Willingness To Pay Estimates Research Articles

The temporal stability of WTP estimates for the emissions reduction using the contingent valuation survey in Queensland, Australia

The temporal stability of willingness to pay (WTP) estimates, from contingent valuation method (CVM) surveys, is required for reliable benefit transfer. While there have been numerous tests of the temporal stability of WTP estimates over a short time period, the evidence of the stability of WTP estimates over a long time period is limited. In this study, the temporal stability of WTP estimates for the emissions reduction over a ten-year period in Queensland, Australia is assessed. The first survey was conducted in 2009 at the end of the global financial and economic crises. The second survey was conducted in 2018 when the economic background changed significantly. The paper is focused on two main questions: (1) whether WTP is stable over a long time period under the changes in the background economic conditions and (2) if WTP is not stable, whether it is due to changes in socio-economic characteristics or underlying preferences. The results indicate that CVM estimates of WTP for emission reduction are stable over a ten-year period even after changes in underlying socio-economic conditions. However, care should be taken when transferring the estimates under the changes in the business cycle due to possible changes in WTP distribution.

Household willingness to pay for stream restoration on private and public land: Evidence from the Baltimore metropolitan region

AbstractStream restoration is one of the most widely used interventions to mitigate urban stormwater impacts and improve water quality. Government agencies have typically focused urban stream restoration efforts on public lands that they already own, even though a substantial portion of stream miles in highly urbanized areas occur on privately owned land. Yet, limited research exists to distinguish household willingness to pay (WTP) for stream restoration occurring on private versus public land. In this study, we use a choice experiment to analyze how household WTP for stream restoration attributes vary by land ownership and distance to the restoration project. Our empirical results indicate that streambank stabilization approaches have positive WTP estimates that are substantially larger in magnitude than those related to riparian vegetation management for clearing or planting trees. In general, estimated total household WTP for each of the four restoration design scenarios on public land is higher than when the same restoration design is located on private land. Nonetheless, estimated household WTP for each restoration design scenario on private land is substantial, retaining the majority of the value found on public land in all cases.

Does location of the households' matters? Identifying the households' willingness to pay and preference heterogeneity in advancement of vulnerable ecosystem services: An approach of choice experiment.

The present research underlines the need to expand far outside bundling or hierarchical providing strategy that often focuses on a specific habitat or ecosystem and creates a location-based strategy that considers how dependency in other parts of the region with ecosystem functions and processes leads to complements and resources' trade-offs. Thus, for assessment of spatial heterogeneity based on willingness to pay (WTP) for upgrading environmental attributes across Heihe River Basin (HRB), a choice experiment survey was carried out in the entire river basin. The HRB is one of the big inland river in the Northwestern region of China and is selected on basis of its geomorphological and geographical significance. A sum of 1679 individuals were interviewed through choice experiment technique from whole river basin consisting of five main cities and 33 adjoining rural areas. The Random Parameter logit model, Krinsky-Robb technique as well as delta method were applied for the evaluation of spatial heterogeneity and estimation of individual specific WTP, respectively. Spatial heterogeneity is verified among sampled individuals' preferences about upgradation of environmental attributes, such as, observed preferences of individuals' and their varying corresponding WTP amounts for per unit's upgradation in agriculture product quality, greenhouse gases reduction, farmland landscape, and biodiversity, which reflects heterogeneous tastes and preferences of the selected individuals. In addition, the assessed outcomes for identifying the impacts of distance decay through random parameter logit model depicted the vital role of distance influence on respondents' WTP for restoring the degraded environmental attributes, such that among 3 ad hoc distance bands, WTP of those sampled individuals who are in proximity of ≤ 10km to HRB is more than the rest of the individuals, i.e., individuals living in the range of ≤ 20km and > 20km. For instance, WTP for agriculture product quality is 119.147 CNY/year in ≤ 10km and is higher than the remainders.

Public preferences for marine plastic litter management across Europe

Plastic pollution is one of the most challenging problems affecting the marine environment of our time. Based on a unique dataset covering four European seas and eight European countries, this paper adds to the limited empirical evidence base related to the societal welfare effects of marine litter management. We use a discrete choice experiment to elicit public willingness-to-pay (WTP) for macro and micro plastic removal to achieve Good Environmental Status across European seas as required by the European Marine Strategy Framework Directive. Using a common valuation design and following best-practice guidelines, we draw comparisons between countries, seas and policy contexts. European citizens have strong preferences to improve the environmental status of the marine environment by removing and reducing both micro and macro plastic litter and implementing preventive measures favouring a pan-European approach. However, public WTP estimates differ significantly across European countries and seas. We explain why and discuss implications for policymaking.

Combining revealed and stated preference models for artificial reef siting: A study in the Florida Keys

This paper investigates divers’ preferences for artificial reef diving and willingness to pay (WTP) for large ship, artificial reef site attributes in the Florida Keys. We investigate diver demand for existing decommissioned ships that have been sunk off the Florida Keys as well as demand for four new vessels that are available for disposal from the U.S. Department of Transportation Maritime Administration inventory. Using survey data from divers, we compare revealed preference (RP) site choices, stated preference (SP) choices from a discrete choice experiment, and joint RP/SP choices. Our analysis also incorporates stated attribute non-attendance (ANA) at the choice-task level. Our results indicate that the joint RP/SP models with stated ANA are preferred, leading to decreases in marginal WTP as well as decreases in the variability of marginal WTP estimates in the 95% confidence intervals. Results provide a framework for directing more efficient future decision making regarding sinkings at locations that will enhance welfare for divers.

Willingness to pay for health gains from an international integrated early warning system for infectious disease outbreaks

Recently, due to the corona virus outbreak, pandemics and their effects have been at the forefront of the research agenda. However, estimates of the perceived value of early warning systems (EWSs) for identifying, containing, and mitigating outbreaks remain scarce. This paper aims to show how potential health gains due to an international EWS might be valued. This paper reports on a study into willingness to pay (WTP) in six European countries for health gains due to an EWS. The context in which health is gained, those affected, and the reduction in risk of contracting the disease generated by the EWS are varied across seven scenarios. Using linear regression, we analyse this ‘augmented’ willingness to pay for a QALY (WTP-Q) for each of the scenarios, where ‘augmented’ refers to the possible inclusion of context specific elements of value, such as feelings of safety. An initial WTP-Q estimate for the basic scenario is €17,400. This can be interpreted as a threshold for investment per QALY into an EWS. Overall, WTP estimates move in the expected directions (e.g. higher risk reduction leads to higher WTP). However, changes in respondents’ WTP for reductions in risk were not proportional to the magnitude of the change in risk reduction. This study provided estimates of the monetary value of health gains in the context of a pandemic under seven scenarios which differ in terms of outcome, risk reduction and those affected. It also highlights the importance of future research into optimal ways of eliciting thresholds for investments in public health interventions.

River Ecosystem Resilience: Applying the Contingent Valuation Method in Vietnam

Mine water drainage interferes with ecosystems of the discharging river, whilst river ecosystem services in return affect the livelihoods and well-being of adjacent communities. In Ha Long, Vietnam, surface coal mining will be closed after 2025 following the national and provincial strategy toward sustainable development. This opens up an opportunity to rehabilitate the associated rivers to increase resilience in the surrounding social-ecological system (SES) heavily affected by water pollution from coal mines. Increasing resilience through rehabilitation is costly and policy makers often lack precise enough information on public benefits to make good decisions. In this study, we apply the concept of SESs to analyze the interrelationship between river ecosystems and human society with its institutions and local governance surrounding the Ha Long coal mining area. Applying a contingent valuation survey with 410 households living near to the mining operations, we assess the public benefits resulting from three different but partly combined projects to increase resilience. Results show that households are significantly willing to contribute to all proposed resilience increasing projects. Factors explaining willingness to pay (WTP) are diverse and are found to be related to common institutions and local governance. Through a comparison of the results for the three projects, we find the presence of embedding effects and identify factors leading to upward biased estimates of WTP. Our study contributes to a better understanding and valuation of public benefits in SES necessary for public policy towards increasing resilience in developing countries.

Are U.S. consumers willing to pay more by the lake? An analysis of preferences for Great Lakes region fish

AbstractU.S. per capita seafood consumption is historically high due to population and income growth and consumer preference shifts toward healthy protein options. Despite this expansion, U.S. fisheries, especially those in the Great Lakes region, no longer fulfill domestic demand due to pressure on fish stocks and regulatory constraints. Instead, aquaculture and imports fill the gap. Rainbow trout, yellow perch, and walleye—three species historically produced in the North Central Region (NCR)—exemplify such trends. To expand marketing opportunities for NCR aquaculture producers, this study estimates willingness to pay (WTP) for these species and several search and credence fish attributes. We designed and distributed a survey instrument to collect hypothetical choice experiment responses from U.S. seafood consumers. Using a random utility framework, we estimate mean total WTP for trout, yellow perch, and walleye of $19.99/lb., $15.89/lb., and $17.37/lb., respectively. Further, we identify average price premia of $1.64/lb., $1.97/lb., and $0.84/lb. for NCR-sourced, wild-caught, and fresh fillet attributes. Our analysis also captures regional preferences. Mean WTP estimates for yellow perch and walleye, which are native to the Great Lakes, are significantly higher inside the NCR. Further, trout commands a higher premium outside the NCR than within, suggesting potential market segmentation for the analyzed species.

Consumers' Willingness to Pay for eHealth and Its Influencing Factors: Systematic Review and Meta-analysis.

BackgroundDespite the great potential of eHealth, substantial costs are involved in its implementation, and it is essential to know whether these costs can be justified by its benefits. Such needs have led to an increased interest in measuring the benefits of eHealth, especially using the willingness to pay (WTP) metric as an accurate proxy for consumers’ perceived benefits of eHealth. This offered us an opportunity to systematically review and synthesize evidence from the literature to better understand WTP for eHealth and its influencing factors.ObjectiveThis study aimed to provide a systematic review of WTP for eHealth and its influencing factors.MethodsThis study was performed and reported as per the Cochrane Collaboration and PRISMA (Preferred Reporting Items for Systematic Reviews and Meta-Analyses) guidelines. PubMed, CINAHL Plus, Cochrane Library, EconLit, and PsycINFO databases were searched from their inception to April 19, 2022. We conducted random-effects meta-analyses to calculate WTP values for eHealth (at 2021 US dollar rates) and meta-regression analyses to examine the factors affecting WTP.ResultsA total of 30 articles representing 35 studies were included in the review. We found that WTP for eHealth varied across studies; when expressed as a 1-time payment, it ranged from US $0.88 to US $191.84, and when expressed as a monthly payment, it ranged from US $5.25 to US $45.64. Meta-regression analyses showed that WTP for eHealth was negatively associated with the percentages of women (β=−.76; P<.001) and positively associated with the percentages of college-educated respondents (β=.63; P<.001) and a country’s gross domestic product per capita (multiples of US $1000; β=.03; P<.001). Compared with eHealth provided through websites, people reported a lower WTP for eHealth provided through asynchronous communication (β=−1.43; P<.001) and a higher WTP for eHealth provided through medical devices (β=.66; P<.001), health apps (β=.25; P=.01), and synchronous communication (β=.58; P<.001). As for the methods used to measure WTP, single-bounded dichotomous choice (β=2.13; P<.001), double-bounded dichotomous choice (β=2.20; P<.001), and payment scale (β=1.11; P<.001) were shown to obtain higher WTP values than the open-ended format. Compared with ex ante evaluations, ex post evaluations were shown to obtain lower WTP values (β=−.37; P<.001).ConclusionsWTP for eHealth varied significantly depending on the study population, modality used to provide eHealth, and methods used to measure it. WTP for eHealth was lower among certain population segments, suggesting that these segments may be at a disadvantage in terms of accessing and benefiting from eHealth. We also identified the modalities of eHealth that were highly valued by consumers and offered suggestions for the design of eHealth interventions. In addition, we found that different methods of measuring WTP led to significantly different WTP estimates, highlighting the need to undertake further methodological explorations of approaches to elicit WTP values.

Willingness to Pay of Domestic Water Users for Improved Conservation of Mt. Banahaw de Lucban Watershed, Quezon, Philippines

Many ecosystem services (ES) are provided by watersheds to downstream populations at no cost to them. To ensure sustainability, those who benefit from these services should be engaged in the protection and management of the watershed. The Mt. Banahaw de Lucban (MBdL) provides non-market values that are not considered in management planning; thus, the underestimation of its ES adversely affects its provisioning capabilities. Adding to this shortcoming is the insufficiency of funds to sustain the current watershed conservation initiatives. This study assesses the value that domestic water users have for sustained water supply resulting from the improved conservation of the MBdL watershed through contingent valuation. The willingness to pay (WTP) of 500 respondents from Lucban, Pagbilao, and Lucena City was estimated using logit regression to develop the model. Results revealed that 95% of the respondents voted yes to the referendum and that about 65% support the improved watershed conservation program. Bid amounts, years of education, household size, occupation, and income have a significant influence on WTP. The mean WTP estimate is PHP 71.53/household/mo. The approximate present amount of improved MBdL conservation is PHP 21.50M/yr. The net present value is estimated at PHP 76 M for five years. The potential fund, if collected, may contribute to the sustainability of any watershed conservation program for MBdL.

Estimating residents' WTP for ecosystem services improvement in a payments for ecosystem services (PES) program: A choice experiment approach

Conservation programs help mitigate the detrimental effects on ecosystems and ecosystem services (ES). However, continuous financial support is essential for their sustainability. Therefore, sustainable financing mechanisms such as Payments for Ecosystem Services (PES) are developed. Nevertheless, assessing whether substantial support could be obtained from stakeholders is critical in establishing a PES. This study evaluated the feasibility of establishing a PES by estimating the potential community benefits from ES improvement using a choice modeling approach.The study surveyed 1560 residents of South Carolina to elicit their monthly willingness-to-pay (WTP) for ES improvement. The findings revealed varying WTP estimates depending on the type of intervention, regional location of the residences, and priority ES for improvement. In terms of water quality improvement, the estimated mean WTP ranged from $0 to $3.00. On the other hand, for wildlife habitat improvement, the mean WTP ranged from $0 to $6.39. Finally, for an increase in water supply, only residents from the Upstate region indicated that they are willing with a mean WTP of $0.31. Overall, the community benefits are estimated to reach $4.6 million to $6.2 million monthly, showing that PES is a promising program that could provide a substantial source to support conservation programs.

A Meta-Regression Analysis of Consumer Willingness to Pay for Aquaculture Products

AbstractThis article uses meta-regression analysis to examine variation in willingness to pay (WTP) for farm-raised seafood and aquaculture products. We measure the WTP premiums that consumers have for common product attributes and examine how WTP varies systematically across study design elements, populations of interest, and sample characteristics. Based on metadata from 45 studies, the meta-regression analysis indicates that WTP estimates differ significantly with the availability of attributes such as domestic and environmental certification, but also with sample income and gender representation.

Do preferences differ based on respondent experience of a health issue and its treatment? A case study using a public health intervention.

Preference information is increasingly being elicited to support decision-making. Although discrete choice experiments (DCEs) are commonly used, little is known about how respondents' relative experience of a health issue, and its treatment, might impact the results of preference studies. The aim of this study was to explore how preferences differ between groups of individuals with varying levels of experience of a health issue and its treatment, using a weight loss maintenance (WLM) programme as a case study. An online DCE survey was provided to four groups, each differing in their level of experience with weight loss and WLM programmes. One group was recruited from a randomised controlled trial of a WLM programme (ISRCTN14657176) and the other three from an online panel. Choice data were analysed using mixed logit models. Relative attribute importance scores and willingness-to-pay (WTP) estimates were estimated to enable comparisons between groups. Preferences differed between the groups across different attributes. The largest differences related to the outcome (weight re-gain) and cost attributes, resulting in WTP estimates that were statistically significantly different. The most experienced group was willing to pay £0.35 (95% CI: £0.28, £0.42) to avoid a percentage point increase in weight re-gain, compared with £0.12 (95% CI: £0.08, £0.16) for the least experienced group. This study provides evidence in a public health setting to suggest that preferences differ based on respondent experience of the health issue and its treatment. Health preference researchers should therefore carefully consider the appropriate composition of their study samples.

Farmers’ preferences and willingness to pay for traits of sorghum varieties: Informing product development and breeding programs in Tanzania

ABSTRACT Smallholder farmers’ decisions to adopt improved varieties are expected to be critically governed by their preferences and willingness to pay for different traits of these varieties. This study examined farmers’ preferences for sorghum (Sorghum bicolor (L.) Moench) variety attributes and estimated their willingness to pay (WTP) for these attributes using choice experiment data from >1,300 sorghum farmers in Tanzania. Empirical findings showed that farmers had strong preferences for sorghum varieties that were tolerant to environmental stresses, high yielding, early maturing, fetching higher grain prices, and white in color. Significant heterogeneity was observed in farmers’ preferences across various traits. The WTP estimates revealed that farmers were willing to pay the highest premium for tolerance to environmental stresses, amounting, on average, to three times higher than the WTP for other traits. Our results have important implications for demand-driven variety development that could contribute to improving crop productivity and household welfare.

Valuation of dry and wet aged beef by U.S. consumers

Abstract Aged-beef has historically been available in high-end establishments, but investigation into consumer preferences for aging is increasingly important as it has become more readily available. Consumer perceptions of and willingness-to-pay (WTP) for aged-beef under two methods dry-aging and wet-aging, were studied in a representative sample of n = 1,275 US residents alongside USDA quality grades. In general, US residents are not knowledgeable regarding aged-beef but have a positive direct-stated perception of the practice. Respondents self-reported familiarity with USDA grades Prime and Choice and perceived them as superior beef attributes. Half of respondents were randomly assigned to receive a low information treatment about beef aging, while the other half saw a high information treatment with additional information about beef aging. A likelihood ratio test indicated that the two information groups could not be pooled for analysis, and a two-class latent class model was estimated for both the low information and high information treatments. Respondents in class 1, in both information treatments, had stronger preferences for beef and were more receptive of beef aging, with the exception of wet-aged beef in the low information treatment, which they were not willing to pay a premium for. The second latent class, which is probabilistically smaller, had negative WTP estimates for both aging methods under both information treatments provided. Additional information regarding beef aging was found to have a positive impact on mean WTP for dry-aged beef in latent class 2. All models revealed positive mean WTP point estimates which ordinally behaved as expected with USDA Prime commanding the highest premium and Select the least.

Analysis of Thai Consumers’ Willingness to Pay for Korean Grapes: Focusing on A Comparison before and after Information Provision on Grape Varieties

This study estimates the willingness to pay (WTP) for Korean Geobong and Shine Musket and discusses the possibility of exporting them to Thailand. In the case of providing no information, the estimate of the average WTP for Korean Geobong is 731.8Bhat. With the information provided, it is 790.6Bhat, which increased to 58.8Bhat (8.0%). In the absence of information on Korean Shine Muscat, the estimate of the average WTP is 1,019.9Bhat. With the information given, it is 1,140.0Bhat, which increased to 120.1Bhat (11.8%). As the result of the changes in WTP by separating consumers from the awareness levels toward Korean Geobong and Shine Muscat, both show much information value in the low awareness group with the high awareness group compared. Based on the empirical results of this study, marketing strategies that provide information on Korean products could increase the Thai consumers’ demand for Korean grapes.

The relative performance of ex‐ante and ex‐post measures to mitigate hypothetical and strategic bias in a stated preference study

AbstractBias related to the hypothetical setting remains controversial regarding the reliability and validity of value estimates from discrete choice experiments (DCEs). This has motivated a large body of literature to investigate approaches for mitigating hypothetical and strategic bias. Our study provides further evidence to inform this debate by testing whether a combination of ex‐ante or ex‐post mitigation strategies might be effective in reducing bias in DCEs. Specifically, we employ individual and multiple ex‐ante reminders alongside an ex‐post data treatment and analyse how their individual or joint use affects willingness to pay (WTP) estimates. The econometric analysis makes use of innovative semi‐parametric logit‐mixed logit in addition to the state‐of‐the‐art mixed logit model. The empirical case study focuses on preferences for the environmental and social impacts of organic olive production. By comparing the three experimental treatments with a control treatment, we test whether ex‐ante cheap talk, a reminder of the project's relative spatial extent, or a combination of both affect stated WTP. In addition, we use an ex‐post data treatment to correct WTP estimates. WTP estimates of treatments related to ex‐ante mitigation strategies did not differ significantly from those obtained from a control treatment with standard budget constraint reminders. However, the ex‐post approach results in a significant reduction in mean WTP estimates and is used to investigate whether the observed choice inconsistencies are due to unintentional errors or strategic behaviour. We argue that ex‐post mechanisms deserve greater attention and highlight the need to distinguish strategic behaviour from other sources of hypothetical bias.

A tale of two samples: Understanding WTP differences in the age of social media

Social media platforms represent a potentially cost-effective solution to obtaining stated preference data. We use data from a representative sample and a sample of convenience to investigate how willingness to pay (WTP) for increased cultural (recreational) use of an ecologically unique site differs across the two groups. We find mixed evidence of differences in WTP estimates between the two samples depending on the survey attribute. Where differences exist, the most effective selection correction mechanism is the ordered probit with weights. Our results suggest caution about extrapolating results to the general population from samples of conveniences without correcting for sample selection.

Willingness to Pay for Renewable Energy

Increasing renewable energy footprints now features prominently in the clean energy transition plan for many countries. Consumer’s Willingness To Pay (WTP) for renewable energy is an important variable in this plan. A concept-centric review of 70 research articles conducted in this study reveals that first and most commonly, consumer’s willingness to pay for renewable energy indicates the social acceptance of renewable energy, quantifying the extent of public financial support for meeting nationally set renewable energy targets. Second, it reflects the preferred attributes of renewable electricity supply in deregulated retail electricity markets. And third, it mirrors the non use values of renewable energy sources. A concept augmented matrix presented in the paper helps understand the most popular valuation techniques used to quantify WTP estimates in included studies. This paper concludes by presenting policy enablers to accelerate renewable energy transition in developing economies - where the transition is still in nascent stages.

Integrating a Real-Life Experience with Consumer Evaluation: Sensory Acceptance and Willingness to Pay for Coffee Drinks in a Real Café

Consumer experiments in real-life environments that capture consumer responses in context and link them to consumers' daily habits are valuable for reflecting multi-faceted decision environments, reducing consumer cognitive burden, and other empirical biases. The objective of this study was to investigate and link consumers’ sensory acceptance and willingness to pay (WTP) in a real-life study situation by taking the example of oat and pea protein milk. A total of 144 German consumers were recruited in a café in a middle-sized town in Germany. Under blind conditions, consumers were asked to indicate their hedonic liking, willingness to pay a premium for cappuccino prepared with plant-based milk, and their adaptability and motivation for integrating the plant-based milk alternatives into their daily diet. The sensory evaluation of this study showed good acceptance of cappuccino prepared with oat milk and pea protein milk; high acceptance was reflected in reasonable and realistic WTP estimates.