mitigation option to technical measures a city level computable general equilibrium cge model is developed to simulate potential impacts of carbon pricing on the city including paying border carbon adjustment bca on exports or introducing a domestic carbon tax different sector coverages and carbon tax revenue recycling schemes are investigated for domestic carbon tax the simulation results show that a domestic carbon tax is a more cost effective option than paying bca given an identical carbon price at s 10 t co 2 gdp total exports and household consumption would decline less and average abatement cost is much smaller in the carbon tax scenarios compared to the bca scenario in terms of absolute emissions reduction a carbon tax that covers energy manufacturing and land transport sectors would be preferred making emissions around 2 7 lower than 2010 baseline level