Stated Preference Analysis Research Articles

Disentangling preferences and expectations in stated preference analysis with respondent uncertainty: The case of invasive species prevention

Contingent valuation typically involves presenting the respondent with a choice to pay for a program intended to improve future outcomes, such as a program to place parcels into conservation easement, or a program to manage an invasive species. Deducing from these data the value of the good (or bad) at the core of the program – the welfare gain generated by a parcel of conserved land, for instance, or the loss incurred by a species invasion – often is not possible because respondent preferences are conflated with their expectations about future environmental outcomes in the absence of the program. This paper formally demonstrates this conundrum in the context of a standard contingent valuation survey, and examines the use of additional survey data to resolve it. The application is to the prevention of lake invasions by Eurasian Watermilfoil (Myriophyllum spicatum), an invasive aquatic plant that is present in many lakes in the northern U.S. and Canada and a possible threat to many more. Respondents are shoreline property owners on lakes without Eurasian Watermilfoil. The estimated per-property welfare loss of a lake invasion is $30,550 for one model and $23,614 for another, both of which are in reasonable agreement with estimates obtained from a recent hedonic analysis of Eurasian Watermilfoil invasions in the study area [16], and from a companion contingent valuation survey of shoreline property owners on already-invaded lakes.

Using Stated Preference and Prior Purchase Intention in the Estimation of Willingness to Pay a Premium for Genetically Modified Foods

ABSTRACTThis study provides an appropriate analytical approach using stated preference analysis and the contingent valuation method to investigate consumers’ willingness to pay a premium for genetically modified (GM) foods together with their prior purchase intentions. Although most analyses treat consumers’ attitudes and willingness to pay as separate issues, we introduce the idea of prior purchase intention to analyze these two issues as a whole. To achieve this purpose, a modeling technique invoking the multinomial logistic model and the accelerated failure time model is presented. Based on the data collected from an essential double‐bounded design, our empirical results suggest that Taiwanese consumers are willing to pay a premium of about 11NTdollars (7% of the given average market price of 150NTdollars for the non‐GMsalmon) to avoidGM‐soybean‐fed salmon. In addition, the results of this study provide evidence that our stated‐preference double‐bounded design has a better‐off statistical efficiency than the single‐bounded one.

Network effects and preference heterogeneity in the case of mobile telecommunications markets

This paper demonstrates how revealed- and stated-preference analyses can be used for modeling network effects in the field of mobile telecommunications. The aim of this study was to verify if network effects may still play a role in the Polish mobile telecommunications market, measure their strength, identify their sources and variability across consumers by accounting for consumers' observable and unobservable preference heterogeneity, evaluate their monetary value to consumers, and finally, to verify if the marginal utility associated with network effects is constant. The analysis of consumers' revealed choices (currently used mobile telephone operator) allowed the identification of major differences between customer bases of incumbent and new entrant operators, and insight into the business strategies adopted in the presence of asymmetric regulation of mobile termination rates. The second part of the study—the analysis of the consumers' stated choices (made in carefully prepared and designed hypothetical choice situations, known as the choice experiments) made it possible to directly model consumers' utility functions and, in this way, investigate the nature of network effects in mobile telecommunications markets. From the results, the presence of strong network effects, which are related to the ratio of consumers' social network group using the same operator, and to the magnitude of on-net price discounts, is confirmed. These network effects can be disaggregated to pecuniary and non-pecuniary effects. Through the utilization of the random parameters multinomial logit model, consumers' observable and unobservable preference heterogeneity can be accounted for, which proved a scientifically revealing and potentially policy-relevant approach. The results might be of a particular interest to other researchers aiming at modeling consumers' preferences as well as to mobile telephone operators and regulatory authorities—it is shown that capacity for vigorous price competition between mobile operators is limited by non-price factors, which affect subscriber's choices, especially in the presence of asymmetric mobile termination rates.

Risk perception and evacuation decisions of Florida tourists under hurricane threats: a stated preference analysis

Though most hurricane evacuation studies have focused on residents, tourists are also a vulnerable population. To assess their perceptions of risk and evacuation likelihood under different hurricane conditions, we surveyed 448 tourists visiting central Florida. Respondents viewed four maps emulating track forecast cones produced by the National Hurricane Center and text information featuring variations of storm intensity, coast of landfall, centerline position relative to the survey site, time until landfall, and event duration. We performed chi-square tests to determine which hurricane conditions, and aspects of tourists such as their demographics and previous hurricane experience, most likely influenced their ratings of risk and evacuation likelihood for respondents located on Pinellas County beaches or inland near Orlando, FL. Highly rated scenarios featured a Category 4 hurricane making landfall along the Gulf Coast with the centerline passing over the sampling site. Overall, tourists that indicated the highest risk and evacuation ratings were not previously affected by a hurricane, had a trip duration of less than 6 days, and had checked for the possibility of a hurricane strike before departure. However, results for other tourist attributes differed between tourists in coastal and inland locations. We found that although somewhat knowledgeable about hurricanes, tourists misinterpreted the track forecast cone and hurricane conditions, which led to a lower perception of risk and subsequent likelihood to evacuate. Tourists, particularly those from outside of Florida, need to be better educated about the risks they face from hurricanes that make landfall.

Propensity to Switch to a New Bus Service in Phnom Penh Using Stated Preference Analysis

Propensity to Switch to a New Bus Service in Phnom Penh Using Stated Preference Analysis

Agricultural Producers and the Environment: A Stated Preference Analysis of Colorado Corn Producers

This paper analyzes Colorado corn producers’ preferences over both private- and environmental public-good production system attributes, and tests the robustness of alternative data reconstruction and estimation techniques. Irrigated corn production practices are characterized by intensive water and chemical use, resulting in nonpoint source pollution to water bodies as well as soil erosion problems. Data from a stated preference survey are employed to analyze key attributes of experimentally configured irrigation systems, proposed as alternatives to current practices. Panel mixed logit estimations (and several alternative fixed parameter specifications) uncover consistently positive preferences for profit, risk reduction, and, importantly, systems with less environmental impact in terms of nitrate leaching and soil erosion. The analysis also finds evidence of preference heterogeneity and a complementary relationship between the two environmental attributes. Analysis of this kind can be used by policy makers to predict behavioral responses associated with introduction of new technologies, or to assess welfare implications of agricultural policy changes and stricter environmental regulations. Dans le present article, nous avons analyse les preferences des producteurs de mais du Colorado concernant les attributs des systemes de production de biens environnementaux publics et prives et avons verifie la robustesse des techniques de rechange pour la reconstruction et l’estimation des donnees. Les pratiques de production de mais irrigue sont caracterisees par l’utilisation intensive d’eau et de produits chimiques qui entraine une pollution diffuse des plans d’eau ainsi que des problemes d’erosion du sol. Nous avons utilise des donnees tirees d’un sondage sur les preferences declarees pour analyser les principaux attributs des systemes d’irrigation experimentaux proposes comme solutions de rechange aux pratiques actuelles. Les estimations du modele mixte logit (et plusieurs specifications de parametres fixes) ont permis de decouvrir des preferences uniformement positives concernant les profits, la reduction des risques et les systemes ayant moins d’impact environnemental du point de vue du lessivage des nitrates et de l’erosion du sol. L’analyse a egalement montre l’heterogeneite des preferences et l’existence d’un lien complementaire entre les deux attributs environnementaux. Les decideurs pourraient utiliser ce genre d’analyse pour prevoir les reactions comportementales liees a l’introduction de nouvelles technologies ou pour evaluer les repercussions des changements de politique agricole et des reglements environnementaux plus stricts sur le bien-etre.

Analysis of the environmental benefits of a motorcycle idling stop policy at urban intersections

In an attempt to reduce CO2 emissions from motorized transport, the Taiwanese government introduced an idling stop policy for vehicles in early 2007. This paper seeks to quantify the environmental benefits of the policy based on a stated preference analysis. Motorcyclists were surveyed at urban intersections in Taiwan, to identify the amount of time they would be willing to turn off their engines while waiting at traffic lights (the WTO). A contingent valuation framework based on stated preference questions was designed to determine the WTO. Results obtained from the Spike model showed that the average motorcyclist’s WTO is 82 s. In another analysis, in which other variables were taken into consideration, such as the possibility that the policy will be enacted as legislation, the expected WTO increased to 101 s. In both cases, an idling stop policy would have positive environmental effects, reducing gasoline usage by 1021 L per hour and reducing CO2 emissions by 0.56 metric tons per hour at the intersection studied during peak periods.

A stated preference analysis comparing the Analytical Hierarchy Process versus Choice Experiments

Our paper compares individual preferences for attributes and levels of an agro-food product using two different methodologies. A key question is whether different results are obtained when asking consumers what they “prefer” versus what they would “buy”. Within this context, we compare empirical results obtained from Choice Experiments (CE) versus the Analytical Hierarchy Process (AHP) due to their capacity to simulate the “purchasing” and “theoretical” stated preferences, respectively. We utilize a survey of restaurateurs’ stated preferences to include rabbit meat in their menus in Catalonia (Spain) in this exploratory study. Results demonstrate similarities and differences in the stated preferences for attributes and attribute levels with a 55.6% coincidence in their ranking between methods. Utility variation between levels in both approaches follows a similar shape for two of the three analyzed attributes.

Collecting public transport passenger preference data online

Passenger preference analysis is an important area of transport modeling. Passengers value public transport journeys in several ways: their opinion depends on many factors. The relative importance of these features is often characteristic to certain passenger groups. Knowing the distribution of the passengers and their preferences makes it possible to improve transport models and simulation techniques. The paper provides an overview of existing revealed and stated preference analysis methods and the results of some former surveys carried out in Győr, Hungary. Then it proposes a new method for detecting passenger preferences by integrating data collection into an online journey planning service.

An stated preference analysis of Spanish freight forwarders modal choice on the south-west Europe Motorway of the Sea

This paper aims to contribute towards the design of effective freight transport policy by means of empirical analysis. In order to do so, a stated preference survey is undertaken to model the modal choice between door-to-door road transport and short sea shipping in the Motorway of the Sea of south-west Europe. The proposed analysis will provide policymakers with the necessary tool to identify the critical areas that should be addressed by future policy action in order to boost short sea shipping on Spain's Mediterranean coast. By applying the proposed method, we will be able to obtain estimates of the subjective values of transport attributes – value of time, value of reliability and value of frequency – in freight transport, values for which barely any empirical evidence on a national scale exists. Quantifying such values is a key part of the cost benefit analyses performed when evaluating transport projects.

Willingness to Pay for Multifunctional Megaprojects: A Stated Preference Analysis Among Firms in the Amsterdam Zuidas Area

Urban (re-)development projects may generate various positive and negative spatial externalities to employers. The assessment of such benefits is fraught with many methodological and empirical problems. This study aims to assess the order of magnitude of expected net benefits for incumbent employers that may accrue from a large-scale development project in the Zuidas area in the South-Western part of Amsterdam, the Netherlands. This development project is planned to transform the area into a large multifunctional urban agglomeration. We employ a specific stated preference method (namely, a willingness-to-pay method) to gauge the project's net socio-economic benefits for the current firms in the area concerned, paying special attention to the benefits associated with multifunctionality.

An ex post analysis as a followup to stated preferences for management strategies in Nevada's Black Rock Desert

Nevada's Black Rock Desert in High Rock Canyon (BRD/HRC) provides a variety of recreation services to a multitude of user groups, which makes the development of a management plan for the area a challenge. Stated preference analysis is a widely accepted method for analysing resource management plans; however, resource users with heterogeneous preferences make it difficult to estimate an empirical choice model across all user types. This study introduces an ex post analysis of attribute preferences by introducing a conjoint experiment with a set of follow‐up questions in order to better understand how visitors to the BRD/HRC feel about various management plans. The cost of data collection for the follow‐up questions is low, while their ability to provide explanatory power of choice behavior is significant.

What Does it Take for Shuttles to Succeed?: Comparison of Stated Preferences and Reality of Shuttle Success in New Jersey

In 1998, New Jersey Transit (NJ Transit) conducted an onboard survey of passengers on three of its commuter rail lines on their preferences for new shuttle services. During the first half of the 2000s, community-based shuttle service was introduced in several New Jersey communities—many under the federal Congestion Mitigation and Air Quality Improvement Program. Some of these services continue today, but others were discontinued. This study uses data from the onboard survey to identify the rider characteristics and spatial characteristics of communities that influence stated preferences for shuttle service to rail stations. Correlation analysis, factor analysis, and logistic regression are used to identify these characteristics. With the use of results from the stated preference analysis, the communities where shuttle service has continued were compared with communities where service has been discontinued, to identify the factors that may influence the shuttle's success. The analysis of stated preferences and the comparison of communities suggest that concentration of immigrant populations, non-English speakers, and persons with moderate income may be important for the success of shuttles in the study area. Sporadic evidence was found that parking costs and availability of parking at stations may influence people's decision to use shuttles. Similar evidence is found indicating that people with high incomes, people who live close to stations, and people who already use rail transit regularly may be indifferent to new shuttle service.

How Sensitive are Retirement Decisions to Financial Incentives: A Stated Preference Analysis

We study effects of financial incentives on the retirement age using stated preference data. Dutch survey respondents were given hypothetical retirement scenarios describing age(s) of (partial and full) retirement and replacement rate(s). A structural model is estimated in which utility is the discounted sum of within period utilities that depend on employment status and income. Parameters of the utility function vary with observed and unobserved characteristics. Simulations show that the income and substitution effects of pensions as a function of the retirement age are substantial and larger than according to studies using data on actual retirement decisions.

Propensity to Switch to a New Bus Service in Phnom Penh using Stated Preference Analysis

Propensity to Switch to a New Bus Service in Phnom Penh using Stated Preference Analysis

Exploring passenger preferences in airline service attributes: A note

This paper examines passengers' valuations on airline service attributes using stated preference analysis in the direct flight air market between Taiwan and China. An experiment design reflecting the characteristics of low cost airlines is used to collect stated preference data from Taiwanese air passengers. Empirical results reveal not only the implicit values of service attributes but also the preference differences in attributes between business and non-business travelers.

Stated preference analysis of a new very light jet based on-demand air service

This paper develops behavior models to analyze traveler propensity towards a new “very light jet”-based on-demand air service (ODAS), also labeled air taxi service, with the broader objective of providing guidance for the enabling stakeholders including business operators, policy-makers and aircraft manufacturers. The models predict the probability of individuals switching from their usual preferred mode of intercity transportation (up to 960 km) to the ODAS under a range of scenarios in terms of travel distance and cost. Travel distance, service fare, and level of accessibility are identified as key determinants of the viability of the ODAS. Analysis of the models provides insights for operational/business strategies in the private sector (both for aircraft manufacturers and the ODAS operators), for policy-making in the public sector, and for understanding the potential barriers to the evolution of ODAS as a viable intercity travel option.

Monetizing the Benefits of Risk and Environmental Regulation

This article provides a response to the opponents of monetization of risk and environmental benefits, such as the authors of Priceless: On Knowing the Price of Everything and the Value of Nothing. Putting benefit values in dollar terms ensures that there will be full recognition of these benefits in the policy evaluation process, and also places them on terms comparable to program costs. Much of the article is devoted to advocating the use of the value of statistical life to value health risk reductions from government regulations. The article explores sensitive issues such as the heterogeneity of the value of statistical life with respect to income and age. While the use of a senior discount was controversial and involved too great of a discount, there is substantial evidence that there are age variations in the value of statistical life. The article also advocates the continued use of stated preference approaches to valuing environmental benefits, which is in contrast to the critiques of stated preference analyses by those who consider environmental resources to be priceless and by those who believe that all non-use values of environmental benefits are zero.

Cost credibility and the stated preference analysis of public goods

Two recent stated preference studies include questions that explore participants’ beliefs regarding the cost amount stated in the valuation question in relation to the cost to them if the project were implemented. Results from these studies suggest that a significant proportion of people do not believe these stated cost amounts. This paper explores the implications of participants answering valuation questions that are not consistent with their beliefs regarding stated costs. As an example, the paper develops a response model for dichotomous choice stated preference questions. Participants gather project information through the stated preference experiment, form a prior distribution of costs, update the distribution of costs based on a survey's stated cost and then respond to the dichotomous choice stated preference question. The model suggests that participants will not generally respond truthfully in the sense that they may say no to a stated cost that is less than their willingness to pay for a project or yes to a stated cost that is more than their willingness to pay. While the model findings suggest potentially serious problems with stated preference estimation, the observed patterns of disbelief from the empirical studies result in downwardly biased estimates of mean willingness to pay.

Choice modeling at the “market stall”: Individual versus collective interest in environmental valuation

The market stall, or valuation workshop, has recently been proposed as a way of addressing some of the limitations of conventional stated preference analysis. In this paper, we attempt to combine a participatory technique similar to the “citizens' jury” with choice modelling, a stated preference technique increasingly being applied in environmental economics. Our focus is on how changes in the context of decision-making (between choices made in isolation and those made in a group setting, and between choices made on individual well being versus collective criteria) produce differences in estimated welfare measures. The empirical context used is that of water quality improvements under the Water Framework Directive, the most significant reform in water legislation in the European Union for many years. We find that the choice experiment format can be successfully implemented in a valuation workshop and that moving from individual to collective choice produces, in this instance, a rather interesting change in both values and preferences which depends on the respondent's interests.