Dichotomous Choice Contingent Valuation Research Articles

Estimating Willingness to Pay for a Future Recreational Park Atop the Current Jakuševec Landfill in Zagreb, Croatia

The main purpose of this study is to investigate the economic value potentially accrued by a prospective city park, which is planned to be built as a result of strategic land reclamation of a current landfill in Croatia, based on parkgoers’ marginal willingness to pay. The idea of this land transformation is inspired by recent debate on the issue of how to address air quality and other environmental concerns over the disposal of the landfill site in the city. Like any other nonmarket valuation studies, choosing a proper survey method is a critical step for a successful economic valuation study. We adopted a double bounded dichotomous choice contingent valuation method in survey design and data collection, followed by parameter estimation using the logit model. The study reveals—(1) the support of 70% of respondents was estimated; (2) as much as 96% of the respondents are willing to visit the park being presented to the respondents along with the survey questionnaire. The economic valuation indicates that the city residents are willing to pay €3.63 per person for the park’s entrance fees, which can be translated into an aggregate of €2,867,762. By referring this value information to the park budget, we may persuade policy makers to commit to a transformation of the current landfill.

How much load flexibility can a euro buy? Findings from a contingent valuation experiment with companies in the German commerce and services sector

Demand-side load management is considered a cost-efficient solution for accommodating growing shares of intermittent renewable electricity production. We employ a double-bounded dichotomous choice contingent valuation (CV) experiment with 275 companies in the German commerce and services sector to estimate the effectiveness of a subsidy to make their ventilation, air conditioning, refrigeration and freezing systems available for automated load management. Our estimates suggest that a given subsidy would unlock more flexible load at lower per MWh subsidy costs from air conditioning compared to ventilation. We find no effect of subsectors and the proposed frequency and duration of the load curtailments on the subsidy level. Subsidy levels in the center of the distribution yield specific subsidy costs that suggest that load management in the commerce and services sector may become a competitive option on the balancing market.

Is there an opportunity for product differentiation between GM and non-GM soya-based products in Argentina?

Consumer demand for product differentiation between GM and non-GM “milanesa de soja” – a broadly consumed soya based product in Argentina - is analyzed by estimating consumer's WTP for a non-GM “milanesa de soja” using a double bound dichotomous choice contingent valuation method on a sample of 557 Argentinian consumers. Heterogeneity in consumers' WTP is taken into account by incorporating consumer's views on the risks and benefits associated with GMOs; consumer's subjective and objective knowledge on GMOs; consumer's relatedness to agriculture along with their socio-demographic characteristics into the analysis. Product differentiation for non-GM “milanesa de soja” was supported by consumers who tend to perceive risks associated with GMOs while not perceiving their potential associated benefits. This type of consumers would be willing to pay a 50% premium on the current price for a non-GM “milanesa de soja” (ARS $89.78). On the other hand, consumers who are more supportive of GMOs would be willing to pay less than the current price, ARS $60.00, for a non-GM “milanesa de soja” (ARS $56.97). Consumers who hold more objective knowledge on GMOs were found to be less supportive of product differentiation. Income and gender were found to be related to consumer's WTP for non-GM “milanesa de soja”. Overall, oduct di support for prfferentiation was found from consumers who perceived GMOs as a risky technology and do not appreciate its associated benefits. This support for product differentiation measured in monetary terms would need to be set side by side with the implementation costs of regulation (e.g. labelling) before its implementation.

Willingness to pay for family education and counselling services provided by critical care advanced practice nurses.

AimThe aim of this study was to estimate the economic value of a family education and counselling service provided by critical care advanced practice nurses in South Korea utilizing a contingent valuation approach.MethodsA double‐bounded dichotomous choice contingent valuation method was utilized to estimate the public's willingness to pay value for an education and counselling service provided by critical care advanced practice nurses. A web‐based self‐administered survey was conducted.ResultsMedian willingness to pay was 43 112 Korean won (35 US dollars). Higher income and younger age were associated with higher willingness to pay.ConclusionThis study captured the economic value of an education and counselling service provided by critical care advanced practice nurses that is not on the benefit list under the fee‐for‐service system of the Korean National Health System. Policy makers should consider including such services in the health care system.

Household Preferences for Managing Coastal Vulnerability: State vs. Federal Adaptation Fund

People living in the coastal areas are highly vulnerable to the extreme weather events and climatic shocks. In this paper, we analyze households’ willingness to pay (WTP) for public adaptation funds to support proactive measures that would potentially minimize the extent of coastal vulnerability. Using split-sample dichotomous choice contingent valuation (CV) method, we investigate households’ preference for a state adaptation fund (SAF) versus a federal adaptation fund (FAF), lasting for either 5 or 10 years. We analyze more than 1200 randomly selected household responses from the counties of 10 Northeastern and Mid-Atlantic States that were adversely affected by a major hurricane (Sandy). From the annual estimates of median WTP, we observe that the households are willing to pay more for SAF ($68.37) than FAF ($27.35). The findings can provide inputs for policy evaluation to minimize coastal vulnerability, particularly to decide whether similar projects should be managed at the state or federal levels.

Assessing the impact of water price reform on farmers’ willingness to pay for agricultural water in northwest China

A water price increase has been used as an effective method to guarantee national water security and maintain national food security in China. The reasonableness of the water price has a direct influence on people's attitude, behavioural decision regarding willingness to pay, and motivation for water conservation. A double-bounded dichotomous choice contingent valuation method was used to assess the impact of integrated agricultural water price reform on farmers' willingness to pay for irrigation water in northwest China. The estimated mean willingness to pay in the study area was 0.144 RMB/m3. A comparison showed that higher education and longer experience in farming were likely to result in a higher willingness to pay in the study area. Participants who had a higher awareness of water price reform showed a higher likelihood of agreeing to higher bidding. Those who thought the current water price was lower had a higher willingness to pay for irrigation water. Participants who considered agricultural water resources to be scarce in the area also had a higher willingness to pay. In contrast, the bidding variables were negative and significant at the 1% level, showing that participants were more inclined to reject a higher bid. Meanwhile, the older the participant, the less they were willing to pay. An unintended finding was that participants' willingness to pay decreased if they chose to use water-saving technology. One possible explanation was that the investment in the construction of the infrastructure (such as pipes and pumps) may have exacerbated farmers' burden and may not have resulted in any benefits to them. Based on the results of this paper, a related optimization policy was presented for water price reform.

Smallholder farmers’ willingness to pay for irrigation water: Insights from Eritrea

The role of irrigation water pricing as a signal for scarcity and opportunity cost of water, and financing tool for irrigation developments has been strongly upheld. While the ability and willingness to pay (WTP) of smallholder farmers for irrigation water could profoundly determine sustainability of irrigation projects, little empirical evidence exists about the consequences of irrigation water pricing based on direct survey of smallholder farmers’ WTP particularly from drier regions of the globe such as the Sahel. Here, we economically evaluate the consequences of irrigation water pricing through a direct survey of farmers’ WTP and the factors that affect farmers’ WTP for irrigation supply improvements. We collected unique data through a double-bound dichotomous-choice contingent valuation survey of smallholder irrigation farmers in Eritrea. Eritrea has set pricing guidelines designed to reflect irrigation water as an economic good, while the entire country is being swallowed by the ever-expanding Sahara desert as well as being home to globally the poorest smallholder farmers. Bivariate probit and logistic regression models were employed for data analysis and revealed: (1) some 54% of the farmers perceived water as an economic good; (2) about 76% of the farmers were willing to pay the initial offered bid for irrigation water; and (3) the average WTP of farmers was about 5% of average farm income. Our results further indicated that initial bid, land tenure security, age of a farmer, households’ income from irrigation farming and source of water being used are all significant determinants of farmers’ WTP for irrigation water supply improvement. Overall, our findings provide evidence that smallholder farmers are willing to pay for increased volumes of water for irrigation purposes and suggest that public-private partnerships for the storage and delivery of water for irrigation could be economically feasible, even in poor countries such as Eritrea.

Tourists’ Willingness to Pay Increased Entrance Fees at Mexican Protected Areas: A Multi-Site Contingent Valuation Study

It can be challenging to set protected area entrance fees without information on how much visitors are willing to pay. It is particularly difficult for agencies managing multiple sites to set fees without conducting surveys at each location. In order to examine how willingness to pay estimates would vary across sites with distinctive profiles, 877 visitors at five Mexican protected sites (Calakmul, Cobá, Palenque, Sian Ka’an, and Yum Balam) were interviewed through double-bounded dichotomous choice contingent valuation surveys. The results suggest that visitors would be willing to pay higher entrance fees, with mean maximum willingness to pay estimates of 2.8–9.8 times current fees, ranging from US$15.70 to US$25.83. Visitor demand was found to be relatively inelastic, with aggregate fee rises of 26% estimated to result in a 5% decrease in visitation. These results suggest that there is room to raise revenues through moderate fee increases without a concomitant drop-off in visitation.

Will South Korean Residential Consumers Accept the Renewable Heat Incentive Scheme? A Stated Preference Approach

In South Korea, renewable energy policy is mainly focused on electricity and tends to neglect renewable heat (RH). However, for the purpose of reducing greenhouse gas emissions, the heating sector must sharply switch from its use of conventional fuels to renewable sources. The South Korean Government is considering an RH incentive (RHI) program with financial and policy support schemes and is thus demanding information about residential consumers’ acceptance of the RHI program to expand the use of RH. Therefore, this study looked into residential consumers’ acceptance of the introduction of the RHI program by applying contingent valuation (CV). For this purpose, a CV survey of 600 interviewees was conducted using a dichotomous choice question format that asked a respondent if she/he is willing to pay a given amount. Furthermore, among the various dichotomous choice question formats, the one-and-one-half-bounded format, which is considered desirable in terms of efficiency as well as consistency, was applied. One point to note in analyzing the CV responses was that not a few interviewees had zero willingness to pay (WTP). Thus, a spike model was employed to deal with the dichotomous choice CV data with a number of zero observations. The results revealed that the household mean WTP amounted to KRW 5753 (USD 5.35) per year. If we look at this value from a national perspective, it is worth KRW 113.63 billion (USD 105.61 million) per year. This value corresponds to the economic value or benefits that the introduction of an RHI program provides to the South Korean people each year and needs to be compared to the costs that the introduction of RHI will incur.

Food quality vs food patriotism

Purpose The purpose of this paper is to investigate the role of perceived food quality and consumer ethnocentrism and potential trade-offs between these two concepts in Russian consumers’ food purchase decisions after the implementation of the Russian import ban. Design/methodology/approach Survey data were collected via in-person interviews in the City of Perm, which is one of the largest and most industrial cities in Russia. A double-bounded dichotomous-choice contingent valuation model is utilized to estimate willingness to pay (WTP) and to analyze factors that affect consumers’ choice. Findings The results suggest that most respondents do not consider domestically produced cheese as a risky product in terms of food safety but simply of lower quality than imported cheese. However, the average respondent’s WTP discount for domestic cheese compared to imported cheese is 8 percent, which is relatively small. This corresponds to participants’ opinion that buying domestic cheese is the right thing to do since it supports Russian farmers and producers. The results indicate further that with increasing education and income levels, individuals are less likely to prefer domestically produced cheese for either economic or quality reasons. This effect is stronger for the quality preference. Research limitations/implications The results indicate that if the Russian government aims at expanding the domestic food market further, more attention needs to be paid to ensuring the quality of domestic food products in order to increase consumer acceptance and WTP. Originality/value This is the first study providing empirical evidence on Russian consumers’ attitudes and perceptions of domestically vs imported food products after the implementation of the Russian import ban, which can be considered as an external policy shock.

Valuing the Environmental Costs of Local Development: Evidence From Households in Western Nepal

Environmental quality is rarely prioritized along the development pathways of developing countries, even though little is known about how individuals in these settings value intact environments. In 2017, we conducted a survey with a representative sample of 3660 households living throughout the Karnali and Mahakali River Basins in Western Nepal. As part of the survey, respondents were asked about how they use environmental services and participated in a double-bounded, dichotomous choice contingent valuation exercise designed to elicit their ability and willingness to pay (WTP) for a land conservation program that would prevent future development in and around their villages. We estimate the average monthly WTP for land conservation to be 202 NRs (US$1.96) and a lower bound of monthly household WTP to be 165 NRs (US$1.60). We find that households with higher levels of education exhibit higher willingness to pay; as do male respondents. We also find a significant negative relationship between household WTP and both migration and local NGO familiarity.

Willingness to pay for social health insurance and its determinants among public servants in Mekelle City, Northern Ethiopia: a mixed methods study

BackgroundOwing to lack of adequate healthcare financing, access to at least the basic health services is still a problem in Ethiopia. With the intention of raising funds and ensuring universal health coverage, a mandatory health insurance scheme has been introduced. The Community Based Health Insurance has been implemented in all regions of the country, while implementation of social health insurance was delayed mainly due to resistance from public servants. This study was, therefore, aimed to assess willingness to pay for social health insurance and its determinant factors among public servants in Mekelle city, Northern Ethiopia.MethodsA concurrent mixed approach of cross-sectional study design using double bound dichotomous choice contingent valuation method and qualitative focus group discussions was employed. A total 384 public servants were recruited from randomly selected institutions and six focus group discussions (n = 36) were carried out with purposively selected respondents. Participants’ mean willingness to pay (WTP) and independent predictors of WTP were identified using an interval data logit model. Qualitative data were analyzed using thematic analysis.ResultsFrom the 384 participants, 381 completed the interview, making a response rate of 99.2%. Among these respondents 85.3% preferred social health insurance and were willing to pay for the scheme. Their estimated mean WTP was 3.6% of their monthly salary. Lack of money to pay (42.6%) was the major stumbling block to enrolling in the scheme. Respondents’ WTP was significantly positively associated with their level of income but their WTP decreased with increasing age and educational status. On the other hand, a majority of focus group discussion participants were not willing to pay the 3% premium set by the government unless some preconditions were satisfied. The amount of premium contribution, benefit package and poor quality of health service were the major factors affecting their WTP.ConclusionThe majority of the public servants were willing to be part of the social health insurance scheme, with a mean WTP of 3.6% of their monthly salary. This was greater than the premium proposed by the government (3%). This can pave the way to start the scheme but attention should focus on improving the quality of health services.

Willingness to pay for a second-generation bioethanol: A case study of Korea

This article examines Korean consumer responses towards second-generation lignocellulosic bioethanol. Consumer surveys were conducted in the Korean cities of Seoul, Incheon, Bucheon, Gwangju, Seongnam and Suwon with three information treatments for the purpose of this study. The survey collected data on consumers’ willingness to pay (WTP) for this product, their driving patterns, knowledge about renewable energy, acceptance of relevant government policies, and demographic characteristics. A dichotomous-choice contingent valuation methodology is used to estimate WTP for this product and investigate factors that affect consumer choice. The findings include that the average respondent in the sample is willing to pay a 4.3% premium over second-generation bioethanol compared to conventional fuel. The mean premium is highest (6% premium) for respondents who received information about positive environmental effects of the advanced fuel. Being female and higher income positively affect WTP. Also higher self-reported knowledge about renewable energy sources and higher valuation of environmental friendliness positively affect WTP for advanced bioethanol.

Household’s Perception and their Willingness to Pay for Pesticides-Free Fruits in Khyber Pakhtunkhwa (Kp) Province of Pakistan: A Double-Bounded Dichotomous Choice Contingent Valuation Study

Household’s Perception and their Willingness to Pay for Pesticides-Free Fruits in Khyber Pakhtunkhwa (Kp) Province of Pakistan: A Double-Bounded Dichotomous Choice Contingent Valuation Study

Vietnamese Consumers’ Willingness to Pay for Safe Pork in Hanoi

Food safety is one of the main concerns and the biggest challenge for consumers due to its direct influence on human health. In order to deal with unsafe food situation, the demand for food hygiene has increased in recent years as well as the consequent increase in price accepted by consumers. This study aimed to estimate consumers’ willingness to pay (WTP) and to examine the determining factors influencing their WTP for safe pork using double-bounded dichotomous choice contingent valuation method (DBDC CVM). The data were collected from a survey with a sample size of 134 respondents in Hanoi, Vietnam using two sets of questionnaires on the consumption of rib and shoulder of pork. The results revealed that the percentages of the consumers willing to pay a premium for more hygiene shoulder and rib of pork were 81.75% and 73.01%, respectively. The mean WTP was 129,000 VND (US$6.07) for both safe shoulder and rib, 48.7% and 37.8% higher than the regular market price, respectively. The results showed that consumers’ awareness of the risk of unhealthy pork, household income and expenditure were the positive determinants to WTP; meanwhile, the amount of pork consumption per month negatively affected the willingness to pay more for shoulder and rib of pork.

How Much Are Insurance Consumers Willing to Pay for Blockchain and Smart Contracts? A Contingent Valuation Study

Blockchain is highly secure in design and can hand huge data efficiently. A smart contract, based on a blockchain, can automate the entire process and make the contract self-executing in nature. Since the first introduction of these technologies in the 1990s, they have been at the center interest for academia and industry. Numerous researchers and practitioners have investigated the principles and usage of blockchain and smart contracts. However, little is coincidental regarding estimating the consumer’s additional willingness to pay (WTP) and analyzing the relationship with socio-economic characteristics of the consumer for blockchain and smart contracts in the insurance sector. This study conducted the survey on 1000 heads of the household or homemakers who represent population well in South Korea and estimated additional WTP using one-and-one-half-bounded dichotomous choice contingent valuation (OOHB DC CV) method. About 65% of sample respondents answered they are willing to pay some additional premium for blockchain and smart contracts. The mean WTP has the value of KRW 28,425.43 (USD 25.38) and the median WTP is KRW 16,111.71 (USD 14.39). Those with high incomes, high education and more insurance contracts are more likely to pay extra for insurance policies using blockchain and smart contracts. Considering the total number of households in South Korea, the aggregated additional WTP is about 8 percent of the net income of the insurance industry in fiscal year of 2017. Consequently, strategic development of insurance products using block chains and smart contracts targeting educated consumers with high-income will increase the number of policyholders, which can in turn increase premium revenues.

Evaluating the demand for aquaculture insurance: An investigation of fish farmers' willingness to pay in central coastal areas in China

Despite the remarkable development in its fishery sector, the penetration rate of fishery insurance in China is considerably low. This paper examines the key factors that contribute to the poor performance of fishery insurance, in particular aquaculture insurance, in China. The double-bounded dichotomous choice contingent valuation method (DB DCCVM) is used to investigate fish farmers’ willingness to pay (WTP) for an insurance program, based on a survey of 1280 fish farmers in three coastal cities in China. The results indicate that fish farmers’ decisions on adoption of an insurance scheme depend on various factors, among which magnitude of loss, fish farmers’ awareness toward insurance and their education all have a positive impact. However, income and farming years are more likely to have a negative effect. In addition, the mean WTP for aquaculture insurance is estimated to be CNY 579 (US$ 90.05) 22The exchange rate of 1 US Dollar to Chinese Yuan was 6.43 on 18th June 2018 from Bank of China. per household, which is equivalent to 1.5% of fish farmers' mean annual income. These results provide several policy implications for not only the Chinese government but also researchers as well as insurance companies.

Biotechnology to sustainability: Consumer preferences for food products grown on biodegradable mulches

This study evaluates consumer preferences for an agricultural product grown on biodegradable mulch film, which is an environmentally friendly soil cover that sustains plant growth, but that avoids the environmental harm of plastic pollution from non-biodegradable mulches in the field or upon disposal. Using a dichotomous-choice contingent valuation method, we assessed the willingness to pay for strawberries grown on biodegradable mulch with a randomized information treatment on 1510 consumers across different regions of the United States. On average, consumers are willing to pay 10.3% more for food –strawberries in our case– grown on biodegradable mulches. Consumers who are female, earn a higher income, have stronger environment-friendly attitudes, or received the information treatment on the benefits of biodegradable mulches, also expressed more willingness to pay a premium price for strawberries grown on biodegradable mulches. Our findings support that consumers are willing to internalize a price premium for food products on biodegradable mulches, suggesting that agricultural producers could realize private benefits from price premiums that could, in turn, generate social benefits by increasing biodegradable mulch use, leading to a reduction of plastic pollution. By providing empirical evidence on the potential adoption of biotechnology in the food production system, our results allow agricultural crop producers to make more informed decisions on growing and pricing strategies. Our research will also facilitate agricultural scientists and policymakers to articulate industry-supporting policies for sustainable development.

Establishment of a New Urban Solid Waste Management Programs in Mazandaran Province, North of Iran

This study reports residents’ preferences to establish a new urban solid waste management programs results from a double-bounded dichotomous choice contingent valuation method and choice experiment in Mazandaran province, north of Iran. In order to analysis the residents’ preferences, a dichotomous hypothetical market and a choice sets with different attributes and options were used For estimation of two mentioned methods, the normal logit and conditional logit were applied. In addition, an empirical comparison of the welfare measures derived from the doublebounded DC-CVM and CE is conducted. The main results show that there is no significant difference between the values derived from the two methods. The mean of WTP to establish a new solid waste management programs in CV and CE were estimated 2.45 and 2.61 US$, respectively, per a person per a month. Also the estimated marginal WTP for all attributes in CE was 8.1 US$ per a month. The results suggest that both double-bounded DC-CVM and CE can be successfully stablished for improvement environmental level quality in Mazandaran province. This paper could provide the basis for further development of other new programs on sustainable urban management of solid waste in Mazandaran province.Keywords: Dichotomous choice, Willingness to pay, Solid waste management, Mazandaran province, Iran

다크 투어리즘 대상지 평화의 소녀상에 대한 경제적 가치추정 : 2단계 가상가치평가법(CVM) 활용

The purpose of its study is to evaluate the construction value of Statue of Peace through dichotomous choice contingent valuation method. This study used two steps approach in order to reduce hypothetical bias: the first step for hypothetical setting and the second step for real setting. Also, this study is to find explanatory variables that influence the probability of willingness to pay for construction funds for Statue of Peace. For this goal, onsite(211 sample) surveys were conducted. The outcomes of the study show that the construction value of Statue of Peace is estimated at KRW 48,649 per individual and its amount of total value to be KRW 2,519 billion. It also reveals that hypothetical setting overestimates to the willingness to pay for the construction funds for Statue of Peace as compared to the real setting. Finally, the outcomes of logit model reveal that demographic information, bid, patriotism, support, and involvement are critical explanatory components in estimating the probability of willingness to pay for the construction funds for Statue of Peace