using spatial microsimulation to account for demographic and spatial factors in environmental benefit transfer abstract this paper presents a simulation based modelling approach for estimating total visitor numbers and amenity values for prospective non priced open access outdoor recreation sites to begin the geographic extent of the market for recreation at a policy site is estimated using data from a similar study site the population residing within this geographic area is simulated using a spatial microsimulation model and gis techniques and an individual level visitor arrival function is then transferred across this simulated population this allows the latent demand for visits to the policy site by each simulated individual to be predicted and summed providing an estimate of the total potential demand for recreation at the site combining this with an economic value measure of a visit provides an estimate of the potential amenity value of the policy site the approach is applied to moyode wood a small scale forest in the west of ireland and estimates the potential total economic value of recreation at 0 4 million for the site the research represents the first time that spatial microsimulation has been used in environmental benefit transfer and shows how it can be used to control for differences in demographic and spatial factors between study and policy sites it also demonstrates how individual level single site travel cost models estimated using on site survey data can be used to predict demand at alternative policy sites

the causes of preference reversal observed preference reversal cannot be adequately explained by violations of independence the reduction axiom or transitivity the primary cause of preference reversal is the failure of procedure invariance especially the overpricing of low probability high payoff bets this result violates regret theory and generalized nonindependent utility models preference reversal and a new reversal involving time preferences are explained by scale compatibility which implies that payoffs are weighted more heavily in pricing than in choice copyright 1990 by american economic association

green goods are they good or bad news for the environment evidence from a laboratory experiment on impure public goods green goods such as recycled paper stationary or carbon neutral flights provide increasingly popular examples of impure public goods motivated by theoretical treatments of green goods as a bundle of private and public characteristics in proportions fixed by the provider we design an experiment with two linked treatments to test how the presence of impure public goods affects behaviour towards public good causes we set parameters such that from a standard economic perspective the presence of the impure public good is behaviourally irrelevant in a treatment where the impure public good provides only small contributions to the public good we observe that on aggregate pro social behaviour is lower in the presence of the impure public good on the contrary in the treatment where the impure public good is more generous towards the public good component at the expense of private earnings individuals are unaffected in their behaviour we observe that impure public goods that are theoretically irrelevant and are mostly self interested may hinder pro social behaviour and look for explanations in social psychology such as the phenomenon of thoughtful anchoring motivated reasoning and reluctant altruism the results from this experiment question the role of green goods in enhancing environmentally friendly behaviours

non transitive choice event splitting effects or framing effects recent studies have examined possible causes of the robust empirical failure of the transitivity axiom of expected utility theory by pitting regret aversion against alternative explanations such as event splitting effects these tests show that cycles replicate when the latter are controlled but are sensitive to changes in problem representation the control for event splitting effects however does not rule out their contribution to cyclical choices in some circumstances an experiment is reported which investigates this possibility cyclical choices are observed that cannot be due to event splitting effects but appear attributable to within event and between act evaluations of decision problems plus framing effects

how foreign firms curtail local supplier opportunism in china detailed contracts centralized control and relational governance an ongoing debate in the interfirm exchange literature concerns whether economic and social governance mechanisms function as substitutes or complements we advance a more nuanced approach to examining how detailed contracts and centralized control interact with relational governance differentially in curbing local supplier opportunism in emerging markets we suggest that where legal institutions are weak detailed contracts are ineffective in containing partner opportunism in contractually specified areas under such circumstances relational governance provides a proxy for legal institutions to ensure contract execution meanwhile relational governance serves as an alternative mechanism to centralized control for ensuring contingency adaptations based on a sample of 168 foreign buyer local supplier exchanges in china we find that relational governance complements detailed contracts but substitutes for centralized control in curtailing opportunism therefore foreign firms must be cautious in their combinative use of social and economic mechanisms in governing exchanges with local suppliers in emerging markets

randomization devices and the elicitation of ambiguity averse preferences abstract in random incentive mechanisms agents choose from multiple problems and a randomization device selects a single problem to determine payment agents are assumed to act as if they faced each problem on its own while this approach is valid when agents are expected utility maximizers ambiguity averse agents may use the randomization device to hedge and thereby contaminate the data

does the preference reversal phenomenon necessarily contradict the independence axiom one of the most puzzling paradoxes in decision theory is the preference reversal phenomenon this phenomenon seems to contradict the transitivity axiom for a long time one of the cornerstones of utility theory this paradox is established whenever a decision maker prefers lottery x to lottery y but is willing to put a lower selling price on x than on y such experiments first reported by harold lindman 1971 and sarah lichtenstein and paul slovic 1971 were repeated by david grether and charles plott 1979 werner pommerehne et al 1982 and robert reilly 1982 although the later researchers improved the mechanism through which the selling price emerges they all found systematic reversals a new approach to this problem was developed by charles holt 1986 and edi karni and zvi safra 1987 from two different starting points these authors showed that the preference reversal phenomenon does not necessarily prove a violation of the transitivity axiom as it may contradict the independence axiom this implies that people do not maximize expected utility but in that case the preference reversal phenomenon becomes just another evidence against expected utility theory but not against the transitivity axiom these results have their own disadvantages although the independence axiom is not as fundamental as transitivity it is nevertheless very appealing on normative grounds of course the preference reversal phenomenon necessarily contradicts at least one of the assumptions of expected utility theory but empirical evidence shows that despite its normative appeal violations of the reduction of compound lotteries axiom may happen see for example joshua ronen 1971 and doug snowball and clif brown 1979 in this paper i therefore suggest a decision mechanism for the preference reversals lotteries which is transitive and satisfies the independence axiom but not the reduction axiom

lottery choice incentives complexity and decision time this paper reports the results of an experiment on lottery choice in which decision cost is measured as decision making time a simple decision cost model motivates this measurement and the experiment and predicts relationships between incentive mechanism manipulations and decision making time which are borne out in the experiment the decision cost model also suggests that decisions will change in the face of the incentive manipulations in the experiment this suggestion is borne out in a complex decision making environment but not in a simple one specification tests demonstrate that observed changes in subjects behavior are not merely due to changes in subject specific error variance one may conclude from this that the payoff dominance problem is a real issue in complex decision making experiments copyright 1993 by royal economic society

are preferences monotonic testing some predictions of regret theory in this paper the authors demonstrate that the assumption of regret aversion which has been invoked in regret theory to explain several well documented violations of expected utility theory also implies the existence of strict preferences between some stochastically equivalent actions and implies certain systematic violations of monotonicity the authors report an experimental test of these predictions they find that while choices between stochastically equivalent actions are entirely consistent with expected utility theory there is clear evidence of the monotonicity violations predicted by regret theory copyright 1992 by the london school of economics and political science

preference reversals and the independence axiom of all of the paradoxical patterns of behavior reported in laboratory experiments one of the most perplexing for decision theorists is the preference reversal phenomenon a subject in a preference reversal experiment is typically given a choice between a lottery with a high probability of winning a modest amount of money a p bet and a lottery with a low probability of winning a large amount of money a bet the lowest amount of money for which the subject would willingly sell either of these lotteries is also elicited the most common reversal is for a subject to choose the p bet over the bet but to put a higher selling price on the bet preference reversals were first reported by harold lindman 1971 and sarah lichtenstein and paul slovic 1971 in discussing the psychologists discovery of such reversals david grether and charles plott remark the inconsistency is deeper than mere lack of transitivity or even stochastic transitivity it suggests that no optimization principles of any sort lie behind even the simplest of human choices 1979 p 623 this paper offers a simple alternative explanation of documented preference reversals an explanation that does not require the abandonment of the transitivity assumption

do subjects remember the past in many experiments experimenters use the random lottery incentive mechanism and ask many questions to each subject that is at the end of the experiment just one of the questions is picked at random and the subject paid on the basis of their answer to this one question the idea is that subjects should separate the various questions and reply to each as if it were a separate question this procedure is methodologically sound if the subjects preferences obey expected utility eu theory which implies a form of separation but if they do not this incentive mechanism is open to criticism indeed many referees use this argument against the research they argue that subjects do not consider questions separately if the questions are revealed to the subjects one by one then the appropriate alternative hypothesis is that their behaviour evolves with the questions here this hypothesis is tested that the questions already answered affect the answers to the subsequent questions the analysis shows that

foreign venture capitalists and the internationalization of entrepreneurial companies evidence from china we use a comprehensive database of venture capital backed companies from china to test whether and how foreign venture capitalists vcs can facilitate international initial public offerings of entrepreneurial companies foreign vcs increase the likelihood that a portfolio company will list on a foreign exchange and use a top lawyer banker or accountant when doing so the propensity to list overseas is moderated by the number of venture backers the fund s size and governance in the domestic market foreign vcs encourage foreign listings in domestic backed companies we take steps to address sample selection and endogeneity concerns overall we show that foreign vcs encourage internationalization in entrepreneurial companies

study on benefit transfer in an international setting how to improve welfare estimates in the case of the countries income heterogeneity abstract the paper aims at investigating the validity of benefit transfer in the case of transfers between countries highly heterogeneous in income and demonstrates relative performance of different benefit transfer methods under these conditions lake water quality valuation studies were conducted in two countries in transition poland and the czech republic they reflected two earlier studies carried out in norway we examine how income elasticity of wtp varies with the levels of income and find support for applying the income elasticity of 1 to adjust transferred welfare estimates in case of high differences in income between countries in addition we show that using site specific measures of income outperforms transfers based on gpd per capita the accuracy of benefit transfer is compared using equivalence testing following the tosc two one sided convolutions test a new more informative way of reporting equivalence is proposed based on computing minimum tolerance level rather than specifying it a priori

values elicited from open ended real experiments abstract the idea that preferences are only revealed by real incentives is deeply embedded in economists worldview consequently evidence from hypothetical experiments has not readily permeated economic thinking one method for determining whether hypothetical experiments provide useful information about preferences is to compare them to similar real goods experiments this study looks at responses elicited by three real experiments we examine the proportion of responses that meet a series of criteria that range from a broad appeal of plausibility to a narrow restriction based on quasi concavity of preferences we argue that these proportions are unreasonably low

reduction of compound lotteries with objective probabilities theory and evidence abstract the reduction of compound lotteries axiom rocl has assumed a central role in the evaluation of behavior toward risk and uncertainty we present experimental evidence on its validity in the domain of objective probabilities our battery of lottery pairs includes simple one stage lotteries two stages compound lotteries and their actuarially equivalent one stage lotteries we find violations of rocl and that behavior is better characterized by a source dependent version of the rank dependent utility model rather than expected utility theory since we use the popular 1 in k random lottery incentive mechanism payment procedure in our main test our experiment explicitly recognizes the impact that this payment procedure may have on preferences thus we also collect data using the 1 in 1 payment procedure we do not infer any violations of rocl when subjects are only given one decision to make these results are supported by both structural estimation of latent preferences as well as non parametric analysis of choice patterns the random lottery incentive mechanism used as payment protocol itself induces an additional layer of compounding by design that might create confounds in tests of rocl therefore we provide a word of caution for experimenters interested in studying rocl for other purposes such as the relationship between ambiguity attitudes and attitudes toward compound lotteries to carefully think about the design to study rocl payment protocols and their interaction with the preferences being elicited

economic theory of choice and the preference reversal phenomenon a reexamination in a recent issue of this review david grether and charles plott 1979 hereinafter referred to as g p presented a series of experiments that show that individual decisions are made in a manner inconsistent with standard preference theory this inconsistency can be illustrated by the following example individuals under suitable laboratory conditions first have a choice between a lottery with a high probability of winning a small sum of money the p bet probability bet and a lottery with a high stake but low probability of winning the m bet money bet after indicating a preference for one of the lotteries in the pair the same subjects are then asked to place a monetary value on each of the individual lotteries grether and plott found that a large number of participants stated a preference for the p bet in the first round but placed a higher value on the other lottery the m bet in the second round this behavior a preference reversal is inconsistent with the traditional statements of preference theory

the liability of foreignness in capital markets sources and remedies the accelerating pace of global capital market integration has provided new opportunities for firms to raise capital abroad through global debt issues cross listings and initial public offerings in foreign stock exchanges however existing empirical evidence suggests that foreign firms tend to be at a disadvantage compared with domestic firms and they often suffer from investors home bias the objective of this paper is to understand why firms are facing problems when accessing capital in foreign markets and possible mechanisms that can help to mitigate these problems it expands the liability of foreignness lof research beyond the product market domain to include liabilities faced by firms attempting to secure resources in foreign capital markets we identify key differences between product and capital markets related to information environment time structure of transactions and linkages between buyers and sellers we analyze institutional distance information asymmetry unfamiliarity and cultural differences as the main sources of capital market lof cmlof we suggest possible mechanisms that managers can employ to mitigate cmlof and overcome investors home bias bonding signaling organizational isomorphism and reputational endorsements we also outline directions for further theoretical and empirical development of the cmlof research

a bayesian model for benefit transfer application to national parks in spain valuing environmental goods through benefit transfer is based on information from the set of past empirical studies of similar or identical sites this paper proposes a bayesian approach to model prior information on mean consumer surplus the prior distribution is defined as a convex combination of the results from past empirical studies an advantage of the bayesian approach is that the prior distribution could be combined with on site sample information in order to improve predictions on the benefits of the policy site the model is applied to data from national parks in spain the results show that the benefits of policy sites are more sensitive to the prior information for smaller sample sizes this implies that the prior distribution can be seen as a substitute for on site sample information

yes in my backyard spatial differences in the valuation of forest services and local co benefits for carbon markets in mexico forests provide many and large benefits including cost efficient climate change mitigation however international carbon markets have not stimulated the demand for forestry offsets domestic market mechanisms are emerging in many countries and forests could be highly valued through these policies as most of the benefits produced by forests are enjoyed locally here a choice experiment explores drivers of valuation and willingness to pay for forest carbon services in voluntary markets in mexico by comparing the valuation of citizens from four regions to test geographical preference for projects n 645 findings from multinomial logit models show valuation of forest carbon services is transferable and citizens would pay more for offsets from projects closer to their homes proximate forests provide a range of co benefits to local users including environmental services and opportunities for recreation factors related to valuation include sense of responsibility previous knowledge of carbon emissions previous visits to the sites regional identification and the valuation of local environmental services e g improvements in local air quality knowledge of spatial heterogeneity in valuation of the use of forest services can help to design market based instruments by identifying highly valued areas for environmental services programs and carbon markets

cross border venture capital investments the impact of foreignness on returns against the background of the growing internationalization of venture capital vc investing this is the first global comparison of the returns generated by individual domestic and cross border deals we examine investments worldwide during 1971 2009 and find that cross border investments significantly underperform compared with equivalent domestic investments returns are negatively affected by geographic distances cultural disparities and institutional differences between the home and host countries returns on cross border and domestic deals also decline after the late 1990s international portfolio diversification and the saturation of domestic markets may explain why vc investors make cross border investments despite poor expected returns

is meta analysis a noah s ark for non market valuation this paper describes meta analytical methods as they have been applied to non market valuation research these studies have been used to review and synthesize literature and more recently in benefit transfer this second use imposes a higher standard on the consistency in economic concepts being summarized and in the resources included in a meta analysis to meet this need the paper proposes and illustrates a structural framework using a generalized method of moments estimator to estimate the parameters of a preference function with the benefits estimates usually encountered in meta analytic summaries

valuing non market valuation studies using meta analysis a demonstration using estimates of willingness to pay for water quality improvements abstract a common refrain in the environmental economics literature is the need for additional estimates of environmental and natural resource values yet economists have paid little formal attention to the value of information voi provided by non market valuation studies and whether this value justifies the cost we develop a novel voi model to quantify the benefit of non market valuation studies conducted to expand the body of value estimates in the literature and hence available for use in policy analyses the approach is designed to capitalize on information available through preexisting valuation meta data and can be applied to any valuation meta regression that is suitable to inform policy decisions we illustrate the approach for a prototype nationwide water quality improvement policy in the united states assuming that policy benefits are evaluated using benefit transfer based on a meta regression model of willingness to pay our results suggest that when evaluating nationwide water quality regulations with uncertain net benefits the voi from a typical water quality valuation study will almost certainly exceed the cost we also examine how voi varies with study design features and information gaps in the literature thereby illustrating how the approach can inform research priorities

agents watching agents evidence from pension fund ownership and firm value abstract this paper examines the valuation effects associated with the incentive structures of different types of institutional investors using the ownership levels of public and private pension funds in a firm the results suggest that institutional monitoring is associated with valuation effects when both observable and unobservable aspects of the relationship between institutions and firms are taken into account moreover the valuation effects vary according to the objective functions of institutions administrators thus other shareholders do not necessarily benefit from relationships between institutions and managers and they could be hurt when the institutional agents watching firm agents have conflicts of interest with other shareholders

market experience eliminates some anomalies and creates new ones we report two experiments which investigate whether experience of decision making in repeated markets purges behaviour of preference reversals we investigate two behavioural mechanisms that may be shaping bids in repeated auctions a tendency to adjust bids towards previously observed market prices and a tendency to reduce bids following bad market outcomes we find little support for the former but strong support for the latter also whilst just enough market exposure eliminates the typical preference reversal phenomenon continued exposure fosters the mirror image anomaly therefore although market experience shapes behaviour in our experiments it does not generally promote consistency with standard preference theory

an ecosystem service dominant logic integrating the ecosystem service approach and the service dominant logic abstract natural and business ecosystems are complex and dynamic service systems that interact through the utilization of ecosystem service offerings for human well being currently natural and business sciences have not developed a shared and common set of service based terms or concepts for discussing ecosystem service offerings in the process of value co creation in this study the ecosystem service approach was compared with marketing science s service dominant logic the terminology and concepts were harmonized and the two approaches were then integrated into a service dominant value creation svc framework the incorporation of natural ecosystems includes accounting for the flow of positive and negative impacts through associated value networks therefore the term value in impact was proposed to describe these value flows a case study of the global forest based sector was then presented demonstrating how to discuss current research challenges using the proposed framework in conclusion a shared service dominant approach provides an opportunity for deeper inter disciplinary discussion between natural and business sciences this study represents a contribution towards the development of a holistic service science that includes consideration for natural ecosystems the svc framework also addresses many of the multidimensional challenges noted by previous sustainability frameworks

signals or noise explaining the variation in recreation benefit estimates this paper uses meta analysis to summarize the benefit estimates derived from travel cost recreation demand models after reviewing approximately 200 published and unpublished studies prepared from 1970 to 1986 77 were found to report either consumer surplus estimates or sufficient information to derive them using these estimates of the consumer surplus per unit of use from each study it was possible to evaluate the influence of variables describing the site characteristics the activities undertaken at each site the behavioral assumptions and the specification decisions the findings provide clear support for using econometric methods to summarize results from diverse empirical studies they highlight the important research issues in model development and offer a consistency check to the procedures used in benefit transfer analyses for policy evaluations

meta analytic benefit transfer of outdoor recreation economic values testing out of sample convergent validity a benefit transfer approach to recreationeconomic valuation using meta analysis isexamined since the meta regression modeltakes into account some of the study specificeffects on willingness to pay wtp estimates benefit transfer using meta analysis couldyield a valid wtp estimate of unstudiedrecreation resources the convergent validityof the meta analytic benefit transfer is testedusing out of sample original studies from theu s the analyses are performed usingpercentage difference paired t test regression and correlation tests the testsreveal mixed results on convergence betweenestimated wtp using meta analytic benefittransfer function btf and out of sampleoriginal wtp values there is a fairly highpercentage difference between the estimated andoriginal wtp values 80 88 and the meandifferences are statistically significant asshown by paired t tests however correlationand regression results consistently showsignificant positive relationships betweennational btf estimated and original wtp valuesindicating some level of convergence theresults show that the national btf outperformthe regional btf indicating a potential of thenational btf for recreation benefit transferwhen a first best primary valuation study isnot affordable

the antidirector rights index revisited the antidirector rights index has been used as a measure of shareholder protection in over a hundred articles since it was introduced by la porta et al law and finance 1998 journal of political economy 106 1113 55 a thorough reexamination of the legal data however leads to corrections for thirty three of the forty six countries analyzed the correlation between corrected and original values is only 0 53 consequently many empirical results established using the original index may not be replicable with corrected values in particular the corrected index fails to support three widely influential claims that shareholder protection is higher in common than in civil law countries that shareholder protection predicts stock market size or ownership dispersion and that weak corporate governance explains the extent of exchange rate depreciation during the asian financial crisis of 1997 1998 the author 2009 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oxfordjournals org oxford university press

testing the rate of preference reversal in personal and social decision making classic preference reversal where choice and valuation procedures generate inconsistent preference orderings has rarely been tested in hypothetical health care treatment scenarios two studies the first non incentivised and the second incentivised are reported in this article in both studies respondents are asked to make decisions that affect themselves a personal decision making frame and those for whom they are responsible a social decision making frame the results show non negligible and systematic rates of preference reversal in both frames although these rates are slightly but non significantly lower in the incentivised condition moreover in both studies the rate of predicted preference reversal was somewhat higher in the social than in the personal decision making frame a finding that is explained by greater risk aversion when choosing treatment options for others than when choosing treatments for oneself

choices involving uncertain probabilities abstract this paper contains an analytic and empirical component the analytic one examines how people should value information on probabilities versus payoffs according to expected utility theory it also examines under what conditions various generalized utility models such as subjective expected utility theory prospect theory and rank dependent utility entail testable predictions for preference for information the empirical component examines people s actual information preferences and to what extent they fit the various models after describing two experiments and their findings it is concluded that generalized utility models are unlikely to offer much insight into risky decision making

testing different stochastic specificationsof risky choice the harless camerer hc hey orme ho and random preference rp models of stochastic variation in choice under uncertainty are compared implications of these models including some that are independent of the deterministic theory with which they are combined are tested in an experiment in which participants respond to decision problems twice the hc model generally performs poorly the ho model predicts more violations of dominance than are observed while the rp model fails to account for those few violations which do occur additional regularities are observed which are inconsistent with all three models when combined with expected utility theory

the common consequence effect testing a unified explanation of recent mixed evidence abstract the common consequence effect is perhaps the most investigated violation of expected utility theory and yet no single generalised expected utility model convincingly organises the experimental data this paper reports a test of a modified version of expected cardinality specific utility theory with boundary effects neilson w s 1992 economics letters 39 275 278 which can explain some recent mixed evidence without recourse to subjective probability weighting models the results do not convincingly support the boundary effect hypothesis and neither support the more usual probability weighting arguments but do indicate instability in preferences largely consistent with event splitting effects

environmental attitudes as wtp predictors a case study involving endangered species this paper investigates environmental attitudes as significant motives for the behavioral intention of willingness to pay wtp involving endangered species in a choice modeling context and examines the underlying causal mechanism pro environmental attitudes are measured using the new ecological paradigm nep scale although the empirical evidence of this paper supports a significant attitude wtp association the causal mechanism is different from previous theorizing when observed at the parameter level using random parameter logit models the significant causal linkages are evident with both the target good and the payment variable the findings of this paper not only support direct and indirect impacts of general attitudes on wtp but also provide novel findings about the causal mechanism for a significant attitude wtp relationship at the parameter level in a non western case study the impact of past visiting experience was also significant on the relationship undermining the impact of attitudes on wtp

alcohol and self control a field experiment in india this paper studies alcohol consumption among low income workers in india in a 3 week field experiment the majority of 229 cycle rickshaw drivers were willing to forgo substantial monetary payments in order to set incentives for themselves to remain sober thus exhibiting demand for commitment to sobriety randomly receiving sobriety incentives significantly reduced daytime drinking while leaving overall drinking unchanged i find no evidence of higher daytime sobriety significantly changing labor supply productivity or earnings in contrast increasing sobriety raised savings by 50 percent an effect that does not appear to be solely explained by changes in income net of alcohol expenditures

do investment banks matter for m a returns w e document a significant investment bank fixed effect in the announcement returns of m a deals the interquartile range of bank fixed effects is 1 26 compared with a fullsample average return of 0 72 the results remain significant after controlling for the component of returns attributable to the acquirer our findings suggest that investment banks matter for m a outcomes and contrast earlier studies that show no positive link between various measures of advisor quality and m a returns differences in average returns across banks are also persistent over time and predictable from prior performance clients do not chase past returns which may explain why persistence exists in m a performance while it is absent in mutual funds jel g24 g34 mer gers and acquisitions m a are among the most critical decisions a ceo can make successful mergers can create substantial synergies while misguided acquisitions can lead to misallocation of companies to parents unable to reap their full potential in addition to these large effects on shareholder value a bad acquisition also increases the ceo s risk of being fired lehn and zhao 2006 a prominent example is the departure of carly fiorina from hewlett packard which was widely attributed to her acquisition of compaq the quality of m a transactions is also of great importance to the economy as a whole the total value of m a announced by a u s acquirer in 2007 was 2 1 trillion around 15 of gdp

preference reversals without the independence axiom the preference reversal phenomenon was believed to be inconsistent with the transitivity axiom of decision theory however recent theoretical papers have demonstrated that the preference reversals that were observed in earlier experiments could be explained by subject violations of the independence axiom or the compound lottery axiom therefore those preference reversals are not known to be inconsistent with generalization of expected utility theory that replace the independence axiom the present paper reports the results of experiments in which a substantial proportion of subject responses violate the asymmetry axiom these results are inconsistent with expected utility theory and its generalizations copyright 1989 by american economic association

choice modeling and tests of benefit transfer choice modelling cm is a stated preference technique that is increasingly being used to generate estimates of non market values in cm applications respondents to a survey are presented with several sets of options which contain common attributes but at varying levels and are asked to select their preferred alternative from each set the information provided by respondents choices is used to estimate marginal rates of substitution and hence estimates of value in this paper the results from three separate cm applications are presented estimates are made of the value of improving the quality of wetlands the first two applications focused on the gwydir wetlands in new south wales australia one survey was conducted in sydney a major urban centre and the second was conducted in moree a rural centre close to the gwydir wetlands the third survey which was also conducted in sydney focused on the macquarie marshes another wetland in new south wales an objective of the study was to test the suitability of using cm derived estimates for benefit transfer both across different populations and across different wetlands cm is potentially suited to benefit transfer because it is possible to allow for differences in environmental improvements between sites as well as differences in socio economic characteristics between respondent populations several tests aimed at determining the validity of transfers using cm across sites and populations are presented these include tests of the equality of models implicit prices and estimates of compensating surplus

mortgage choice as a natural field experiment on choice under risk data on approximately 280 000 borrowers from the uk survey of mortgage lenders are used to model choices between variable and fixed rate mortgages the choice is assumed to depend on three factors risk attitude interest rate expectations and individual discount rate the ordered probit model is used for estimation while taking account of a number of econometric issues including missing counterfactuals selectivity and endogeneity a large number of strong effects are found including higher income borrowers are less risk averse and have a lower discount rate and risk aversion rises with the amount borrowed providing evidence of increasing relative risk aversion

moose hunting values in sweden now and two decades ago the swedish hunters revisited this paper is based on two national contingent valuation studies dealing with the extent and economic values of hunting in sweden the first valuation study was conducted in 1987 and the second in 2006 both the game resource and the hunter community have undergone changes in the two decades covered by the surveys an important purpose of the latter survey was to repeat relevant parts of the former one which created a rare opportunity to compare valuations covering a very long time span moose hunting value and its determinants were compared between the two studies showing that significant changes have taken place our analysis suggests caution in using results from old contingent valuation studies for e g benefits transfer exercises

benefits transfer of willingness to pay estimates and functions for health risk reductions a cross country study this paper provides a first application of the techniques of benefits transfer to the health economics literature these techniques seek to transfer the value of some good from one survey context to a new policy context so avoiding the need for new valuation surveys each time a new policy question arises two approaches to benefits transfer are assessed the simple transfer of mean values and the transferral of value functions we develop a new methodology for the latter approach in which value functions are iteratively built up from theoretical principles with transfer errors being tested each time a new variable is added through a novel application of advanced statistical tests we show that this approach outperforms the transferral of statistically driven best fit functions the case study presented focuses upon the transfer of contingent valuation cv willingness to pay wtp estimates and associated value functions for reducing the health risks associated with solar ultraviolet uv exposure common format studies are conducted in four countries with transfers between all of these being undertaken by calculating errors in predicted versus actual values across countries we show that when transferring between similar contexts simple mean value transfers outperform more complex value function transfers with the magnitude of the former errors being encouragingly small however this result is reversed when transfers are undertaken across dissimilar contexts where value functions partially adjust for these differences in summary these findings provide support and guidance for future applications

observing violations of transitivity by experimental methods the preference reversal phenomenon is usually interpreted as evidence of nontransitivity of preference but has also been explained as the result of the difference between individuals responses to choice and valuation problems the devices used by experimenters to elicit valuations and the random lottery selection incentive system this paper reports an experiment designed so that none of these factors could generate systematic nontransitivities yet systematic violations of transitivity were still found the pattern of violation was analogous with that found in previous preference reversal experiments and is consistent with regret theory copyright 1991 by the econometric society

further evidence of the impact of regret and disappointment in choice under uncertainty a preliminary experimental study of the relative impact of regret and disappointment on individual choice under uncert ainty is followed up and extended in various ways taken in conjuncti on with the earlier work the new results provide further evidence of the limitations of von neumann morgenstern expected utility theory a nd indicate the potential power of the alternative models discussed it is argued that there is sufficient weight of evidence to encourage further systematic investigation copyright 1988 by the london school of economics and political science

rational choice with status quo bias abstract motivated by the empirical findings concerning the importance of one s current situation on her choice behavior the main objective of this paper is to propose a rational choice theory that allows for the presence of a status quo bias and that incorporates the standard choice theory as a special case we follow a revealed preference approach and obtain two nested models of rational choice that allow phenomena like the status quo bias and the endowment effect and that are applicable in any choice situation to which the standard static choice model applies

understanding preference imprecision the term preference imprecision seems to have different meanings to different people in the literature one can find references to a number of expressions for example vagueness incompleteness randomness unsureness indecisiveness and thick indifference curves some of these are theoretical constructs some are empirical the purpose of this paper is to survey the various different approaches and to try to link them together to see if they are all addressed to the same issue and to come to some conclusions in the course of this survey we report on evidence concerning the existence of preference imprecision and its impact on theoretical and empirical work

measuring consumers willingness to pay at the point of purchase abstract economists psychologists and marketing researchers rely on measures of consumers willingness to pay wtp in estimating demand for private and public goods and in designing optimal price schedules existing market research techniques for measuring wtp differ in whether they provide an incentive to consumers to reveal their true wtp and in whether they simulate actual point of purchase contexts the authors present an empirical comparison of several procedures for eliciting wtp that are applicable directly at the point of purchase in particular the authors test the applicability of becker degroot and marschak s 1964 well known incentive compatible procedure for assessing the utility of lotteries to measuring consumers wtp in three studies the authors explore the reliability validity and feasibility of the procedure and show that it yields lower wtp estimates than do non incentive compatible methods such as open ended and double bounded contingent valuation they show experimentally t

testing new theories of choice under uncertainty using the common consequence effect a generalised common consequence problem is used to contrast the predictions of expected utility theory and several new theories of choice under uncertainty an experiment designed to test these predictions is reported systematic violations of expected utility theory are detected but although a consistent pattern emerges from the data it offers little support for any of the new theories the analysis is extended to test predictions which are unique to regret theory and significant regret effects are detected

indifference or indecisiveness choice theoretic foundations of incomplete preferences abstract a commonly held belief in economics is that an individual s preferences that are revealed by her choices must be complete this paper takes issue with this position by showing that one may be able to distinguish between indifference and indecisiveness of an agent upon observing her choice behavior we relax the standard weak axiom of revealed preferences warp and show that a potent theory of individual choice with and without risk can be founded on this weaker axiom when it is coupled with some other standard postulates the most notable features here are that an agent is allowed to be indifferent between certain alternatives and indecisive about others moreover an outside observer can identify which of these actually occur upon examining the observable choice behavior of the decision maker as an application we also show how our theory may be able to cope with the classical preference reversal phenomenon

the geography of equity listing why do companies list abroad this paper documents aggregate trends in the foreign listings of companies and analyzes their distinctive prelisting characteristics and postlisting performance in 1986 1997 many european companies listed abroad mainly on u s exchanges while the number of u s companies listed in europe decreased european companies that cross list tend to be large and recently privatized firms and expand their foreign sales after listing abroad they differ sharply depending on where they cross list the u s exchanges attract high tech and export oriented companies that expand rapidly without significant leveraging companies cross listing within europe do not grow unusually fast and increase their leverage after cross listing foreign listings are becoming an increasingly important strategic issue for companies and stock exchanges alike as companies become global in their product market and investment strategies direct access to foreign capital markets via an equity listing can yield important benefits at the same time the international integration of capital markets has led to unprecedented levels of competition among stock exchanges in this competitive struggle the winners are the exchanges that manage to attract more foreign listings and the attendant trading volume and business opportunities despite the importance of these issues still little is known about which exchanges succeed in capturing more listings from abroad and why this question is intimately related to a second issue namely which advantages companies expect to get from a foreign listing securing cheap equity capital for new investment allowing controlling shareholders to divest on a liquid market preparing for foreign acquisitions or simply enhancing the compa

the validity of environmental benefits transfer further empirical testing this paper provides further empirical evidence of the validity of environmental benefits transfer based on cv studies by expanding the analysis to include control factors which have not been accounted for in previous studies these factors refer to differences in respondent attitudes traditional population characteristics were taken into account but these variables do not explain why respondents from the same socio economic group may still hold different beliefs norms or values and hence have different attitudes and consequently state different wtp amounts the test results are mixed the function transfer approach is valid in one case but is rejected in the 3 other cases investigated in this paper we provide further evidence that in the case of statistically valid benefits transfer the function approach results in a more robust benefits transfer than the unit value approach we also show that the equality of coefficient estimates is a necessary but insufficient condition for valid benefit function transfer and discuss the implications for previous and future validity testing

valuing health impacts from air pollution in europe health impacts make up asignificant portion of the damage costs fromair pollution in lack of european valuationstudies on morbidity impacts cost benefitanalyses transport and energy externalitystudies and green accounting exercises ineurope have all used values from more than tenyear old us valuation studies results from anew contingent valuation study using animproved version of the survey design of themost transferred us morbidity study show thatrespiratory symptom days and asthma attacks arevalued lower in norway than in the us correction were made for differences inpurchase power between the two countries butthe us values are still expressed in 1986dollar values indicating that the differencebetween the two estimates could be even higher thus the practise of transferring us estimatesand only adjusting the values with the consumerprice index could lead to highly biased valuesin the norwegian case the difference betweenthe us and norwegian values can be explained byimproved cv survey and sample design differentpreferences in norway compared to the us anddifferent public health care systems we do notknow if we can generalise the results from thisnorwegian study to the rest of europe but thestudy clearly illustrates the uncertainty intransferring results from one country toanother

an institutional view of china s venture capital industry explaining the differences between china and the west abstract institutional theory argues that institutions in general and culture in particular shape the actions of firms and individuals in a number of subtle but substantive ways the theory has been used to explain a number of significant and substantive managerial differences found in different parts of the world to date the examination of venture capital outside the us and europe however has been rather limited institutional theory also suggests that there would be differences in how venture capital may operate in other parts of the world such as asia where the culture is substantially different from the west based on interviews with 36 venture capitalists in 24 venture capital firms investing in china this exploratory research finds that china s institutional environment creates a number of significant differences from the west the article discusses the impact of these findings on future research on asian venture capital theory development and the activities of venture capital professionals in that region

foreignness and exit over the life cycle of firms received wisdom indicates that owing to a liability of foreignness foreign firms exit with greater likelihood than do comparable domestic firms and that the difference attenuates as firms age and overcome the liability we posit that foreign firms are also intrinsically more volatile and footloose than domestic ones and that this leads to an increasing divergence between the exit rates of foreign and domestic firms empirically we find that the difference between exit rates of foreign firms and domestic firms increases with age as exit of foreign firms increases with age while that of purely domestic firms decreases exit rates of domestic based multinationals do not change significantly with age they are between those of foreign and purely domestic firms but are closer to the latter this suggests that the footlooseness observed for foreign firms is due to foreignness more than to multinationality

valuing environmental goods and services using benefit transfer the state of the art and science abstract the purpose of this special issue of ecological economics is to elucidate the state of the art and science of environmental benefit transfer and to assist in the design and reporting of future benefit estimation research compiling the insights of thirty two international experts from seven countries the special issue reviews the latest developments in transfer techniques as well as ongoing efforts to standardize and validate them taken together the papers in this special issue provide fresh answers to some long standing questions offer original research insights on state of the art issues and identify fruitful areas for future research this introductory paper provides background and context for the issues addressed by the contributing authors its purpose is to place the interdisciplinary thinking contained here in a comparative context highlighting the need for integration and collaboration to maintain the momentum that has propelled environmental benefit transfer into a widely used approach for estimating the economic value of environmental goods and services worldwide

developments in non expected utility theory the hunt for a descriptive theory of choice under risk this article reviews recent developments in the economic theory of individual decision making under risk since the 1950s it has been known that individual choices violate the standard model of expected utility in predictable ways considerable research effort has now been devoted to the project of developing a superior descriptive model following an overview of non expected utility theories which distinguishes between conventional and non conventional approaches the paper seeks to assess these alternative models in terms of empirical success using laboratory and field data and theoretical usefulness the closing sections reflect on some new directions emerging in this literature

how much does subnational region matter to foreign subsidiary performance evidence from fortune global 500 corporations investment in china what explains the heterogeneity of foreign subsidiary performance previous studies have emphasized the importance of industry corporate parent and home country effects on the variation of foreign subsidiary performance building on recent international business and economic geography research this study examines the extent to which subnational region effects can also explain such performance variation we empirically decompose the variance of the performance of fortune global 500 corporations subsidiaries in china during 1998 2006 results show that not only are subnational region effects statistically significant in explaining the variation of subsidiary performance but their interactions with industry corporate parent and home country effects are also significant and economically important we further show that subnational region effects tend to be stronger in the period prior to china s wto accession and in the country s less developed subnational regions our findings highlight the importance of considering both the direct and indirect roles of subnational region in shaping firms strategy and performance in international business research

choice under uncertainty problems solved and unsolved ffifteen years ago the theory of choice under uncertainty could be considered one of the success stories of economic analysis it rested on solid axiomatic foundations it had seen important breakthroughs in the analytics of risk risk aversion and their applications to economic issues and it stood ready to provide the theoretical underpinnings for the newly emerging information revolution in economics 1 today choice under uncertainty is a field in flux the standard theory is being challenged on several grounds from both within and outside economics the nature of these challenges and of our profession s responses to them is the topic of this paper

intra experimental income effects and risk aversion abstract harrison s 1986 modification of the bekker degroot and marshak 1964 mechanism for eliciting risk preferences is employed to test the hypotheses of expected utility theory with respect to changes in income increasing relative risk aversion and decreasing absolute risk aversion subjects in the laboratory are shown to exhibit such behavior

legal framework quality and success of different types of venture capital investments abstract drawing on an analysis of 8 270 companies from 41 countries i explore the relationship between success of venture capital investments and legal frameworks in the investment countries legal framework quality is related to success but the effect varies with the deal type first the significant and positive relationship between legal framework quality and success is more pronounced for domestic deals than for international deals further investigations suggest that international venture capitalists often exit their portfolio companies abroad particularly when these companies are located in countries with inefficient legal frameworks in addition the results lend support to the view that international venture capitalists have a greater experience and reputation second legal framework quality seems to be more important for success in syndicated than in standalone deals this finding supports the view that a sound legal framework may improve the benefit cost balance of syndication while an inefficient legal framework may tend to increase costs in syndicated deals

incentives in experiments a theoretical analysis experimental economists currently lack a convention for how to pay subjects in experiments with multiple tasks we provide a theoretical framework for analyzing this question assuming statewise mo

an evaluation of monetary and non monetary techniques for assessing the importance of biodiversity and ecosystem services to people in countries with developing economies abstract biodiversity supports a range of ecosystems services that are of fundamental importance to people in poor countries economic valuation of biodiversity is important for the development of policies that protect biodiversity and alleviate poverty this paper provides an evaluation of monetary and non monetary techniques for assessing the value of biodiversity to people in least developed countries ldcs specifically research questions include 1 to what extent have monetary and non monetary techniques been used to assess the value of biodiversity and ecosystem services in ldcs 2 what are the key methodological practical epistemological and policy challenges to assessing the value of biodiversity and ecosystem services in ldcs 3 how can valuation methods be improved to allow more accurate valuation in ldcs

does legal enforcement affect financial transactions the contractual channel in private equity analyzing 210 developing country private equity investments we find that transactions vary with nations legal enforcement whether measured directly or through legal origin investments in high enforcement and common law nations often use convertible preferred stock with covenants in low enforcement and civil law nations private equity groups tend to use common stock and debt and rely on equity and board control transactions in high enforcement countries have higher valuations and returns while relying on ownership rather than contractual provisions may help to alleviate legal enforcement problems these results suggest that private solutions are only a partial remedy

using the delphi method to value protection of the amazon rainforest abstract valuing global environmental public goods can serve to mobilize international resources for their protection while stated preference valuation methods have been applied extensively to public goods valuation in individual countries applications to global public goods with surveys in multiple countries are scarce due to complex and costly implementation benefit transfer is effectively infeasible when there are few existing studies valuing similar goods the delphi method which relies on expert opinion offers a third alternative we explore this method for estimating the value of protecting the amazon rainforest by asking more than 200 environmental valuation experts from 37 countries on four continents to predict the outcome of a contingent valuation survey to elicit willingness to pay wtp for amazon forest protection by their own countries populations the average annual per household values of avoiding a 30 forest loss in the amazon by 2050 assessed by experts vary from a few dollars in low income asian countries to a high near 100 in canada germany and norway the elasticity with respect to average ppp adjusted per household incomes is close to unity results from the delphi study match remarkably well those from a recent population stated preference survey in canada and the united states using a similar valuation scenario

preference reversals for ambiguity aversion this paper finds preference reversals in measurements of ambiguity aversion even if psychological and informational circumstances are kept constant the reversals are of a fundamentally different nature than the reversals found before because they cannot be explained by context dependent weightings of attributes we offer an explanation based on sugden s random reference theory with different elicitation methods generating different random reference points then measurements of ambiguity aversion that use willingness to pay are confounded by loss aversion and hence overestimate ambiguity aversion this paper was accepted by teck ho decision analysis

examining risk preferences under high monetary incentives experimental evidence from the people s republic of china several experimental sessions were conducted to elicit certainty equivalents for a sequence of lotteries involving real monetary outcomes the opportunity to conduct sessions in the people s republic of china afforded the ability to offer very large monetary incentives relative to subjects living costs in the highest payoff condition subjects earned three times their normal monthly revenue in the course of a two hour experiment results indicate a statistically significant impact of the level of monetary incentives on revealed risk preferences however even under extreme monetary incentives subjects demanded amounts well in excess of expected value for low probability gain prospects copyright 1992 by american economic association

benefit transfer via preference calibration prudential algebra for policy this paper proposes a new approach to benefit transfer the method assumes a specific form for preferences and uses available benefit information to identify and calibrate the preference parameters to match the existing benefit estimates this approach assures economic consistency of the transfers benefit measures can never be inconsistent with household income the logic also offers a series of potentially observable predictions that can be used to gauge the plausibility of benefit transfers when multiple benefit estimates from different methods are available such as hedonic property value travel cost demand and contingent valuation the framework uses the definition of the benefit concept from each method in a single preference function to reconcile differences it provides a specific way to take account of baseline conditions and scope effects i e the size of the proposed change consistently in the transfer the method is illustrated using estimates for benefit measure changes in water quality from three studies travel cost demand hedonic property value and contingent valuation analysis q26

prospect theory and energy efficiency abstract investments in energy efficiency entail uncertainty and when faced with uncertainty consumers have been shown to behave according to prospect theory preferences are reference dependent and exhibit loss aversion and probabilities are subjectively weighted using data from a choice experiment eliciting prospect theory parameters i provide evidence that loss averse people are less likely to invest in energy efficiency then i consider policy design under prospect theory when there are also externalities from energy use a higher degree of loss aversion implies a higher subsidy to energy efficiency numerical simulations suggest that the impact of prospect theory on policy may be substantial

lessons from a behavioral economics success story comment on theory and experiment what are the questions among the many challenges that smith forthcoming details one that stands out is that theory and experiments face an incompatibility in the following sense theorists propose models which implicitly assume that the situation being modeled is divorced from everything else the individual might encounter either in the past or in the future in essence when they describe the game they preclude consideration of anything outside of the rules experimentalists on the other hand cannot make this implicit assumption while they have taken great pains to construct experiments that reflect as closely as possible the games described by theorists and often these experimental procedures are exceedingly clever they cannot remove subjects pasts or futures consequently economic experiments can never test only the theory they are designed to test instead they must test the theory in conjunction with all of the social cultural and historical baggage that subjects bring with them smith of course is right and his paper provides a call for new research to address this problem there are several directions that this researchmight go one is for experimental economists to somehow refine their procedures to isolate the laboratory from the outside world this after all is the technique used in the natural sciences but one can questionwhether this can ever be achieved for the social sciences an alternative direction is for theorists to write models that do not isolate rational actors from the rest of the world where the first direction lets theorists hold fast and expect experimentalists to adjust the second direction does the opposite something between these two is probably the right answer and indeed such a coordinated approach in which theorists address newmodeling questions and experimentalists change their approach to testing theoretical models was successful in a different part of economics the study of behavior toward risk my purpose here is to drawon the lessons from this successful research agenda and use them to develop a newdirection for experimental work on games

payoff dominance vs cognitive transparency in decision making i introduction there is a general question about how well laboratory markets work in eliciting true preferences given the low opportunity costs of making errors as in harrison 1989 vernon smith 1982 set out a series of conditions that must be adhered to if a laboratory market investigation is to provide insight into economic behavior in naturally occurring markets the opportunity cost question posed above is covered under smith s payoff dominance and reward saliency precepts for laboratory market experiments if the experimental setting is to elicit true preferences from the subjects the monetary payoffs in the experiment must be salient and dominate potential extraneous influences on subject behavior this paper reports on three series of experiments which employ the becker degroot marshak bdm mechanism to investigate the interaction between payoff dominance reward saliency and cognitive effort in the decision task the bdm mechanism is well suited to this task because it involves only individual choice is theoretically incentive compatible and offers a high degree of experimenter control over payoffs initial information and feedback on the results of decisions becker degroot and marschak 1964 introduced the following preference elicitation mechanism individuals state the most they would be willing to pay wtp 1 for a good then a random price is drawn from a distribution known to the individuals if the stated value is greater than or equal to the random price the individual buys the good at the randomly determined price otherwise the individual does not buy the good the bdm bidding mechanism can be shown to be incentive compatible the intuition is straightforward it is not in the individual s interest to understate true wtp if the random buying price falls between the stated wtp and the true wtp the individual has foregone a beneficial trade it is also not in an individual s interest to overstate true wtp if the random buying price is greater than the true value but less than the stated value the individual will be required to buy the good at a price greater than true wtp a more formal proof is easy to construct 2 let v the true value of one unit of the auction good b the bid submitted to purchase one unit of the good r the price randomly determined to be paid if the good is purchased p r probability that price r is randomly selected y sup o initial income u y utility a function of money income and the value of the good and e initial monetary balance provided in an experiment in the wtp version of the bdm auction the good is purchased if b greater than or equal to r with the subject paying only r and not purchased if b less than r in experiments using the bdm the subject cannot bid more than the experimental balance e so it must be that v less than e if the experiment is to be demand revealing assuming that subjects maximize expected utility they will submit bid b that maximizes eu integral of p r u y sup o e v r dr between limits b and 0 integral of p r u y sup o e dr between limits e and b the first integral describes the expected payoff for random prices r below the bid b and the second integral describes the expected payoff for random prices between the bid b and the maximum possible bid as limited by the balance e the maximum over b occurs when the derivative of eu with respect to b is zero in other words when deu db p b u y e v b u y e 0 so long as p b greater than 0 i e there is some probability the offered bid will be the price the above implies that the maximum occurs when b v in other words it is individually optimal to submit a bid b equal to one s true value v for the commodity although the bdm is incentive compatible in theory it is an empirical question whether it has this property in practice

does realism matter in contingent valuation surveys the importance of stressing the realism or policy relevance of a contingent valuation cv survey is commonly recognized by cv researchers this paper focuses on the relationship between the probability that a subject s response will result in real consequences and the subject s accurate reporting of willingness to pay results from experiments support the argument that efforts to make contingent valuation surveys real are important however our results also suggest that the connection between the survey and the likelihood of a payment must be rather powerful before surveys generate accurate reporting of willingness to pay for a public good

from the editors endogeneity in international business research this essay builds on the exposition by thomas et al and focuses on analyzing cause and effect in international business research we attempt to explain how endogeneity problems occur and why they are so prevalent in international business research in a non technical fashion we then discuss the importance of explicitly identifying how the chosen research design best approximates a randomized controlled experiment finally we provide some guidelines on achieving this goal and emphasize the practices that seem most relevant to jibs reviewers in evaluating high quality international business research

inferring attribute non attendance from discrete choice experiments implications for benefit transfer typical convergent validity tests of benefit transfer based on stated preference data assume that willingness to pay wtp estimates have been accurately measured and that differences in wtp arise from differences in observable and unobservable characteristics between the study and the policy sites in this paper we conduct a convergent validity test assuming equality of underlying preferences but allow for the possibility that transfer errors arise from differences in the way that respondents process information in the preference elicitation tasks using data from an identical survey instrument applied to the population of two river basins in spain we obtain marginal and total wtp estimates for ecological improvements of water bodies and the corresponding transfer errors across sites results of equality constrained latent class eclc models that infer attribute non attendance an a are compared to results from mixed logit mxl models in wtp space we find large absolute and relative differences in marginal and total wtp between sites for the mxl models and significantly reduced transfer errors for the eclc models this paper therefore provides further evidence that an a can significantly affect environmental values derived from attribute based stated preference methods and is the first to investigate the implications for benefit transfer

ordering effects in contingent valuation surveys this paper focuses on ordering effects in cvm surveys how the expressed value of a particular good valued in a sequence of several goods depends on where in the sequence the good is valued we use data from a norwegian cvm survey focusing on wtp for a 50 reduction in air pollution from car traffic to test for the existence of ordering effects and to apply a test for internal consistency we found considerable and significant ordering effects in our data but were not able to reject the hypothesis of internal consistency based on our survey we argue that ordering effects may be a result of rational choice these effects are problematic if a sequential valuation procedure is applied to a simultaneous problem and or the respondents are given imperfect information about the decision problem