Willingness To Accept Research Articles

“Smarter information, smarter consumers”? Insights into the housing market

This study explores how information helps housing consumers make informed decisions and discusses potential market outcomes. We analyse the interaction between the disclosure of information on property conditions and the disparity between home sellers' willingness to accept (WTA) and home buyers' willingness to pay (WTP). Three hypotheses are derived and validated through field experimental investigation within the property market. We find that a WTA–WTP disparity exists. The identified policy instrument for information disclosure appears to function as expected. The WTA–WTP disparity is considerably reduced after information disclosure, and market liquidity and efficiency are improved. This study is an important complement to prior research on how information changes the behaviour of consumers in housing markets. Findings can inform central governments about the wider benefits of smart disclosure in the future, as well as the scope, format and structure of information supplied to general housing consumers to promote efficiency.

MODEL EKONOMI-EKOLOGI BERDASARKAN WTP PENGUNJUNG-WTA MASYARAKAT LOCAL DALAM PENGELOLAAN DESTINASI WISATA PANTAI PULISAN KABUPATEN MINAHASA UTARA

The purpose of this research This research develops a management model of tourist destinations that integrates economic and ecological development based on the suitability of pay (WTP) of visitors with the willingness to accept (WTA) of the local community, which is supported by the role of business actors and the government. This research focuses on identifying existing economic and ecological conditions, analyzing and formulating alternative activities for economic and ecological improvement based on the willingness to pay (WTP) -willingness to accept (WTA) indicator. This research was conducted for 10 months from March to December 2018, in the tourist destination area of Pulisan Beach, North Minahasa Regency. The results of the study concluded that the willingness to pay (WTP) analysis tool to accept (WTA) can produce a choice of tourism activities and products that are desired by tourists and accepted by the local community with the support of the government and business actors. The choice of activities and products can ensure sustainable use of resources, by strengthening conservation principles. This instrument can be adapted for the management of other resources that confront economic interests, and preserve the environment and resources.

Effects of Food-Additive-Information on Consumers' Willingness to Accept Food with Additives.

This study tested whether information on positive food additives and negative food additives had an effect on consumers’ risk perception and their willingness to accept (WTA) food with additives. Consumers’ WTA was examined via a random nth-price auction of exchanging freshly squeezed orange juice without additives for orange juice with additives. Results show that consumers’ WTA differs with the order in which information was provided. Consumers are generally more sensitive to negative than positive information on additives. Female, middle-educated consumers are more susceptible to additive information and their WTA is more likely to change, while postgraduate-educated consumers are less sensitive to additive information. Consumers with higher food-safety satisfaction have lower WTA than those who are not satisfied with food safety. However, their satisfaction is easily affected by the negative-information intervention. Interestingly, consumers with relatively good knowledge of additives had higher WTA than those with no such knowledge. This study provides insight on how to establish effective food-safety-risk communication. Government and non-government agencies need to timely and accurately eliminate food-safety scares through the daily communication and disclosure of food-safety information, as well as prevent the misguidance of negative food safety-risk information.

Cost-utility analysis of telephone-based cognitive behavior therapy in chronic obstructive pulmonary disease (COPD) patients with anxiety and depression comorbidities: an application for willingness to accept concept

ABSTRACT Background: This study evaluated the cost-utility of telephone-based cognitive behavioral therapy (TB-CBT) (experimental arm) in comparison with a placebo-befriending (control arm) program in COPD participants with mild to severe depression and/or anxiety. Methods: The decision rule was based on willingness-to-pay if there is an increased unit of effectiveness (a quality-adjusted life year [QALY] gain) and an increase in cost, and willingness-to-accept (WTA) if there is a reduced unit of effectiveness (a QALY loss) and decrease in cost (a cost-saving). Results: TB-CBT group was associated with a reduction in the incremental cost of AUS−$407.3 (p < 0.001, SE:34.1) plus a negative, nonsignificant incremental QALY gain of −0.008 (SE:0.011) per patient compared to control group. The point estimate of the mean incremental cost-utility ratio was AUS$50,284.0 cost saving per QALY sacrificed (the high value associated with small QALY value in the denominator). Ninety-five percent CI was AUS$13,426 cost sacrificed to AUS$32,018 cost gain (lower values associated with larger QALY values in the denominator). If the societal’s minimum (flooring threshold) WTA is AUS$64,000 per QALY forgone, the probability of TB-CBT being cost-effective was 42% Conclusions: This study showed that TB-CBT can be recommended as a cost-saving and preventive approach over usual care plus befriending program.

Consumer Attitudes towards Industrial CO2 Capture and Storage Products and Technologies

This paper discusses and elicits consumer attitudes towards industrial carbon dioxide (CO2) capture and storage (ICCS) products and technologies. It presents a comprehensive review of the relevant research literature on consumer attitudes towards ICCS represented by the willingness-to-pay (WTP) and willingness-to-accept (WTA) negative externalities and outcomes of the carbon capture and storage (the so-called “not-in-my-backyard” (NIMBY) approach). In addition, it employs a concise empirical model that uses the data from the online questionnaire survey conducted in 7 European Union (EU) countries with and without ICSS sites. Our results demonstrate that having at least one ICCS site significantly reduces the WTA for the ICCS products and technologies. It is shown that further increase of ICCS sites, including those in the neighboring regions and countries, leads to the increase of negative consumer attitudes to the ICCS technologies and renewable energy policies. It becomes apparent that the majority of consumers are willing to support industrial CO2 capture and storage only if it happens far away from their dwellings. The outcomes of this paper might be informative for the EU local industries and policy-makers who are planning the location of ICCS sites and optimizing the public support for their endeavors. Moreover, they might be relevant for the stakeholders dealing with the threat of climate change and the necessity for the decarbonization of the economy.

The Monetary Value of Informal Care: Obtaining Pure Time Valuations Using a Discrete Choice Experiment

Interventions in health care often not only have an effect on patients, but also on their informal caregivers. Caregiving can have a profound impact on the health and wellbeing of carers. Ignoring these spillovers in economic evaluations risks labelling interventions mistakenly as cost-effective, at the expense of informal caregivers. This paper investigates willingness-to-accept (WTA) values for an hour of informal care, corrected for positive and negative impacts of informal care, to facilitate the inclusion of informal care hours on the cost side of economic evaluations without double-counting spillover effects. A discrete choice experiment (DCE) was conducted among a representative sample of the adult population in the Netherlands (n = 552) in September 2011. An experimental design minimizing the D-error was used to construct choice sets with two unlabelled alternatives with the attributes 'hours caregiving', 'monetary compensation for caregiving' and seven impacts of caregiving. To operationalize the random utility model, we used a panel mixed multinomial logit (MMNL) parameter model. For calculation of WTA, we used both population-level parameters and individual-level parameters. The mean WTA for an additional hour of informal care, corrected for positive and negative impacts of informal care, was €14.57. The signs of the coefficients were all in the expected directions. This study reports a preference-based monetary value for informal care, corrected for other impacts. This valuation facilitates the inclusion of informal care hours on the cost side in economic evaluations without double-counting any spillover effects included on the effects side.

Assessing Consumer and Producer Preferences for Animal Welfare Using a Common Elicitation Format

AbstractWe assess pig farmers’ willingness‐to‐accept (WTA) higher farm animal welfare (FAW) standards and consumers’ willingness‐to‐pay (WTP) for thus enhanced standards. The analysis is based on discrete choice experiments with nearly identical choice sets for both farmers (N=140) and consumers (N=554). Based on preference estimates from a random parameter logit (RPL) model, supply and demand curves for high‐welfare pork in Germany are estimated and market equilibria are derived for alternative levels of FAW. We find that estimates of consumer WTP are significantly positive for all FAW attributes: consumers value more surface space per pig, more bedding and manipulable material, less surgical interventions and shorter transportation times. In contrast, our model revealed significant producer WTA estimates only for surface area per pig and the amount of bedding material on offer, but not for the other FAW attributes. Farmers who expect to continue farming and engage in direct marketing are more likely to adopt higher FAW standards. Male consumers and those who find price more important than brand, origin or taste are less likely to buy high‐welfare pork, as are consumers who never purchase organic meat products. Market simulations for high‐welfare pork indicate increasing divergence between demand and supply with rising FAW standards. We estimate a market share of 44.6% for pork produced in compliance with an entry‐level FAW programme with standards only slightly above the legal minimum. Programmes with more demanding standards are estimated to gain much smaller market shares.

Individuals' valuation of a publicly provided private good evidence from a field study

ABSTRACTThis paper assesses the Willingness to Pay (WTP) for a publicly provided bike sharing service whose costs are in large part covered by the municipality of Vienna, Austria. The following characteristics render it valuable for analyses: the possibility to free ride, a (perceived) positive externality of use, negligible income effects, perfect substitutability, and the credibility of valuation scenarios. We also address the disparity between Willingness to Accept (WTA) and WTP, and we find a mean WTP of EUR 1.2 for the bike sharing system and a disparity of 2:1 (WTA to WTP). Female participants as well as respondents who condition their valuation on those of others are willing to contribute more; and surprisingly those who actually use the bike sharing system as well as environmentally concerned respondents have a lower WTP. This Environmental Concern Paradox can be explained by an incorporation of positive externalities into individual valuation decisions.

Payments for environmental services to strengthen ecosystem connectivity in an agricultural landscape

AbstractThis article investigates the use of payments for environmental services to support a wildlife corridor between two Priority Tiger Conservation Landscapes in central Sumatra, Indonesia. Several hundred smallholders operate within a Protection Forest linking the Tiger Conservation Landscapes. This study explores the willingness of these smallholders to accept a payment requiring them to forgo access to their land for five years. In addition to asking households directly what they would be willing to accept (WTA), we also ask them to infer what their neighbour would accept. The study finds evidence of hypothetical bias in the conventional WTA values, with a statistically significant difference between what people say they would be willing to accept when surveyed, compared to what they say would actually be willing to accept in a ‘real life’ situation. We show how inferred valuation techniques can mitigate against this.

Effects of Land Tenure and Property Rights on Farm Households’ Willingness to Accept Incentives to Invest in Measures to Combat Land Degradation in Nigeria

Influence of land tenure and property rights (LTPRs) on farmers’ willingness to accept (WTA) incentives to embrace climate-smart agriculture (CSA) to combat land degradation was examined with choice experiment data collected from 1,138 farmers drawn across 16 States in Nigeria. Data analysis within random-effect and mixed logit framework revealed the existence of strong linkages between the payment vehicle, LTPRs and farmers’ CSA preferences. While farmers who were dependent on leased and/or communal lands expressed implicit dislike for CSA-related investments, the majority with freehold titles, particularly those with registered titles, expressed positive WTA incentives to embrace CSA and combat land degradation.

Mitigating Public Concerns About Recycled Drinking Water: Leveraging the Power of Voting and Communication

AbstractThis research studies the perceptions of individuals concerning reused drinking water. Individuals' visceral responses may stigmatize reused water as the water's immediate origin is too clear. In this context, we show how individuals grow more accepting of reused water when their decisions consider others, as opposed to just themselves. First, differences between private and public decision making are quantified using willingness to accept (WTA) data collected in economic experiments. Adult participants first made decisions in a second‐price auction (private rounds) followed by majority‐rule voting (public rounds) on the median price collected in the private rounds. Our results show that participants in the public rounds significantly reduce their WTA. Moreover, a communication treatment using chat boxes further reduced participants' WTA. The recorded chat indicated that particularly messages related to humor and persuasion were powerful influences on participants' voting decisions. The results have applications for sustainable, cost‐effective recycled water projects.

How to Protect Entitlements: An Experiment

AbstractWe study the effects of legal protection on the likelihood of efficient trade. Fairness norms that affect the parties’ willingness to pay (WTP) and willingness to accept (WTA) may depend on...

Can stated measures of willingness-to-accept be valid? Evidence from laboratory experiments

Willingness-to-accept (WTA) questions have been largely abandoned in stated preference empirical work in favor of eliciting willingness-to-pay (WTP) responses, mainly due to perceived unreliability of questions that ask respondents for compensation amounts. This paper reassesses whether stated WTA welfare measures can be valid in public and private good contexts. We conduct two sets of laboratory experiments to analyze whether elicitation format, survey design and framing, and follow-up questions can generate truthful responses. For public goods, we adapt the existing WTP incentive compatibility theoretical framework to the WTA context and test the theory using an experiment involving voting. Results are consistent with the WTP literature and suggest that WTA values can be valid as long as responses have consequences for respondents. For the private good experiment, we focus on whether respondents are motivated to affect the price or the provision of the good. We find that strategic behavior is present and in the direction expected by theory. Survey framing and the use of follow-up questions can provide bounds on the value estimates. These findings raise potential concerns with the use of non-incentive compatible elicitation mechanisms in WTA contexts.

Time Is Money: Investigating the Value of Leisure Time and Unpaid Work.

Lost unpaid work and leisure time of patients due to ill health often are not included in economic evaluations, even in those taking a societal perspective. This study investigated the monetary value of unpaid work and leisure time to enable the inclusion of patient time in economic evaluations. A contingent valuation study was performed to derive monetary values of unpaid work and leisure time. Data were collected with an online survey among a representative sample of people 18 years and older in the Netherlands in terms of age, sex, and educational level in January 2014 (n = 316). Willingness-to-accept (WTA) and willingness-to-pay (WTP) values were analyzed with a two-part model. First, a logistic regression model investigated the willingness to trade in the WTA/WTP tasks. Second, a log-transformed ordinary least squares regression model analyzed the level of positive WTA and WTP values. The average WTA value for unpaid work was €15.83, and the average WTA value for leisure time was €15.86. The mean WTP value for leisure time was €9.37 when traded against unpaid work, and €9.56 when traded against paid work. Differences in monetary values of unpaid work and leisure time were partly explained by respondents' income, educational level, age, and household composition. Researchers can adhere to the societal perspective by also including the value of hours of lost unpaid work and leisure time in economic evaluations. As a first indication of its value, we suggest applying the WTA value of €16.

E-commerce in agriculture – The case of crop protection product purchases in a discrete choice experiment

The internet is playing an increasing role in the development of rural areas. Farmers in particular, can benefit from new opportunities concerning farm management decisions. Hence, the goal of this study was to investigate German farmers’ willingness to accept (WTA) e-commerce. Primary data of 165 farmers was collected by conducting a discrete choice experiment about the purchase of crop protection products. WTA estimates show that farmers are willing to switch to an online merchant if they are offered a significantly lower price. However, word-of-mouth-reputation and consultation offered via traditional media do not influence farmers’ WTA for an online merchant. In contrast, delivery time significantly affects farmers’ WTA for inputs purchased online. We also show that farmers’ risk attitudes, prior online shopping experiences, and education are influential factors for the WTA for an online merchant. Surprisingly, age and farm size do not impact farmers’ WTA. Since e-commerce has not been widely established in agriculture yet, these results are of great practical importance. The findings of this study demonstrate that online merchants of agricultural inputs should focus on trust, service quality and timely delivery. Furthermore, it might be useful to introduce farmers to e-commerce during their education.

Contingent Valuation Studies in Orthopaedic Surgery: A Health Economic Review.

A greater emphasis on providing high-value orthopaedic interventions has resulted in increased health economic reporting. The contingent-valuation method (CVM) is used to determine consumer valuation of the benefits provided by healthcare interventions. CVM is an important value-based health economic tool that is underutilized in orthopaedic surgery. The purpose of this study was to (1) identify previously published CVM studies in the orthopaedic literature, (2) assess the methodologies used for CVM research, and (3) understand how CVM has been used in the orthopaedic cost-benefit analysis framework. A systematic review of the literature using the MEDLINE database was performed to compile CVM studies. Search terms incorporated the phrase willingness to pay (WTP) or willingness to accept (WTA) in combination with orthopaedic clinical key terms. Study methodology was appraised using previously defined empirical and conceptual criteria for CVM studies. Of the 160 studies retrieved, 22 (13.8%) met our inclusion criteria. The economics of joint arthroplasty (n = 6, 27.3%) and non-operative osteoarthritis care (n = 4, 18.2%) were the most common topics. Most studies used CVM for pricing and/or demand forecasting (n = 16, 72.7%); very few studies used CVM for program evaluation (n = 6). WTP was used in all included studies, and one study used both WTP and WTA. Otherwise, there was little consistency among included studies in terms of CVM methodology. Open-ended questioning was used by only ten studies (45.5%), a significant number of studies did not perform a sensitivity analysis (n = 9, 40.9%), and none of the studies accounted for the risk preference of subjects. Only two of the included studies applied CVM within a cost-benefit analysis framework. CVM is not commonly reported in orthopaedic surgery and is seldom used in the context of cost-benefit analysis. There is wide variability in the methods used to perform CVM. We propose that CVM is an appropriate and underappreciated method for understanding the value of orthopaedic interventions. Increased attention should be paid to consumer valuations for orthopaedic interventions.

Unraveling determinants of inferred and stated attribute nonattendance: Effects on farmers’ willingness to accept to join agri‐environmental schemes

AbstractAttribute nonattendance (ANA) has received very little attention in the context of willingness to accept (WTA), although an increasing number of studies analyze the preferences of ecosystem service providers toward incentive‐based schemes. We add to the understanding of ANA behavior by analyzing stated and inferred ANA in a choice experiment investigating farmers’ WTA for participating in agri‐environmental schemes (AES) in southern Spain. We use mixed logit models, following Hess and Hensher for the inferred ANA approach. Evidence is found of ANA behavior for both stated and inferred approaches, with models accounting for ANA clearly outperforming those that do not account for it; however, we produce no conclusive results as to which ANA approach is best. WTA estimates are only moderately affected, which to some extent is consistent with the low level of non‐attendance found for the monetary attribute. Stated and inferred approaches show very similar WTA estimates. Additionally, we investigate sources of observed heterogeneity related to ANA behavior by using a sequence of bivariate probit models for each attribute. Overall, our results hint at a positive relationship between ease of scheme adoption and nonattendance to attributes. However, further research is still needed in this field.

Risk Aversion: The Need for Behavioral Explanation(s)

Expected utility theory (EUT) is a parsimonious theory that explains behavior under risk and uncertainty. Previous research showed that EUT of wealth is not a satisfactory explanation of risk aversion. We use empirical data from a controlled laboratory experiment to show that EUT of income cannot explain risk aversion either. The experimental data suggests that the marginal utility of money would decrease at an absurdly high rate if the concavity of Bernoulli utility function is used to explain risk aversion. We demonstrate that loss aversion together with probability weighting explain the observed risk aversion well. Unlike many previous studies, we elicit valuations-Willingness to Pay (WTP) and Willingness to Accept (WTA)-for risky prospects to make the reference points more salient. Using an empirical model that features reference-dependent preference, we further show that our identi cation is robust to changes in reference points. The obtained parameters from estimating the structural model are consistent with literature.

Games between stakeholders and the payment for ecological services: evidence from the Wuxijiang River reservoir area in China

A gambling or “game” phenomenon can be observed in the complex relationship between sources and receptors of ecological compensation among multiple stakeholders. This paper investigates the problem of gambling to determine payment amounts, and details a method to estimate the ecological compensation amount related to water resources in the Wuxijiang River reservoir area in China. Public statistics and first-hand data obtained from a field investigation were used as data sources. Estimation of the source and receptor amount of ecological compensation relevant to the water resource being investigated was achieved using the contingent valuation method (CVM). The ecological compensation object and its benefit and gambling for the Wuxijiang River water source area are also analyzed in this paper. According to the results of a CVM survey, the ecological compensation standard for the Wuxijiang River was determined by the CVM, and the amount of compensation was estimated. Fifteen blocks downstream of the Wuxijiang River and 12 blocks in the water source area were used as samples to administer a survey that estimated the willingness to pay (WTP) and the willingness to accept (WTA) the ecological compensation of Wuxijiang River for both nonparametric and parametric estimation. Finally, the theoretical value of the ecological compensation amount was estimated. Without taking other factors into account, the WTP of residents in the Wuxi River water source was 297.48 yuan per year, while the WTAs were 3864.48 yuan per year. The theoretical standard of ecological compensation is 2294.39–2993.81 yuan per year. Under the parameter estimation of other factors, the WTP of residents in the Wuxi River water source area was 528.72 yuan per year, while the WTA was 1514.04 yuan per year. The theoretical standard of ecological compensation is 4076.25–5434.99 yuan per year. The main factors influencing the WTP ecological compensation in the Wuxi River basin are annual income and age. The main factors affecting WTA are gender and attention to the environment, age, marital status, local birth, and location in the main village.

Factors influencing willingness to accept in the paddy land-to-dry land program based on contingent value method

Abstract The Paddy Land-to-Dry Land (PLDL) program, which is a representative example of payment for watershed ecosystem services, has played a critical role in protecting the source of the Beijing Municipality's water supply in the Miyun Reservoir watershed since 2006. Previous studies have evaluated the program's benefits and costs and confirmed its positive impacts. However, local farmers' Willingness to Accept (WTA) for compensation, its impact factors and relevant policies, which are key factors determining its successful implementation, have not been analyzed. In this paper, a hypothesis argues that positive ecological impacts could lead to decreasing WTA values, whereas negative ecological effects could lead to increasing values. The study areas comprised three counties in Hebei Province and one district in Beijing Municipality. A total of 391 randomly selected farmers (with a response rate of 92%) participated in a face-to-face questionnaire-based survey. The contingent valuation method was applied as the main analytical tool for evaluating nonmarket environmental goods or services. Interval regression of the Tobit model was applied to analyze WTA impact factors and was validated using a logit model. The study's findings confirmed the positive effects of the PLDL program, but they did not confirm the lower WTA values that were hypothesized in the study areas. This disparity between the hypothesis and survey results can be explained in three dimensions: environmental, economic, and social. First, environmental awareness had a strong positive correlation with WTA. Respondents who valued environmental protection above economic development required higher compensation. Second, respondents' gender and household's incomes were closely related to their environmental awareness, but were not directly related to the dependent variable of WTA. Third, respondents whose degree of equity relating to the program was lower than that of others required a higher payment. Moreover, an ecological service (ES) provider's age and WTA were negatively related, younger respondents demanded a higher value for payment-related WTA in the study areas. Therefore, policymakers' decisions regarding ecological compensation should evidently take into account WTA impact factors in the PLDL program, especially ES providers' ages, their environmental awareness, and the degree of equity that they have.