Dichotomous Choice Contingent Valuation Method Research Articles

Are retail investors willing to buy green bonds? A case for Japan

ABSTRACT With the growing importance of the financial sector in mitigating environmental pressure, many financial institutions have begun issuing green bonds. This study investigated retail investors’ willingness to pay for green bonds using the double-bounded dichotomous choice contingent valuation method. The findings from the survey performed on Japanese respondents reveal that, on average, respondents are willing to invest in green bonds when offered an annual interest rate of around 1.1%. The results also indicate that respondents with higher altruism and environmental awareness levels, information about green bonds, and frequent investors have a higher preference for investing in green bonds. The results suggest financial institutions’ importance in providing information on how green bonds can help reduce environmental pressure and raise investors’ awareness of green bonds.

Determinants of Visitors’ Willingness to Pay for Enhanced Ecosystem Services in Mudumalai Tiger Reserve, Tamil Nadu, India: A Contingent Valuation Approach

This study examined the factors influencing visitors’ willingness to pay for improved ecosystem services through the conservation of the Mudumalai Tiger Reserve (MTR) in the Nilgiris District, Tamil Nadu, India. The MTR plays a crucial role in providing and protecting various ecosystem services. However, it is vulnerable to negative externalities and drivers of ecosystem change, which affect the quality and quantity of ecosystem services, leading to the loss of valuable ecosystem services. To address this issue, it is necessary to understand the adverse effects of externalities and drivers of ecosystem change, as well as to consider people’s preferences. To investigate the factors influencing visitors’ willingness to pay for enhanced ecosystem services in MTR, this study used a dichotomous choice-contingent valuation method and a logit regression model. The study found that 64% of visitors expressed concern about mitigating adverse impacts and were willing to provide financial support. The results of the logit regression analysis further revealed that factors such as family size, respondent education, monthly family income, environmental awareness, and bid price significantly influenced visitors’ willingness to pay. To enhance ecosystem benefits and address the challenges in tiger conservation within the reserve, our study suggests that several measures need to be implemented, including prioritizing education, awareness, the mitigation of human–wildlife conflict, and income-linked and dynamic pricing strategies.

Estimating the Social Value of Digital Signage Landmarks as Sustainable Tourist Attractions

As urban tourism increases, digital signage landmarks are frequently utilized to develop and enhance the attractiveness of cities for tourism. However, the benefits of this development for local residents have not been fully explored from a sustainability perspective. Thus, this study aims to quantitatively analyze local residents’ perceptions of digital signage landmarks in urban areas using one of the prominent icons, the Samseong-dong free display zone in Seoul, Korea. To measure the overall value of the landmarks, this study used a double-bounded dichotomous choice contingent valuation method and spike model. Based on the surveys of 600 respondents in Korea, the results show that a household’s willingness to pay to support the landmark annually is KRW 5401 (USD 4) on average in the form of income tax. The perceived annual value for the landmark is about KRW 790 million (USD 60 million), surpassing that of typical tourism attractions in Korea.

A community group decomposition of the willingness to accept: evidence from sand, stone and gravel mining activities in Padang Pariaman, West Sumatra, Indonesia

ABSTRACT Households in the immediate vicinity of sand, stone and gravel river mining all receive negative externalities, but some of them also benefit from mining activities. Differences in the perceived effects between community groups affect their acceptance of negative externalities. This study decomposes the calculation of the mean willingness to accept (MWTA) negative externalities from river mining activities between two community groups in the Batang Anai River area in the Padang Pariaman Regency, Sumatra, Indonesia: (a) farmers and (b) individuals involved in mining activities. First, the logit model is used to determine the effect of household characteristics on the probability of the community declaring environmental degradation. Next, the dichotomous choice contingent valuation method (DC-CVM) is employed to estimate the residents’ willingness to accept (WTA) the minimum value of compensation due to negative externalities from mining activities. We utilise four scenarios to prove the presence of bias if the decomposition is not taken into account in estimating the MWTA. According to estimation results, individuals who are engaged in mining have a 21% lower MWTA value than farmers. Meanwhile, indirectly affected communities who engage in mining have a MWTA value that is 32% lower than that of farmers. The implication of this study is that the decomposition of the MWTA by community groups is important to provide the real value of negative externalities.

Establishing cost-effectiveness threshold in China: a community survey of willingness to pay for a healthy life year

IntroductionThe willingness to pay per quality-adjusted life year gained (WTP/Q) is commonly used to determine whether an intervention is cost-effective in health technology assessment. This study aimed to evaluate the...

Public willingness to pay for personal carbon trading of green travel: based on survey data from five capital cities in eastern China

Personal carbon trading is a form of pollution rights trading that is worth exploring as an innovative tool to cut back carbon emissions from travel. This paper proposes a policy scenario in which car users who exceed the average distance traveled quota are required to purchase travel credits from those who do not reach the quota and pay for them on a per hundred kilometer basis. Willingness to pay (WTP) for personal carbon trading is introduced to calculate the travel cost and its influencing factors are analyzed from the perspective of green travel. Using the double-bounded dichotomous choice contingent valuation method (DBDC), 2712 residents’ data from five provincial capital cities in eastern China is obtained. Based on this, this study first uses a binary logistic regression model to analyze the characteristics of people who are not willing to pay for green travel carbon trading, and then leverages an interval regression model to explore the willingness and intrinsic motivation of being willing to pay more or less for green travel. The results suggest that perceived usefulness is a key influencing factor of residents’ willingness to pay or pay more for green travel; Personal habits have a significant positive effect among those willing to pay; Subjective norms and moral norms can well account for the unwillingness to pay; Attitudes, perceived behavioral control, and environmental awareness fail to predict the willingness to pay among those who are unwilling to pay. In addition, WTP is also affected by demographic variables such as income and educational background. The empirical results as well indicate that the final average level of respondents’ WTP is 39.95 yuan per 100 km. The findings of this paper can provide a pricing basis while formulating personal travel carbon trading policies.

Determinants of Smallholder Rice Farmers’ Willingness-to-Pay for Private Extension Services in Liberia: The Case of Gibi District

Globally, many policymakers and extension professionals have advocated for the privatization of extension services in order to reduce the burden of funding faced by the state as well as to adequately respond to the low productivity problem of farmers as they endeavor to tackle productivity problems. This study assessed willingness-to-pay (WTP) for private extension services by farmers and identified the determinants of their WTP using Gibi District of Liberia as a case study. A multistage sampling technique was used in selecting 296 smallholder rice farmers in the district while the double-bounded dichotomous choice contingent valuation method was used to elicit maximum WTP value for farmers. Descriptive statistics were computed and the double-bounded logit model used to analyze the data. The findings revealed that 78.7% of the rice farmers were willing to pay for privatized extension services and on average, a farmer was willing to pay US$11.21 per farm visit, almost twice the average daily wage rate of a skilled worker in Liberia. The results from the model showed that WTP was significantly positively influenced by the household head’s age, years of schooling, household size, annual income, and distance to extension service provider. The study recommends that the Liberian government and its development partners should encourage the private sector to invest more in extension services to take advantage of the relatively high farmers’ WTP and effective demand. In addition, the government should design and implement programs that reduce transaction costs in addition to increasing farmers’ income in order to enhance their capacity to pay for privatized extension services.

Estimating Households’ Willingness-to-Pay for an Improved Solid Waste Management in Butuan City, Philippines

The concept of community participation has been a strategy of different organizations in implementing a program. A waste analysis and characterization study (WACS) was conducted in Butuan City, Philippines, before the disruption of the COVID-19 pandemic in 2020. Along with WACS is the determination of the household waste generators' willingness-to-pay (WTP) amount for improved management of solid waste in the City using the dichotomous choice contingent valuation method (DC-CVM). The study involved 427 randomly selected households who were asked how much they would pay based on the pre-identified bid prices. Respondents were iteratively asked for the WTP amount until the highest possible amount was elicited. The mean amount of WTP was estimated using the logistic regression model. The model considered the household’s socio-economic profile, solid waste generation, management practices, and perception as predictors of the WTP amount. As a result, households are willing to pay PhP19.27 every month. The model also shows that bid amount WTP, practice on segregation, awareness of collection schedule, respondent’s age, and the household’s total monthly income are significant factors affecting the willingness to pay. With the results on the suggested amount, it hopes to help the LGU Butuan Legislators and solid waste management task force formulate actions and strategies to ease the mounting problem of solid waste in the city.

Citrus growers’ willingness to pay and perceptions of cover crops

AbstractThis study develops and uses a survey to gather information on demographics, production and management practices, and perceptions on using cover crops as a conservation practice from citrus growers and utilizes the double-bounded dichotomous choice contingent valuation method to measure their willingness to pay (WTP) for adopting cover crops in citrus production. The survey is conducted for citrus producers in Florida and Texas. The study finds that, on average, growers from Florida are willing to pay $509.48/acre per year for adopting cover crops. This is substantially less than the WTP for growers in Texas, who are willing to pay more than $1,000/acre per year for cover crops. The study analyzes the factors that have significant impacts on growers’ WTP for cover crops and discusses the heterogeneity in the grower perceptions on the benefits and drawbacks of using this conservation practice by state. Although using cover crops has not been a popular conservation practice in perennial fruit production systems, its potential to improve soil quality is particularly important for citrus production in Florida where soils are sandy and have low organic matter.

Investigating Factors Affecting Institutional Investors’ Green Bond Investments: Cases for Beijing and Shenzhen

We conducted a survey of institutional investors in Beijing and Shenzhen to analyze the factors affecting green bond (GB) investing in China, such as credit rating, GB issuer, fund use, liquidity, redemption term, certification label, and type of currency. We then compared the results for Beijing and Shenzhen, including factors that affected greenium and the two cities’ willingness to pay (WTP). Using a double-bounded dichotomous choice contingent valuation method, we find that higher credit ratings tend to increase Beijing investors’ WTP and that the use of GB proceeds affects Shenzhen investors’ WTP. We also find that investors place importance on the type of currency, length of redemption term, and liquidity when investing in GB, while the certification label does not have an impact on WTP. The WTP for GB was higher among Shenzhen investors than among Beijing investors. These findings provide important insights for the government and financial institutions to take the right action to expand the GB market and to establish a GB framework that induces the financial sector toward reducing greenhouse gas emissions.

Hometown effect on consumer preferences for food products

This study examines how consumers’ hometown orientation affects their preferences for food products. Regarding food products, consumers may prefer products from their hometown over those produced in other domestic areas, among other factors. We consider that due to population migration, a consumers’ current or local place of residence may not necessarily be their hometown. After defining the hometown effect with a framework of consumer willingness to pay, we apply a double-bounded dichotomous choice contingent valuation method to value the hometown effect on a rice product, based on a consumer survey conducted in Japan. This study reveals that consumers’ hometown orientation significantly affects their preferences for the rice product produced in their hometown. The magnitude of the hometown effect for the product is estimated at 48 JPY (0.44 USD) per kg in terms of consumer willingness to pay. The premium rate of the hometown effect compared with the price of the base product is 12.4%. Food labels indicating more detailed region of origin information could be a potential marketing strategy to appeal to consumers from that region but currently living in other areas.

Public Willingness to Pay for Green Lifestyle in China: A Contingent Valuation Method Based on Integrated Model.

The purpose of this study was to note how people recognize the green lifestyle and how much extra money they are willing to pay for it. An integrated model based on the theory of planned behavior was constructed, and data on the willingness to pay (WTP) for green lifestyles of 1377 respondents in five cities in East China were measured and calculated using the double-bounded dichotomous choice contingent valuation method (DBDC) combined with interval regression analysis. The results showed that the respondents were willing to pay an extra 81.8 yuan, 52.5 yuan, 38.9 yuan, 53.2 yuan, and 37.2 yuan per month for green food, clothing, travel, housing, and waste recycling, respectively. Attitude and moral norms were the strongest predictors of WTP for green clothing, travel, housing, and waste recycling. Perceived behavior control, environmental awareness, personal habits, subjective knowledge, gender, income, and education can affect a few kinds of green lifestyle's WTP.

Institutional Investors’ Willingness to Pay for Green Bonds: A Case for Shanghai

The issuance of green bonds has been increasing since 2016 in China, and the number of papers covering the topic is growing. In previous studies on greenium, not much has been investigated from the institutional investors’ perspective. The study estimates the institutional investors’ level of greenium by surveying the institutional investors in Shanghai, China, from October 23 to 1 November 2021, using the double-bound dichotomous choice (DBDC) contingent valuation method (CVM). The study also analyzes the effects of variables that are known to be important for the green bond based on previous studies. The study identifies that there is a greenium level of 0.47%. Among the seven variables tested with logit regression models, the credit and currency of the bond had a positive effect on the greenium. The study provides helpful insights for issuers’ strategic planning and could be a stepping stone to increasing issuance not only for the Chinese green bond market but also for the global green bond market.

Will the public in emerging economies support renewable energy? Evidence from Ho Chi Minh City, Vietnam

Public acceptance and support are crucial to increasing the adoption of renewable energy technologies and establishing new renewable energy policies. In Vietnam, where plans to rapidly scale-up electricity generation are among the fastest globally, one question of interest is what would motivate people to pay more for electricity generated by renewable energy sources? As part of its national Power Development Plan, Vietnam targets a future electricity mix consisting of at least 21% renewable energy by 2030. This study assesses the public's willingness to pay (WTP) for increasing renewable energy share and corresponding motivating factors in Ho Chi Minh City, Vietnam. Drawing from a valid sample of 294 households, this study uses a double-bounded dichotomous choice contingent valuation method (CVM) to evaluate the public perception of renewable energy. On average, respondents are willing to pay about $4.39 USD more on their monthly electric bill to support renewable energy, which represents a 9.48% increase. Notably, respondents most concerned with air quality and the utility's profitability indicated their support to pay more for renewable energy. This study suggests the importance of communicating health-related air pollution mitigation benefits for emerging economies and building support among customers so that electric utilities can increase renewable energy targets. From a policy perspective, improved and transparent disclosure of air pollution data and utility financial statements could expedite the transition to renewable energy in emerging economies, such as Vietnam.

Willingness to pay for improved water supply service in coastal urban settings: evidence from Khulna, Bangladesh

Abstract The provision of clean water and sanitation has been one of the challenging targets of the Sustainable Development Goals (SDGs) for developing countries like Bangladesh. The southern cities of the country confront the scarcity of fresh and improved water for drinking and sanitation. The study aims to investigate the demand for improved water service among city dwellers and the potential revenue for the water supply authority. The study surveyed 100 households in Khulna city by administering a simple random sampling method. The single-bounded dichotomous choice contingent valuation method revealed that years of schooling, household income, and excessive time in water collection positively affect willingness to pay (WTP) for improved water service. The households are willing to pay US$ 5.05 per month on average for enjoying improved water service, which in turn produces annual revenues of US$ 4.26 million, overriding the current level of revenue by 2.5 times. Additionally, the water supply authority is incurring around US$ 2.14 million of revenue loss annually which can be recovered by supplying improved water to the city households. This study suggests that the government may be able to address the fresh and improved water scarcity in the urban territory by capturing and utilizing the potential revenue efficiently through removing the structural barriers.

Willingness and ability to pay for health insurance in Afghanistan

The study assessed willingness to join and willingness to pay for health-insurance in Afghanistan and identified associated determinants. A household survey was conducted. Two health-insurance and two medicine-insurance packages were explained to respondents, who were then asked if they would be willing to join the packages and pay for them. The double-bounded dichotomous choice contingent valuation method was used to elicit the maximum amount respondents would be willing to pay for the various benefit packages. Logistic and linear regression models were used to examine determinants of willingness to join and willingness to pay. Most respondents had never heard of health insurance. And yet, when they were told about it, the vast majority of respondents said they would be willing to join one of the four benefit packages and pay for them, ranging from 70.7% for a medicine-only package that included only essential medicines, to 92.4% for a health-insurance package that would cover only primary and secondary care. The average willingness to pay cost was 1,236 (US$21.3), 1,512 (US$26.0), 778 (US$13.4) and 430 (US$7.4) Afghani per person, per year for the primary and secondary; comprehensive primary, secondary and some tertiary; all medicine; and essential medicine packages; respectively. Key determinants of willingness to join, and to pay were similar, including the provinces where respondents were located, wealth status, health expenditures and some demographic characteristics.

Willingness to Pay for Mangroves’ Coastal Protection: A Case Study in Santo Angel, Calauag, Quezon, Philippines

The mangroves in Santo Angel in the municipality of Calauag, Quezon Province in the Philippines, provide a wide array of ecological services that range from provisioning of resources and habitat to various floral and faunal species to regulating services including coastal protection. Coastal protection from mangroves is needed by the local community as Santo Angel is susceptible to typhoons and storm surges. However, the mangrove’s ability to provide coastal defense has considerably declined in the past decades due to overexploitation. Using the double-bounded dichotomous choice contingent valuation method, the willingness to pay (WTP) of the local community for a hypothetical mangrove rehabilitation project aligned towards coastal protection was determined. A total of 210 households were involved in the survey. The results show that 79% of the 210 households expressed WTP for the mangrove rehabilitation project. Furthermore, the mean willingness to pay (MWTP) for the mangrove rehabilitation project was computed at Php 15.44 (USD 0.29) per household per month or equivalent to Php 86, 525.76 (USD 1,659.41) per year for the total number of households in Santo Angel. Findings of the logistic regression analysis revealed that sex, age, membership in environmental organizations, and awareness on both the economic importance and the ecological services provided by mangroves positively affect the WTP of the respondents. In contrast, the bid amount and the respondent’s income negatively influence the WTP of the respondents for the mangrove rehabilitation project.

Willingness to pay for travel insurance as a risk reduction behavior: health-related risk perception after the outbreak of COVID-19

This study aims to identify the effects of health-related risk perception and sociodemographic characteristics on the willingness to pay (WTP) for travel insurance as a risk reduction behavior following the outbreak of COVID-19. Through the application of a double-bounded dichotomous choice contingent valuation method, this study found several determinants for travel insurance price (i.e., risk perception toward traveling, perception about the influence of COVID-19, past travel insurance purchase experience, age, and education). The mean WTP was estimated to be approximately KRW 11,700 (USD 10.23). Several theoretical and managerial implications regarding risk perception and travel insurance are discussed.

FACTORS AFFECTING WILLINGNESS TO PAY FOR ORGANIC VEGETABLES IN NEPAL

Consumers are more conscious for their health; as a result, demand of organic vegetables has been increasing. The objective of this study was to assess factors affecting the willingness to pay (WTP) for premium price for organic vegetables in Nepal. A sample of 720 respondents, surveyed at four markets in Nepal, analysed by descriptive statistics and Probit model under Dichotomous Choice Contingent Valuation Method. Overall, the average premium price that consumers were willing to pay for organic vegetables in country was 26.4%. Age, education, and knowledge-related variables were important determinants at lower premium price while affordability factors such as income, expense on vegetable, marital status, and family size appear to be important determinants of WTP at high premium price for organic vegetables. Income was strongly significant and positively influencing WTP at 30% or higher premium levels. Family size was significant and negatively associated to WTP at all levels of premium price. The result suggests to invent cost-saving policy at producer level for reducing the requirement of high premium price.

Estimating cost of fighting against fake news during catastrophic situations

As the battle with COVID-19 continues, an Infodemic problem has been raised. Even though the distribution of false news in national disaster situations has been reported for a long time, little attention has been given to the quantitative research of the fake news problem from the audience’s perspective. This study, therefore, aims to estimate how much tax taxpayers would gladly pay for a virtual public-run fact-checking system. Using a one-and-one-half bounded dichotomous choice contingent valuation method, a survey was conducted on 525 respondents in Korea, and the spike model was applied to distinguish zero willingness-to-pay (WTP). The results show that a household’s WTP for the public fact-checking system is 10,652 KRW (9 USD), on average, in the form of income tax for five years. Given the amount is a regular payment in perpetuity, the total WTP is estimated at 23 billion KRW ($196 M) every year. The result also shows that an individual’s WTP increases as his or her psychological damage caused by fake news is high, as well as his or her high reliance on news in a disaster situation.