Determinants Of Willingness To Pay Research Articles

Are consumers at the base of the pyramid willing to pay for nutritious foods?

Base of the Pyramid (BoP) consumers living in the urban informal settlements of developing countries spend over 60% of their income on food, yet malnutrition and micronutrient deficiency remain widespread among these populations, pointing to the inadequacy of the foods they consume in terms of quality and quantity. In this paper we examine BoP consumers’ willingness to pay (WTP) for nutritious multi-composite porridge flour (improved flour) in the informal settlements of East Africa. The analysis is based on experimental data collected from 600 households in the informal settlements of Kampala, Uganda and Nairobi, Kenya (300 in each country) in 2016. We use Tobit regression models to analyse determinants of WTP for the improved porridge flour. Results show that both Kenyan and Ugandan BoP consumers are willing to pay a premium for the improved porridge flour. In addition, providing nutrition information about the flour, characteristics of household head, economic status of the household, and presence of young children between six and 59 months in the household, influence WTP for the safe and nutritious porridge flour. The paper concludes by providing recommendations for enhancing nutrition among poor consumers in the informal settlements of developing countries.

Does the economic benefit of biodiversity enhancement exceed the cost of conservation in planted forests?

This study evaluates a proposed programme that would sustain and enhance the provision of ecosystem services in planted forests. We focused on the evaluation of the benefits and costs of the conservation of the New Zealand brown kiwi, an iconic yet threatened bird species that inhabits planted forests. Yao et al. (2014) found that a sample of 209 New Zealand (NZ) households would, on average, financially support a brown kiwi conservation programme in planted forests. We extend that study using a proof of concept that integrates economic, ecological and spatial approaches. We undertake this in five steps: 1) supplementing a previous discrete choice experiment survey by interviewing more than 900 additional georeferenced households; 2) estimating household-specific means of marginal willingness-to-pay (WTP) values; 3) using econometrics and geospatial approaches to explore WTP determinants; 4) identifying 12 ecologically and economically feasible ecosystem-service sites and calculate the costs of a conservation programme at each site; and 5) aggregating the public benefits of biodiversity at the regional and national levels and calculate the cost-benefit ratio. We found that the value of the proposed biodiversity conservation initiative at the national level can be more than 100 times higher than the overall cost of the programme.

Willingness to Pay for Cataract Surgeries Among Patients Visiting Eye Care Facilities in Dhaka, Bangladesh.

Cataract is the leading cause of avoidable blindness globally. It is estimated that 89% of people with visual impairment live in low- and middle-income countries where the cost of cataract surgery represents a major barrier for accessing these services. Developing self-sustaining healthcare programs to cater the unmet demands warrants a better understanding of patients' willingness to pay (WTP) for their services. Using a sample of patients visiting eye care facilities in Dhaka, Bangladesh, we estimate WTP for two different cataract extraction techniques, namely small incision cataract surgery (SICS) and phacoemulsification. We used contingent valuation (CV) approach and elicited WTP through double-bounded dichotomous choice experiments. We interviewed 556 randomly selected patients (283 for SICS and 273 for phacoemulsification) from five different eye care hospitals of Dhaka. In this paper, we estimated the mean and marginal WTP using interval regression models. We also compared the estimated WTP and stated demand for cataract surgeries against the prevailing market prices of SICS and phacoemulsification. We found the mean WTP of BDT 7579 (US$93) for SICS and BDT 10,208 (US$126) for phacoemulsification are equivalent to 12 and 16days of household income, respectively. Household income and assets appeared as the major determinants of WTP for cataract surgeries. However, we did not find any significant association with gender, occupation, and household size among other socioeconomic characteristics. Comparisons between market prices and average WTP suggest it is possible to have a viable market for SICS, but a subsidy-based model for phacoemulsification will be financially challenging because of low WTP and high costs. Our findings suggest lower-cost SICS can potentially provide patients access to surgeries to treat cataract conditions. Moreover, price discrimination and cross-subsidization could be a viable strategy to increase the service-uptake as well as ensure financial sustainability.

Valor de la restauración de ríos cuando se vive cerca y lejos. La Cuenca de Atoyac en Puebla, México

On analysing data from a Contingent Valuation (CV) survey to restore the Atoyac River Basin in Puebla, Mexico, we found that households obtain differentiated benefits due to their condition of closeness to or distance from the river, which are in turn often associated with conditions of vulnerability to water pollution and poverty. Our approach was to estimate Willingness to Pay (WTP) for restoration of the Atoyac River that crosses the Puebla State, using models for two population groups: those residing nearby and those living farther away. As expected, the bid offered and the household’s income are significant determinants of WTP; however, the remainder of the variables change, denoting that poor people are more concerned about river pollution.

Knowledge, attitudes, and practices about homelessness and willingness-to-pay for housing-first across 8 European countries: a survey protocol

BackgroundMost European countries report rising numbers of people experiencing homelessness. For those with mental disorders, interventions are centered on achieving mental health and drug rehabilitation alongside housing readiness, often to the detriment of access to housing. Notwithstanding, more European countries are investing in a new model, Housing First (HF), which postulates immediate access to permanent housing with no initial requirements for treatment. While results of the European HF programs are published on individual-level data, little is known about the opinions of the general population about homelessness and the societal value of the HF model, which can represent barriers to the model’s dissemination. Therefore, we present the protocol of a study designed for the following objectives: 1) to explore the knowledge, attitudes, and practices (KAP) about homelessness within the general population of 8 European countries, 2) to assess the valuation of the HF model by European citizens, and 3) to estimate the lifetime prevalence of homelessness in the targeted countries.MethodsA telephone survey was conducted from March to December 2017 among adults selected from opt-in panels from France, Ireland, Italy, the Netherlands, Portugal, Spain, Poland, and Sweden. A total sample of 5600 interviews was expected, with 700 per country. The interviews included three sections: first, the KAP about homelessness; second, the valuation of the HF model by measuring a respondent’s willingness-to-pay (WTP) through the contingent valuation method; and third, an assessment of the lifetime prevalence of homelessness among the general population. Descriptive analyses and comparisons between countries will be conducted. KAP indicators will be created and their psychometric properties assessed. Determinants of WTP will be assessed through regression models.DiscussionThis survey will highlight Europeans’ views of homelessness, especially their level of tolerance towards homelessness, potential misconceptions and the most important barriers for the implementation of the HF model. Additionally, the results on the valuation of the HF model by citizens could be instrumental for key stakeholders in understanding the level of support from the general population. Ethics approval has been obtained from the Aix-Marseille University Ethics Committee (n° 2016-01-02-01) for this study, which is part of HOME_EU: Reversing Homelessness in Europe H2O20-SC6-REVINEQUAL-2016/GA726997.

Public's Willingness to Pay Towards a Medical Device for Detecting Foot Ulceration in People with Diabetes.

Diabetic foot ulceration (DFU) is a common and serious complication among diabetic patients. A medical device has been developed to prevent the occurrence of DFU. The aim of this study was to investigate the willingness to pay (WTP) for this device among the general public in the UK. A contingent valuation survey was administered to 1051 participants through an online survey including questions on socio-demographic characteristics, self-reported health, knowledge of diabetes and medical devices, and WTP. A two-part model was used to analyse determinants of WTP, including a logistic model in the first part and a generalised linear model with a log-transformed WTP in the second part. More than half (55.9%) of the participants expressed a positive WTP. The annual mean (standard deviation) and median (interquartile range) WTP values were £76.9 (69.1) and £50 (80), respectively. Older age, middle-level education, good/excellent self-reported health, visiting doctors once/2-5 times, diabetes experience, medical device experience and more than average self-perceived likelihood of using similar devices were associated with a higher likelihood of willingness to pay. Younger age, male gender and higher household income were associated with higher WTP values. This study demonstrated that people are willing to pay for this device and they tend to contribute when they have experience of diabetes or similar devices and perceive self-benefit.

Farm Households’ Willingness to Pay for Forestation Based Soil Conservation Program on Communal Land in Bagh District, Kashmir

This study investigated farmers’ willingness to pay (WTP) for a forestation based soil conservation program on communal land in district Bagh, Kashmir. Data were collected from a random sample of 180 farm households on a well structured questionnaire possessed with a contingent valuation question. Majority of the sampled farm households reported moderate to high water erosion problem and their mean annual WTP for the soil conservation program was $34. The foremost beneficiary of the program were expected to be the farm households facing high erosion, and that’s why their mean stated WTP was significantly high than others. Other important determinants of WTP were farm-size, household’s income and head’s education, farming experience, perceptions about soil erosion and contact with extension agents. The aggregate WTP for a farm household were calculated to be $214 for 10 years. This suggests that sufficient funds can be generated from local stakeholders for the implementation of the soil conservation program.

Air Traveler's Willingness to Pay to Offset Their CO2 Emission in Pokhara

This study aims to investigate if there are a significant number of people who are ready for climate change mitigation action in case of air travelers in Pokhara city. Using the primary information to answer 46 structured questions from 142 respondents of Pokhara city in 2014, the study has estimated the air travelers’ willingness to pay (WTP) to offset their CO2 emission during their flight. The study has showed that with the mean value of 5.53% of their air fare, there is 78.16% probability of willingness to pay voluntarily to offset their CO2 emission caused by their activities by the air travelers in Pokhara. Besides, knowledge and attitude as major determinants of WTP, majority (about 83 percent) of the respondents have both high level of knowledge about carbon emission and high level of attitude towards its adverse impact. The study has also showed that foreigners are more likely to pay to offset their CO2 emission than that of Nepali citizens. Therefore, the findings could be a good information for making pricing, carbon taxing and mitigation policy at any level.

Willingness to pay for forest restoration as a function of proximity and viewshed

While numerous studies investigate the non-market value of wildfire suppression and ecological restoration, less research exists examining the spatial dimension of Willingness to Pay (WTP) for forest restoration, including distance to restoration and changes in viewshed. We estimate WTP for forest restoration in Flagstaff, AZ, US (pop. 70,000) using dichotomous-choice Contingent Valuation. Flagstaff, AZ is in a high-altitude, arid region in the Southwestern US surrounded by publicly managed forests with views of mountain peaks. Large-scale forest restoration is proposed within proximity to Flagstaff’s city limits. We explicitly model distance to potential treatment area as a determinant of WTP to examine the impact of distance to forest restoration. We further incorporate viewshed into our WTP estimates by controlling for whether a respondent has a mountain peak view. After controlling for viewshed, we find policy-relevant results associated with distance and viewshed. WTP increases as distance to proposed treatment area decreases. However, holding distance constant, respondents with prime mountain peak views are less likely to be WTP for forest restoration. Our results indicate that careful consideration of the complex relationship between distance, viewshed, and WTP is necessary for efficient restoration management decisions.

CVM을 활용한 해양스포츠의 경제적 가치 평가

The purposes of this study are to estimate the economic value of marine sports using CVM and to present the validity of investment in marine sports by the government and municipalities. Also, it is to provide the fundamental data to identify ways to increase the economic value of marine sports. In order to accomplish the study purposes, the study employed a CVM survey method with a total of 409 B metropolitan city residents over 20 years old who could have the capability to pay tax. The data were analyzed through SPSS 22.0. A binary logistic regression was modeled with a dichotomous dependent variable, willingness to pay (WTP). The independent variables such as gender, age, education, income, residence, experience and interest were input in the model. The economic value of marine sports was also estimated by using a model suggested by previous studies for CVM. Accordingly, following main findings are derived from the study. First, the logistic model for examining WTP determinants was statistically significant. Χ²(16, N=409)=57.120, p=.000 Cox and Snell R² and Nagelkerke R² were reported as .169 and .226 respectively. So, the model accounted for between 16.9% and 22.6% of the variation in WTP. Among the independent variables, gender, age, income, and interest were found to be the significant factors to WTP. Second, the mean amount of WTP was calculated as 2,191 won per person and the percentage of WTP was 50.7%. The annual economic value of marine sports was estimated as 18.95 billion won and the total value was 94.75 billion won. For non-payment reasons, ‘No financial leeway’ showed the highest frequency, followed by ‘No thought’, ‘Complaint on improper payment method’ and ‘High recommended amount’.

Economic value of marine biodiversity improvement in coralligenous habitats

Coralligenous habitats are an important ‘hot spot’ of species diversity in the Mediterranean and grant a variety of valuable ecosystem services. Currently, these areas are under threat due to human activities such as unsustainable and destructive fishing practices, environmental phenomena, and other significant pressures related to global environmental change. The coralligenous habitats are also endangered by practices that result in the presence of abandoned, lost, or otherwise discarded fishing gear (ALDFG) at sea, a worldwide phenomenon only recently stigmatized whose impacts on marine habitats and coralligenous areas are serious.The aim of this paper is to investigate the economic value of restoration strategies promoted to safeguard and improve biodiversity in these coralligenous habitats through a contingent valuation survey administered to a sample of 4000 Italians. Households’ willingness to pay (WTP) for biodiversity restoration and conservation ranges between €10.30 and €64.02 depending on the assumptions underlying the different models. The main positive and significant determinants of WTP are a previous knowledge or familiarity with coralligenous habitats and biodiversity issues, income, education, environmental attitudes, and the knowledge that indiscriminate fishing may be dangerous for biodiversity in a coralligenous habitat.

Identification determinant factors on willingness to pay for health services in Iran

BackgroundA common method used to examine the relationship between internal preferences and caring externalities is willingness to pay (WTP) approach. We aimed to estimate WTP for health status with different severity level and identify determinant factors on WTP.MethodsFor determining main factors in WTP, a cross-sectional study was conducted in Shiraz in the southeast of Iran, in March to April 2015. The open-ended method was used to estimate monthly WTP in private and altruistic section. Multivariate regression analyses using ordinary least squares were applied to examine the effect of Scio–demographic factors on WTP using SPSS software 21.ResultsParticipants were willing to pay an average amount of $ 295 in health status 1 and an average amount of $ 596 in health status 6 (worst status) for internal preferences. Altruistic WTP for health status 1 was $ 294 and participants were willing to pay an average amount of $ 416 in health status 6. Multiple regression analysis identified monthly income as the key determinant of WTP for internal preferences and caring externalities (P < 0.01). With an increase of 1% in income, private WTP increase 1.38% in health status 1.ConclusionsThe finding indicates that the mean of WTP increases at severe health status; therefore, health policy maker should allocate resources toward severe health status.

Levers supporting tariff growth for water services: evidence from a contingent valuation analysis

The backwardness of the water utilities sector necessitates urgent investment in infrastructure to improve water quality and efficiency in water supply networks. A policy of tariff growth represents the main source to sustain such investments. Therefore, customer engagement in the form of willingness to pay (WTP) is highly desirable by water utilities to obtain social legitimization and support. This study examines the determinants of consumers' WTP for improvement programs for three drinking water issues: quality of water sources, renewal of water mains, and building of new wastewater treatment plants. The study is based on a survey conducted among a sample of 587 customers of a water utility located in the province of Verona in the north of Italy. The contingence valuation method is used to measure WTP. Specifically, an ordinal logistic regression model yields the following significant determinants of WTP: quality of water and services provided, preference for privatization of the water utility, sustainable consumption of water, and some socio-demographic variables. The findings provide interesting insights into the drivers of WTP as well as managerial recommendations for water utilities. In particular, the findings show that water utilities need to improve service and water quality to increase customers' acceptance of tariff growth. In addition, utilities should invest in customer education and communication activities focusing on specific age groups (e.g., older customers) to enhance their WTP. Finally, communication strategies should reinforce the possible role of liberalization and privatization in supporting infrastructure investments.

Sensory attributes shaping consumers’ willingness-to-pay for newly developed processed meat products with natural compounds and a reduced level of nitrite

While innovation to improve processed meat products (PMPs) is promising, sensory characteristics remain the key factor shaping consumers’ preference and purchase decisions. These two studies employed a non-hypothetical and novel analytical approach to study how sensory attributes influence consumers’ willingness-to-pay (WTP) for new PMPs with added natural compounds and a reduced level of nitrite. Vickrey’s second-price experimental auctions were organised with conventional and the new PMPs. Study 1 was in Belgium (n=208) with cooked sausage; Study 2 was in the Netherlands (n=107) with cooked ham. Elastic net (EN) regularised regression models and regression trees were used to assess determinants of WTP under data constraints. Overall, WTP was positively influenced by a higher overall liking, appearance familiarity and a better colour, and negatively influenced by a stronger experience of aftertaste and darker colour. The order effect of tasting and information provision was opposite in the two studies. The study with cooked sausage also showed a positive effect of a better texture and taste, and a negative effect of a too weak intensity of meat taste on WTP. The study with cooked ham indicated a positive effect of a better smell, stronger salty taste and less dry texture, and a negative effect of a too strong intensity of meat smell on WTP. Whereas Just-About-Right (JAR) scales are widely applied in consumer research to identify optimal sensory attribute levels, both studies revealed that JAR ratings do not necessarily translate into a higher WTP. These studies yield recommendations for consumer-driven food product research and development.

Altruism and Willingness to Pay for Environmental Goods: A Contingent Valuation Study

This study aims to reexamine the relationship between altruistic orientation and individuals’ willingness to pay (WTP) for environmental goods using contingent valuation. Altruistic motivation is known to be an important determinant of WTP. In the attitudinal scales used in previous research, the context of questions about altruistic motivations is specific to environmental issues. Instead, this study employs other psychological scales that measure altruistic orientation in a more general context, independently from environmental issues. The result is consistent with previous studies, but the impact of altruistic orientation is rather limited. This difference suggests that the context of questions may enhance respondents’ consciousness about the environment and bump up the value of their WTP.

An estimation of willingness to pay for secondary health care services in Tamil Nadu, India

The present study has estimated the willingness to pay (WTP) for secondary health care services (SHCS) in rural and urban environment of three districts in the state of Tamil Nadu during 2009-2011. Since the governments are struggling to mobilise additional financial resources to provide essential health care services to the deprived population in the country, assessing the WTP for utilising the public health care services are realised as very important at this juncture. In realizing the importance of augmentation of resources, it has been decided to introduce contingent valuation method (CVM) for WTP of SHCS. A disproportionate systematic random sampling method has been adopted for the selection of 720 households; representing 240 respondents from each of the three districts represent 120 from rural and 120 from urban. A major portion (92%) of the surveyed respondents’ gender was male, literacy was high (90%) and they belonged to productive age group. They generally involve themselves in the farm and non - farm activities and avail employment. Their per capita income is Rs.17871, and it is lower than the India’s PCI. The SHCS are classified into 26 categories as per the guidelines provided by public health medical officers in the state of Tamil Nadu. The different health care services started with entry fee to dental problem. The 98.6 per cent of the total surveyed respondents are ready to pay for SHCS in a public hospital and the remaining 2.4 per cent of them are not willing to pay for the same. The range of WTP for 26 SHCS is Rs. 2 - 7000; the range of mean value is Rs. 6 - 5008 and the range of SD is 2 - 2854. Considering the view of majority of the respondents, this study prescribes to introduce the range of user fee for the identified major public health care services. Since the range is differed significantly, it is suggested to follow the minimum amount initially and in a phased manner, the policy makers may prescribe to enhance the user fee after assessing the ground realities and loopholes. The estimated R2 value for SHCS is 20 per cent, which indicates that the selected 12 independent variables have low influence on WTP for SHCS. The study reports that the other exogenous factors like intensity of disease, accessibility of services, quality, urgency, need and perception are the predominant determinants of WTP for SHCS. The present research contends that constitution of district level co-ordination committee for fixing and implementing user fee for SHCS. Introduction of nominal fee (user fee) for SHCS may be fixed for affordable population, free services for BPL population and it would improve the efficiency and equity of the public health care services for the marginalised population. Finally, it is of utmost importance for health professionals to follow ethics in their profession.

A regional analysis of willingness-to-pay in Asian cruise markets

This article tests whether the willingness-to-pay (WTP) of cruise tourists is affected by multivariables, namely regional level variables, socio-demographic variables, cruise perception variables, cruise motivations and cruise preferences. Our research aims to measure the influence of the multivariables on the WTP of cruise tourists, in order to trace the determinants of WTP. Using a censored regression model, the following variables are found to be highly associated with the WTP of cruise tourists: income, education, family structure, occupation, cruise experience, cruise duration and cruise preferences. The results of the modelling not only fill in existing research gaps in the theory of WTP but also shed new light on the comparison of multiple regions in terms of the difference of WTP of cruise tourists. A latent cluster analysis is further conducted to identify market segments with different cruise WTPs, and this knowledge can be used to improve the marketing performance of cruise companies in the growing Asian markets.

Determinants of Improved Waste Management Services in Delhi: An Economic Valuation

Emerging nations such as India, with fast pace of development and rapid urbanisation, are increasingly witnessing a problem of solid waste mismanagement because of rising population and industrialisation. Factors associated with this advancement put pressure on the current municipal infrastructures, services and financial resources. This study employs cross-sectional survey analysis across eleven districts of Delhi to determine inhabitant’s willingness to pay (WTP) for improved waste management services and also suggests measures to control this menace. One sample city from each district is chosen and a contingent valuation methodology is used to estimate WTP. Economic valuation of the benefits derived from cleaner environment is done through stratified random sampling technique from each sample city. The survey has been administered among 450 respondents of Delhi. The sample cities chosen for the project are “Amar Colony (South-East Delhi), Janakpuri (West Delhi), Rohini (North-West Delhi), Kamla Nagar/Model town (North Delhi), Saket (South Delhi), Darya Ganj (Central Delhi), Yamuna Vihar (North-East Delhi), Satya Niketan (South-West Delhi), Karkardooma (East Delhi), Vasant Vihar (New Delhi) and Shahdara.” The respondents in the survey are divided into three categories, Households, Recognised Branded Vendors and Unbranded Vendors, representing the commercial faction of society.A binary response question followed by an open ended question have been put forward to the respondents in order to measure their WTP The administered survey shows that 81% of respondents have positive WTP for improved solid waste management (SWM) services. Logistic and multiple regression models are used to estimate the WTP. As per the regression analysis, the mean WTP for entire Delhi region came out to be approx ₹155/month. Of which WTP for the branded Vendors is ₹311/month, WTP of Household is ₹114/month and WTP for unbranded Vendors is ₹39/month. The key determinants of WTP are income level, education level, perception of the surveyed area’s environment quality, dissatisfaction from current SWM services and past disease trajectory, contracted from poor solid waste management. The respondents with higher levels of income and education show higher WTP. However, there is a negative relationship of dissatisfaction level and serious disease history with WTP. The per capita waste generation for different regions of Delhi has been calculated with a maximum generation of 0.507Kgper person in the MCD zone.A rank has been assigned to each city on the basis of perception of the respondents on three grounds: Environmental Quality, Satisfaction with current solid waste management and Prior Disease History Trajectory. The top five cities which need immediate attention are Darya Ganj, Yamuna Vihar, Satya Niketan, KarKardooma and Shahdara. The findings from this study can aid policy-makers in formulating the solid waste management measures in Delhi as well as in other regions facing similar problems.

Cultural Attitudes as WTP Determinants: A Revised Cultural Worldview Scale

There has been little attention paid to the systematic measurement issue of general attitudes toward human-culture relationships. This paper applied the Cultural Worldview (CW) scale that was developed by Choi et al. in 2007 (published in the Journal of Cultural Economics), and investigated its dimensionality and relationship with willingness to pay (WTP) for cultural heritage protection through a sequential integration between latent variables and valuation models. A case study of 997 Korean respondents was employed to examine conservation values of cultural heritage sites using discrete choice models. Confirmatory factor analyses demonstrated that this scale can be used either as a single second-order factor or four correlated factors. A more parsimonious version of the CW scale with twelve items is endorsed in this paper and the results also confirm that it is valid for use with non-Western nations. The findings support a significant attitude–WTP relationship; there was a significant role of the CW scale that reveals unobserved factors in valuation models.

The role of question format for the support for national climate change mitigation policies in Germany and the determinants of WTP

This contingent valuation survey examines the willingness to pay (WTP) for climate change mitigation in Germany. Willingness to pay is assessed by using a classic dichotomous choice referendum format and a two-way payment ladder in a split-sample design. We find that mean WTP under the referendum format is more than twice the WTP in the payment ladder format, but median WTP does not differ. Moreover, we test the possible effect of different determinants on WTP. Determinants that considerably influence WTP are personal norm, climate change scepticism, agreement with the German Renewable Energy Law and individualistic cognition. Income and gender are also important predictors.