Choice Experiment Method Research Articles

Investigating household preferences for kerbside recycling services in London: A choice experiment approach

Recent developments in national and European Union waste management policy have prompted considerable interest in alternative waste management programs, such as recycling, which could divert a portion of the municipal solid waste stream from landfills. This paper examines household preferences for kerbside recycling services and uses a stated preference choice experiment method to estimate households’ valuation of such services. Using a sample of 188 households in the London area, the empirical analysis yields estimates of the willingness to pay for the number of ‘dry’ materials collected, the collection of compost, textile collection and the frequency of collection.

Land-use planning and public preferences: What can we learn from choice experiment method?

In this article we discuss the economic approach to evaluate landscape preferences for land-use planning. We then use the choice experiment method to examine public preferences for three landscape features – hedgerows, farm buildings and scrubland – in the Monts d’Arrée region (in Brittany, France), in the context of re-design of landscape conservation policy by the local environmental institute. Surveys were undertaken on two user groups, visitors and local residents. Our objective was to obtain empirical evidence of the difference between the preferences of tourists and residents, for landscape attributes. We then analysed the welfare changes of tourists and residents affected by different landscape programmes. Our results point out the strong divergence between the landscape preferences of the public and those of local public actors. The comparison of the estimated values of willingness to pay for single-attribute landscaping action shows some divergence between residents’ and tourists’ ranking of preferences for agricultural landscape areas. Finally, we find, at least for the socio-economic context examined in this study, that apart from its social, cultural and aesthetic values, rural landscape has economic values, and that agricultural landscape preservation tends to be more beneficial to low-income social groups.

Valuing enhancements to forest recreation using choice experiment and contingent behaviour methods

This research utilises two valuation techniques (a frequency-based choice experiment model and a contingent behaviour model) to value a range of improvements to recreational facilities in forest and woodlands in Great Britain. We provide the first comparison in the literature of welfare results from these two approaches. Four groups of forest users are targeted in this research: cyclists, horse riders, nature watchers and general forest visitors, and look also at “sub-groupings” within these classes of forest user. We found that heterogeneity of preferences exists within each of these groups. In particular, more specialist forest user groups attain generally higher values for improvements than general users. For example, downhill mountain bikers were willing to pay more for the provision of dedicated downhill courses than family cyclists for easy cycle trails. It is also argued that the use of a frequency-based choice task in the choice experiment has advantages over the more traditional choice tasks for applications such as forest recreation since a frequency-based task better reflects actual behaviour and encourages respondents to pay closer attention to the “distance travelled” attribute.

Using choice experiments to design wetland management programmes: The case of Severn Estuary Wetland, UK

This paper reports the results of a pilot valuation study, which was undertaken to investigate whether the public located around the Severn Estuary derive positive economic values from its sustainable management. One hundred members of the public took part in a choice experiment, the results of which indicate that overall the public derives positive and significant values from sustainable management of this wetland, however, there is some preference heterogeneity. The findings demonstrate that the choice experiment method is a promising tool, which can aid the design of socially optimal policies for sustainable management of the Severn Estuary, with possible implications for other similar wetlands in the UK.

Testing Choice Experiment for Benefit Transfer with Preference Heterogeneity

Benefit transfer is a cost‐effective method for estimating the value of environmental goods that relies on information obtained in previous studies. The multiattribute approach of choice experiments should provide advantages in terms of benefit transfer, allowing differences in environmental improvements between sites as well as differences in socioeconomic and attitude characteristics between respondent populations. This article investigates the capability of choice experiment method to be used in environmental benefit transfer when a random parameters approach is used to allow for preference heterogeneity: we find that the inclusion of respondents' taste heterogeneity reduces the magnitude of the transfer error.

La méthode des choix multi-attributs appliquée aux Monts d'Arrée

Rural areas produce landscape amenities that improve users’ welfare. Because people’s demand for such amenities is growing, public decision makers have to deal with it. Knowing the benefits of landscape changes is useful for decision makers in order to help them in their decision process. Economic valuation of landscape changes is implemented in this article with the choice experiment method. This technique asks respondents what they prefer between different hypothetical landscape scenarios, each of them illustrating the landscape that would be if a particular political measure is taken. We apply this approach to the Monts d’Arrée landscape in Finistère where landscape changes are particularly interesting and decision makers have to take into account such landscape issues in their debate. The economic model used gives the implicit prices of the landscape attributes of the study. From them, it calculates the consumer surplus derived from different landscape hypothetical programs since a landscape measure usually deals with more than one attribute.

Recombinant Erythropoietin for Chemotherapy-Related Anaemia

To assess both the health-related quality of life (HR-QOL) and the economic value of erythropoietin treatment in chemotherapy-related anaemia using direct utility elicitation and discrete choice experiment (DCE) methods from a societal perspective in the UK. The time trade-off (TTO) method was employed to obtain utility values suitable for the calculation of QALYs for no, mild, moderate and severe anaemia. Health-state descriptions were developed using the Functional Assessment of Cancer Therapy - Anaemia (FACT-AN) subscale and the EQ-5D questionnaires, and were validated by clinical experts and patients. In addition, a DCE was implemented to elicit preferences for various anaemia treatment scenarios. The DCE analysis comprised important aspects of treatment identified from a literature review and by consultation with expert clinicians and cancer patients. The DCE included cost as an attribute in order to elicit willingness-to-pay (WTP) values (pound, 2004 values). The two methods were applied in the same cross-sectional sample of 110 lay people. Face-to-face interviews were conducted between February and March 2004. The mean utility scores were 0.86 (standard error [SE] 0.014) for the no-anaemia state, and 0.78 (SE 0.016), 0.61 (SE 0.020) and 0.48 (SE 0.020) for the mild, moderate and severe anaemia states, respectively. The DCE results revealed the following preferences as significant predictors of choice: higher level of relief from fatigue, lower duration of administration, subcutaneous/intravenous administration versus cannula injection, GP versus hospital location, lower risk of infection or allergic reactions and lower cost per month to the patient. Attribute levels were valued higher for recombinant erythropoietin than for blood transfusion; this is reflected in an incremental welfare value of 368 pounds (95% CI 318, 419). The results highlight a societal view that the severity of chemotherapy-related anaemia will significantly affect cancer patients' HR-QOL. The DCE survey shows that the public value favourably the attributes of treatment with recombinant erythropoietin, and indicates a likely patient preference for treatment with recombinant erythropoietin over blood transfusion.

AN APPLICATION OF THE EXPERIMENTAL CHOICE MODEL TO ESTIMATE PREFERENCES FOR OUTDOOR RECREATION ATTRIBUTES IN TAMAN NEGARA MALAYSIA NATIONAL PARK

The main objective of the study is to explore the applicability of the choice experiment method to reveal preferences of visitors. The preferences are related to the attributes of eco-tourism resources in Taman Negara Malaysia. Four alternative sets of combinations of attributes which included types of accommodation, congestion levels, permitted length of stay per permit and entrance fees are given to visitors to choose. The results of the analysis on the probability of choice function reveal that types of accommodation, indicated by differences in room rates, and congestion levels are the two significant factors influencing visitors preferences for the eco-tourism resources. The choice of types of accommodation facilities can be implied to the preferences for quality services and facilities. On the other hand, the congestion level is associated with lower entrance fee and costs of visits.

Estimating the public preferences for solid waste management programmes using choice experiments in Macao

This paper reports on the potential to apply the choice experiment method to understand the public's preferences for solid waste management programmes in Macao. A random sample survey of 260 respondents in Macao was conducted during the summer in 2004. The survey data was analysed using conditional multinomial logit models. The study results indicate that Macao residents prefer: (1) waste segregation and recycling at source; (2) noise reduction during waste collection and transportation and (3) lower garbage fees. The study concludes that choice experiment is a reliable tool in the analysis of respondents' preferences for developing a suitable solid waste management programme in Macao.

Using a Choice Experiment to Estimate Farmers’ Valuation of Agrobiodiversity on Hungarian Small Farms

Agrobiodiversity is a crucial environmental resource. Much of the agrobiodiversity remaining in situ today is found on the semi-subsistence farms of poorer countries and the small-scale farms or home gardens of more industrialised nations. The traditional farms of Hungary are an example. Labelled “home gardens” as a reflection of their institutional identity during the collectivisation period, they are micro-agroecosystems that provide important functions such as food security and diet quality. This paper applies the choice experiment method to estimate the private benefits farmers derive from four components of the agrobiodiversity found in Hungarian home gardens: richness of crop varieties and fruit trees; crop landraces; integrated crop and livestock production; and soil micro-organism diversity. The analysis is based on primary data collected in three environmentally sensitive areas where pilot agri-environmental programmes have been initiated as part of the Hungarian National Rural Development Plan. Findings demonstrate variation in the private values of home gardens and their attributes across households and regions, contributing to understanding the potential role of home gardens in these agri-environmental schemes. This study has implications for sustaining agrobiodiversity in transitional economies.

The effect of medical experience on the economic evaluation of health policies. A discrete choice experiment

In this paper we present results on the effect of medical experience on the economic evaluation of health policies utilizing the method of discrete choice experiments. Subjects in two split samples were asked about choice situations involving alternative profiles defined by the attributes of an innovative program for cervical cancer screening. The first sample was formed by expert medical practitioners who were familiar with the illness and its potential treatments. A second sample was formed by young undergraduate students in social sciences who were not familiar with the illness or with the potential benefits of screening programmes. The statistical comparison between both subsamples utilizes a robust method for discrete choice models which shows that there are no significant differences in the structural models and the parameter estimates. The main implication is that background medical information and familiarity with the process of illness might not have a relevant impact on the valuation of health policies with discrete choice experiments.

Forest owners’ acceptance of incentive based policy instruments in forest biodiversity conservation – a choice experiment based approach

Finland has launched a new policy programme (METSO) to enhance conservation of forest biodiversity. In non-industrial private forests, the policy is based on economic incentives and voluntarism on the part of forest owners. While biodiversity conservation is the main target of the policy, social acceptability is considered to be of great importance. This study examined the factors that affect the acceptability of biodiversity conservation contracts among private forest owners, and the amount of compensation needed to keep the forest owners at least as well off as before the contract. Choice experiment method was used to analyse the data that were collected by surveying 3000 Finnish private forest owners. Analysing separately those respondents who were willing to enter into a conservation contract allowed an assessment of the impact of forest owners’ heterogeneity on compensation amount. The results show how the welfare of forest owners shifts when the contract terms are changed. In a base scenario the forest owner was assumed to be the initiator of the contract that would require only small patches of forest to be protected, and would also bind new forest owners over its duration of ten years. For all respondents, the average demand for compensation would be around 224 euros annually. When those always choosing the “no additional conservation” alternative were excluded, the average welfare impact of the base scenario was positive.

Forest owners' acceptance of incentive based policy instruments in forest biodiversity conservation : a choice experiment based approach

Finland has launched a new policy programme (METSO) to enhance conservation of forest biodiversity. In non-industrial private forests, the policy is based on economic incentives and voluntarism on the part of forest owners. While biodiversity conservation is the main target of the policy, social acceptability is considered to be of great importance. This study examined the factors that affect the acceptability of biodiversity conservation contracts among private forest owners, and the amount of compensation needed to keep the forest owners at least as well off as before the contract. Choice experiment method was used to analyse the data that were collected by surveying 3000 Finnish private forest owners. Analysing separately those respondents who were willing to enter into a conservation contract allowed an assessment of the impact of forest owners’ heterogeneity on compensation amount. The results show how the welfare of forest owners shifts when the contract terms are changed. In a base scenario the forest owner was assumed to be the initiator of the contract that would require only small patches of forest to be protected, and would also bind new forest owners over its duration of ten years. For all respondents, the average demand for compensation would be around 224 euros annually. When those always choosing the “no additional conservation” alternative were excluded, the average welfare impact of the base scenario was positive.

Analysing the social benefits of soil conservation measures using stated preference methods

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

Valuing the diversity of biodiversity

Policy makers have responded to concerns over declining levels of biodiversity by introducing a range of policy measures including agri-environment and wildlife management schemes. Costs for such measures are relatively easy to establish, but benefits are less easily estimated. Economics can help guide the design of biodiversity policy by eliciting public preferences on different attributes of biodiversity. However, this is complicated by the generally low level of awareness and understanding of what biodiversity means on the part of the general public. In this paper we report research that applied the choice experiment and contingent valuation methods to value the diversity of biological diversity. Focus groups were used to identify ecological concepts of biodiversity that were important and relevant to the public, and to discover how best to describe these concepts in a meaningful and understandable manner. A choice experiment examined a range of biodiversity attributes including familiarity of species, species rarity, habitat, and ecosystem processes, while a contingent valuation study examined public willingness to pay for biodiversity enhancements associated with agri-environmental and habitat re-creation policy. The key conclusions drawn from the valuation studies were that the public has positive valuation preferences for most, but not all, aspects of biodiversity, but that they appeared to be largely indifferent to how biodiversity protection was achieved. Finally, we also investigate the extent to which valuation workshop approaches to data collection can overcome some of the possible information problems associated with the valuation of complex goods. The key conclusion was that the additional opportunities for information exchange and group discussion in the workshops helped to reduce the variability of value estimates.

Estimating the economic value of improvements in river ecology using choice experiments: an application to the water framework directive

The Water Framework Directive is a major regulatory reform of water resources management within the European Union. Integrated catchment management plans must be prepared for all river basins, in order to achieve ‘good ecological status’ in all EU waters. Ecological status is a broader measure of water quality than the chemical and biological measures that were previously dominant. The Directive calls for a consideration of the economic costs and benefits of improvements to ecological status. In this paper, we use the choice experiment method to estimate the value of improvements in three components of ecological status. Given the high resource cost of valuation studies, benefits transfer methods will be needed in implementing the Directive. We thus also test the ability of choice experiments for benefits transfer across two very similar rivers in the UK.

A New Approach to Eliciting Patients' Preferences for Palliative Day Care: The Choice Experiment Method

Palliative day care (PDC) provides individualized care to meet patients' needs and preferences and has posed problems for economic evaluation. Current methods are limited in their ability to capture relevant outcomes. The choice experiment elicits preferences for multiple aspects of care rather than a single outcome. A choice experiment was undertaken at four centers in England. A random effects probit model was used. Interaction terms relating to patient and service characteristics were explored. Seventy-nine patients participated. All characteristics of PDC except bathing and hairdressing were significant ( P < 0.001). Access to specialist therapies was three times as important as medical support and twice as important as staying all day. Interaction terms were not significant, except for age and preference for specialist therapies, although the sample may not have been adequate to detect differences. Choice experiments provided useful insights by quantifying preferences for services, providing an alternative to cost-effectiveness analysis.

Designing Policy for Reducing the Off-farm Effects of Soil Erosion Using Choice Experiments

Soil erosion produces both on-site private costs and off-site social costs, such as desertification, rural depopulation, siltation of waterways and reductions in biodiversity. To design efficient policies, land use planners and decision makers need information on the relative weights of changes in these consequences, since policy alternatives, such as different management restrictions, will have varying impacts on these consequences of erosion. The research presented here uses the choice experiment method to evaluate these relative weights, using a case study in the Alto Genil and Guadajoz watersheds in southern Spain. We find that reductions in desertification, protection of water quality, protection of biodiversity, the area covered by the scheme, and the number of rural jobs safeguarded are all significant determinants of preferences over alternative policy designs.

Price vector effects in choice experiments: an empirical test

This paper investigates whether the preference and willingness-to-pay estimates obtained from the choice experiment method of estimating non-market values are sensitive to the vector of prices used in the experimental design. We undertake this test in the context of water quality improvements under the European Union's new Water Framework Directive. Using a mixed logit model, which allows for differing scale between the two samples, we find no significant impact of changing the price vector on estimates of preferences or willingness-to-pay.

An estimation of the social costs of landfill siting using a choice experiment

The paper by Sasao on using a choice experiment (CE) to incorporate social costs in siting a landfill is a good step forward in siting landfills and other waste handling facilities in a more socially responsible manner. However, Sasao’s method, which is well-established in the economics literature, has a number of underlying assumptions that practioners must be careful to consider in applying the approach. The focus of this discussion is on three issues: (1) the form of utility function used, (2) the perceptions of the survey questions by the respondents versus the intended perception, and (3) the application of the results to situations beyond the assessed situations. This discussion article urges practitioners to carefully check their implementation of a choice experiment method to make sure the elicited values correctly represent those of the community. This discussion should not be construed as suggesting that the approach or results of Sasao (2004) are incorrect. Instead this discussion is meant to elaborate on the ideas and approach presented by Sasao with the hope that the approach will be applied more widely.