WTP Values Research Articles

Willingness to Pay for Improved Groundwater due to BMPs in PEI.

This study uses stated preference techniques to evaluate the willingness to pay for improved groundwater in PEI, which allows us to estimate the social cost of nitrogen in this region. 'Beneficial Management Practices' (BMPs) are often employed in PEI's agricultural sector, to improve crop yields but also reduce adverse environmental effects such as nitrogen leaching that can affect ground and surface waters. PEI residents were surveyed to estimate a dollar value of improved water quality due to reduced nitrogen leaching due to BMPs. From the responses to a double-bounded dichotomous choice survey, models using maximum likelihood estimation showed that residents of PEI were willing to pay roughly $230 per year to see a reduction in nitrogen of either 20% or 50%, which translated to $5-13 per kg of nitrogen reduced. However, excluding 'yeah-sayers' and protest votes suggests that WTP is lower for the 20% reduction and increases as nitrogen reduction increases. Thus, a social cost of $13/kg should be considered an upper bound in PEI. WTP values, as well as estimates of the social cost of nitrogen are similar to values in previous literature. We find that variables such as cell phone usage, belief that farmers should pay for BMPs, and spending on water filtration have a statistically significant impact on WTP. Other variables are significant in some model specifications, however many demographic variables such as employment status and education do not affect WTP.

Exploring the potential and viability of inland waterway transport as a sustainable passenger transportation solution in emerging countries

The mounting transportation challenges and the ever-increasing usage of private vehicles in emerging countries necessitate an investigation into alternative sustainable modes of transportation. A three-stage behavioral based methodology is proposed for evaluating the viability of Inland Waterway Transportation (IWT) as a sustainable solution to the passenger transportation challenges faced by emerging nations. The approach includes identification of intervention areas, development of econometric models and recommendation of the best operational scenarios. The intervention areas are identified based on Importance Satisfaction Analysis and econometric models are developed to quantify benefit. The study identified nine key intervention areas in terms of qualitative and quantitative attributes, which served as the starting point for subsequent analysis and evaluation. The result showed substantially higher WTP values for the qualitative attributes (safety, security, and crowding level) of IWT, which indicates the pressing need for improvements in these attributes. The study clearly shows the possibility of enhancing the service quality of IWT without putting additional financial burden on the Government. The recommended scenario offers substantial benefits to travelers as compared to the base scenario. The study offers both short-term and long-term strategies to enhance IWT services, providing improvements without fare increments in the short term. Upon adopting the short-term scenario and gaining public acceptance, the recommended long-term scenario, which includes fare increments, can be gradually implemented. Although the findings are specific to the case studied, the methodology and experience can be applied to enhance IWT services wherever applicable.

First-Line Lenvatinib Plus Pembrolizumab or Everolimus versus Sunitinib for Advanced Renal Cell Carcinoma: A United States-Based Cost-Effectiveness Analysis.

The CLEAR trial indicated that survival benefits were generated with lenvatinib plus pembrolizumab (LP) or everolimus (LE) than with sunitinib for advanced renal cell carcinoma (aRCC). However, the high cost of immuno-target and dual-targeted treatment, we assessed the cost-effectiveness of lenvatinib plus pembrolizumab or everolimus in the first-line setting for treatment of patients with aRCC from the United States (US) payers' perspective. A comprehensive Markov model was developed to evaluate the cost and effectiveness of LP or LE in first-line therapy for aRCC. We estimated life years (LYs), quality-adjusted life-years (QALYs), and incremental cost-effectiveness ratios (ICERs). Utility values and direct costs related to the treatments were gathered from the published studies. Then, one-way and probabilistic sensitivity analyses were performed. Additional subgroup analyses were considered. Treatment with LP and LE provided an additional 0.67 QALYs (0.62 LYs) and 0.66 QALYs (0.90 LYs) compared with sunitinib, resulting in ICER of $131,656 per QALY and 201,928 per QALY, respectively. The most influential factor in this model was the cost of pembrolizumab with LP. Probabilistic sensitivity analysis showed there was a 58.97% and 28.91% probability that LP and LE were cost-effective at WTP values of $150,000 per QALY in the US. Subgroup analyses demonstrated that LP was more cost-effective for patients from Western Europe and North America, intermediate risk of the International risk group of Metastatic Renal Cell Carcinoma Database Consortium (IMDC), favorable and intermediate risk group of Memorial Sloan Kettering Cancer Center (MSKCC) and PD-L1 combined positive score greater than or equal to 1%. From the perspective of the US payer, LP is a cost-effective option as first-line treatment for patients with aRCC at a WTP threshold of $150,000 per QALY, but LE is the opposite.

Cost-effectiveness analysis of typhoid conjugate vaccines in an outbreak setting: a modeling study

BackgroundSeveral prolonged typhoid fever epidemics have been reported since 2010 throughout eastern and southern Africa, including Malawi, caused by multidrug-resistant Salmonella Typhi. The World Health Organization recommends the use of typhoid conjugate vaccines (TCVs) in outbreak settings; however, current data are limited on how and when TCVs might be introduced in response to outbreaks.MethodologyWe developed a stochastic model of typhoid transmission fitted to data from Queen Elizabeth Central Hospital in Blantyre, Malawi from January 1996 to February 2015. We used the model to evaluate the cost-effectiveness of vaccination strategies over a 10-year time horizon in three scenarios: (1) when an outbreak is likely to occur; (2) when an outbreak is unlikely to occur within the next ten years; and (3) when an outbreak has already occurred and is unlikely to occur again. We considered three vaccination strategies compared to the status quo of no vaccination: (a) preventative routine vaccination at 9 months of age; (b) preventative routine vaccination plus a catch-up campaign to 15 years of age; and (c) reactive vaccination with a catch-up campaign to age 15 (for Scenario 1). We also explored variations in outbreak definitions, delays in implementation of reactive vaccination, and the timing of preventive vaccination relative to the outbreak.ResultsAssuming an outbreak occurs within 10 years, we estimated that the various vaccination strategies would prevent a median of 15–60% of disability-adjusted life-years (DALYs). Reactive vaccination was the preferred strategy for WTP values of $0–300 per DALY averted. For WTP values > $300, introduction of preventative routine TCV immunization with a catch-up campaign was the preferred strategy. Routine vaccination with a catch-up campaign was cost-effective for WTP values above $890 per DALY averted if no outbreak occurs and > $140 per DALY averted if implemented after the outbreak has already occurred.ConclusionsCountries for which the spread of antimicrobial resistance is likely to lead to outbreaks of typhoid fever should consider TCV introduction. Reactive vaccination can be a cost-effective strategy, but only if delays in vaccine deployment are minimal; otherwise, introduction of preventive routine immunization with a catch-up campaign is the preferred strategy.

Heterogeneous choice in WTP and WTA for renting land use rights in rural china: Choice experiments from the field

China's institutional structures regarding land are unique and complex. Recent changes to the land laws now permit farmers to rent Land Use Rights (LUR) from other farmers. The purpose of this paper was to make some determination about the value of certain attributes important in determining the willingness of farmland tenants to pay agricultural rents, and the willingness of owners of land use rights accept a rental price.We use in-the-field discrete choice experiments (DCE) in Shandong, Sichuan, Shaanxi, Jiangsu and Hunan across two waves in 2018 to identify the WTP and WTA attributes for both landlords and tenants. Our underlying hypothesis was that landlords and tenants will likely place different utility weights on attributes of land because their interest between making and receiving a payment are different. This is confirmed in this study. We find little uniformity in WTP and WTA across provinces. Mixed Logit results confirm that not all Chinese farmers think alike and are heterogenous in how they weigh or value attributes. Overall, we find autarky land rental prices of 813.93RMB, 564.65 RMB, 1,193.96 RMB and 863.99 RMB for Shaanxi, Shandong, and Sichuan which are well within the observed range. We observe a fairly wide range of WTP and WTA values across provinces which reflect the individual characteristics of the growing regions surveyed. We also find generally that the WTP for attributes are higher than WTA. These are reflected by utility-rent elasticities which reveals that heWTP is more elastic than WTA. We conjecture that differences in WTP and WTA is attributed to certainty equivalent risk transfers and untethered access by farmers to the wage market.

Modelling welfare estimates in discrete choice experiments for seaweed-based renewable energy

We explore what researchers can gain or lose by using three widely used models for the analysis of discrete choice experiment data—the random parameter logit (RPL) with correlated parameters, the RPL with uncorrelated parameters and the hybrid choice model. Specifically, we analyze three data sets focused on measuring preferences to support a renewable energy programme to grow seaweed for biogas production. In spite of the fact that all three models can converge to very similar median WTP values, they cannot be used indistinguishably. Each model is based on different assumptions, which should be tested before their use. The fact that standard sample sizes usually applied in environmental valuation are generally unable to capture the outcome differences between the models cannot be used as a justification for their indistinct application.

Assessing public preferences for deep sea ecosystem conservation: a choice experiment in Norway and Scotland

ABSTRACT Recent events around the world have revealed varying degrees of public support for climate change and environmental regulation. Applying a latent class logit model, this study investigates Norwegian and Scottish public’s economic support for proposed deep sea management policies for novel attributes, identifying the presence of preference heterogeneity. Marine litter and health of fish stocks were the attributes with the highest values in absolute terms. This was followed by the size of the protected area coverage, whilst the creation of jobs was the least valued. The results highlight public support for the further collective action required by the EU in moving beyond the 2020 objective of achieving good environmental status of Europe’s seas, despite the low WTP values of the minority classes in each country.

Analyzing German consumers\u2019 willingness to pay for green electricity tariff attributes: a discrete choice experiment

BackgroundIn order to achieve an environmentally friendly and sustainable energy supply, it is necessary that this goal is supported by society. In different countries worldwide it has been shown that one way consumers want to support the energy transition is by switching to green electricity. However, few people make the leap from their intention to a buying decision. This study explores parameters that influence whether German consumers would hypothetically decide to switch to a green electricity tariff.MethodsA quota-representative online survey including a discrete choice experiment with 371 German private households was conducted in 2016. For the econometric analysis, a generalized multinomial logit model in willingness-to-pay space was employed, enabling the estimation of WTP values to be as realistic as possible.ResultsThe results show that consumers’ decision whether or not to make the switch to green energy is mainly influenced by the source of green energy, whether a person can outsource the switching process, and a person’s attitude towards the renewable energy sources levy that currently exist in Germany.ConclusionsThe findings indicate that politics should focus on supporting wind and solar energy as German consumers prefer these sources over biogas. As the results suggest, the EEG levy is a reason why consumers have lower WTP for switching to a green tariff. Therefore, a switching bonus with a specifically “framed” bonus in the amount of the current EEG levy could be a promising strategy for the increase of green energy tariff acceptance. Furthermore, attention should be given to psychological and behavioral aspects, as the results indicate that these factors influence the consumer’s choice for a green electricity tariff.

“Willingness to Pay”: The Value Attributed to Program Location by Pulmonary Rehabilitation Participants

The “contingent valuation” method is used to quantify the value of services not available in traditional markets, by assessing the monetary value an individual ascribes to the benefit provided by an intervention. The aim of this study was to determine preferences for home or center-based pulmonary rehabilitation for participants with chronic obstructive pulmonary disease (COPD) using the “willingness to pay” (WTP) approach, the most widely used technique to elicit strengths of individual preferences. This is a secondary analysis of a randomized controlled equivalence trial comparing center-based and home-based pulmonary rehabilitation. At their final session, participants were asked to nominate the maximum that they would be willing to pay to undertake home-based pulmonary rehabilitation in preference to a center-based program. Regression analyses were used to investigate relationships between participant features and WTP values. Data were available for 141/163 eligible study participants (mean age 69 [SD 10] years, n = 82 female). In order to undertake home-based pulmonary rehabilitation in preference to a conventional center-based program, participants were willing to pay was mean $AUD176 (SD 255) (median $83 [IQR 0 to 244]). No significant difference for WTP values was observed between groups (p = 0.98). A WTP value above zero was related to home ownership (odds ratio [OR] 2.95, p = 0.02) and worse baseline SF-36 physical component score (OR 0.94, p = 0.02). This preliminary evidence for WTP in the context of pulmonary rehabilitation indicated the need for further exploration of preferences for treatment location in people with COPD to inform new models of service delivery.

ANALISIS KESEDIAAN KONSUMEN UNTUK MEMBAYAR PRODUK TEMPE HYGIENE RUMAH KEDELAI GROBOGAN DI KABUPATEN GROBOGAN

Public awareness of health is currently rising. Now consumers tends to consider the health benefits such as tempe hygiene. Tempe hygiene processed with hygienic using Varieties Grobogan non-GMO, therefore it has good quality and higher price. This study aims to describe the characterictics of consumers, analyze the average value of the maximum that consumers are willingness to pay and determine the factors that influence consumers’ willingness to pay. This study was conducted at 5 Tempe Hygiene market place in Grobogan with a hundred respondents selected using a quota sampling method. Data were analyzed using the descriptive analysis to describe consumer characteristics, CVM (contingent valuation methode) analysis to calculate the average value of maximum WTP and logistic regression analysis to analyze the factor that affects the value of WTP. The result showed that as many as 82% of respondents were willing to pay more for tempe hygiene. The value of WTP is Rp 6,432.00 per pack (350 gram). Factors that significantly affect consumers’ WTP values were age, income and product quality. Based on the analysis result, it can be concluded that the consumers were willing to pay more for tempe hygiene products with the difference between the average price and the real price of 7,19%.

Strategi Peningkatan Pelayanan Persampahan Berbasis 3R di Kelurahan Jatihandap Melalui Penerapan Contingent Valuation Method

The increasing population in Indonesia is directly proportional to the growth of new settlements. In line with this, the growth of waste volume in Indonesia is closely related to the growth of its population. The level of welfare and lifestyle in Indonesia has resulted in a significant increase in waste generation, especially in urban areas. Jatihandap is one of the areas in Mandalajati Subdistrict, Bandung City that increases the influence of waste generation by each people and wants to improve the quality of its waste services to reduce these impacts. One way that can be done to measure the willingness of citizens to improve waste services is to measure the Contingent Valuation Method. Contingent Valuation Method (CVM) Based on the results of this study, WTP values were 138 people from 153 samples selected. The estimated WTP (EWTP) is Rp. 12,971 and the total WTP (TWTP) is Rp. 80,385,000 / month. Based on multiple linear regression analysis, the WTP value of Jatihandap Urban Village is influenced by the amount of garbage contributions and gender equality from the results of the questionnaire that has been done.

Estimating the cost of two-wheeler road accident injuries in India using the willingness to pay method

ABSTRACTFinancial loss due to road traffic accidents is very huge in India; yet, remarkable studies were not done to quantify the loss. In this study, an effort is made through a Stated Preference (SP) survey to know how users value the safety. The amount of money that the road users are ready to contribute for a secured transportation facility is derived from these data. The SP data were collected from two-wheeler riders in Calicut, Kondotty and Manjeri. Attributes included in the SP experiment were time and cost of travel and number of traffic accidents in a year and the WTP values are calculated through binary logit analysis. It was observed that travel cost, accident rate of the route selected, age, occupation, personal income and number of household members have significant impact on the decision-making process. WTP value of a road accident for a two-wheeler user was found to be Rs 0.4232/person/trip.

For better or worse? Investigating the validity of best-worst discrete choice experiments in health.

Discrete choice experiments (DCEs) are frequently used in health economics to measure preferences for nonmarket goods. Best-worst discrete choice experiment (BWDCE) has been proposed as a variant of the traditional "pick the best" approach. BWDCE, where participants choose the best and worst options, is argued to generate more precise preference estimates because of the additional information collected. However, the validity of the approach relies on two necessary conditions: (a) best and worst decisions provide similar information about preferences and (b) asking individuals to answer more than one choice question per task does not reduce data quality. Whether these conditions hold in empirical applications remains under researched. This is the first study to compare participants' choices across three experimental conditions: (a) BEST choices only, (b) WORST choices only, and (c) BEST and WORST choices (BWDCE). We find responses to worst choices are noisier. Implied preferences from the best only and worst only choices are qualitatively different, leading to different WTP values. Responses to BWDCE tasks have lower consistency, and respondents are more likely to use simplifying decision heuristics. We urge caution in using BWDCE as an alternative to the traditional "pick the best" DCE.

Two-stage choice-based demand model for rural feeder service to the bus stop

ABSTRACTThe paper documents an experience of developing a demand model for alternatives with dissimilar attributes in the context of transportation services. The work is demonstrated with reference to feeder service to the bus stop in rural India, where the attributes and physical levels of hypothetical feeder service and presently used modes, namely bicycle, and motorcycles, are highly dissimilar. A two-stage approach was adopted in which the first stage analysis included the development of an RPL model to obtain the WTP values of hypothetical feeder service. At this stage, only the attributes of various hypothetical feeder services were considered which were similar in nature. In the second stage, the number of variables describing the hypothetical feeder service was reduced judiciously using the knowledge obtained from stage I analysis and demand models were developed for two user groups, namely bicycle users and motorcycle users. The results indicate the need for improvement of qualitative attributes of feeder service, which are often neglected in emerging countries such as India. Although the results presented in the paper are case-specific, the experiences documented in this paper are expected to encourage transportation planners to follow a similar approach while developing demand models involving dissimilar alternatives.

RELIABILITY AND VALIDITY OF HYPOTHETICAL SCENARIOS FOR ESTIMATING WILLINGNESS TO PAY (WTP) PER QUALITY ADJUSTED LIFE YEAR (QALY) IN INDONESIA SETTING

Objective: To estimate validity and reliability of WTP questionnaire which WTP value can be taken as an indication of the monetary value of health gains, which may carry information regarding the appropriate height of the cost-effectiveness threshold.Methods: Three hundred respondents, in Yogyakarta province, Indonesia, were interviewed during June 2017. We examine a value of WTP associated with the following scenarios: 1) improving moderate condition; 2) extending life during terminal illness, and 3) lifesaving. The interview ascertained maximum hypothetical WTP for one QALY using a dichotomous bidding format with an open-ended final question, along with questions about the socio-economic factors. Concerning validity, the WTP of the 3 versions of hypothetical scenarios were compared as known-group validity and analysis of the sensitivity and specificity was performed. Test-retest reliability and alpha Cronbach were employed to measure internal consistency.Results: Analysis generally confirmed the validity and reliability of the WTP hypothetical scenarios. In terms of known group validity, there was significant difference across two scenarios (treatment v. s lifesaving), but no significant difference between mean WTP for treatment and terminal illness was found. Mean WTP for terminal illness (38 Million IDR) and lifesaving scenario (16 Million IDR) was significantly higher than that of treatment scenario (14 Million IDR). The WTP instrument showed good convergent validity (r=0.784), when comparing correlation between WTP value and utility score. Estimation of scenario’s sensitivity and specificity in deriving expected WTP were 70.33 % and 38.98 %, respectively. The positive and negative predictive values were 64 % and 46 %. The test-retest reliability of WTP values indices excellent stability and reliability of the instrument with Spearman’s rank correlation coefficient of 0.816 (p<0.001)Conclusion: This study demonstrated that the WTP instrument is feasible and relatively reliable for measuring the WTP values in Indonesia. For wider application of the instrument, its validity should be investigated further. Meanwhile, adoption of WTP as an empirical evidence of societal values is encouraged.

WTP for baby milk formula in China: Using attribute nonattendance as a priori information to select attributes in choice experiment

AbstractIt is well‐known that these nonattended attributes in choice experiments (CE) could cause some bias. A combination of two successive CEs are designed with focus on consumers’ demand for the attributes of baby milk formula in China, where the first CE includes the full set of attributes and the second excludes consumers’ self‐reported nonattended attributes in the first CE. Significant discrepancies are detected for both WTPs for an individual attribute and the total WTPs (the sum of all WTPs for individual attributes in each CE), and in most cases WTPs decrease as a result of excluding the ignored attributes. Changes in WTP are mainly driven by the variation of choice task complexity. However, there is no significant difference in the influence of excluding nonattended attributes on the WTPs for the same attended attribute in different subsamples. In addition, we also find that consumers in China have significantly higher but dispersed WTP values for imported (11.6–47.0%), organic (6.9–52.5%), and probiotics (7.3–35.5%) and sugar‐free (5.9–26.0%) attributes for baby milk formula. [EconLit citations: C90, D12, Q13, Q18].

Percepção ambiental dos moradores de Uberlândia sobre a estação ecológica do Panga – uma visão sob a ótica da economia do meio ambiente

A Valoração Ambiental é o processo que busca estimar o valor econômico de recursos naturais através da determinação de equivalência de outros recursos disponíveis na economia. O objetivo desse estudo foi identificar como as pessoas que moram próximas à Estação Ecológica do Panga, situada no município de Uberlândia, Minas Gerais, atribuem valor à esse bem ambiental, através da identificação da DAP e DAR, utilizando-se do Método de Valoração Contingente. Ocorreram aplicação de 300 questionários para o grupo de moradores, no período de 21 de setembro 2015 a 06 de novembro de 2015. Desses, 59% eram mulheres, 65% casados, com renda média de R$ 724,96 mensais e tempo de residência médio de 9,46 anos no local da entrevista. Os moradores apresentaram DAP positiva e DAR negativa; o valor da DAP encontrado foi de R$ 4.637.520 e o da DAR foi de 10.197.360. Após tal análise, foi realizada uma estimação do modelo logit para identificar as variáveis que influenciaram a DAP e DAR dos moradores. Verificou-se que idade, tempo de residência e renda influenciam a DAP positivamente. Já para a DAR, notou-se que os homens têm mais disposição a receber, e pessoas com renda maior possuem menos disposição a receber.

Evolution of Trust and Trustworthiness between Cooperators and Non-Cooperators in Public Goods: Evidence from Field Experiment: Ethiopia

Standard economic theory assumes that agents’ valuation of economic outcomes is independent of the process via which these outcomes are produced. Yet Bulte, Gerking, List, and de Zeeuw (2005) found that causes in addition to outcomes matter in valuation. Using a field experiment I test whether drawing people’s attention to the role they play in the process of environmental degradation affects their willingness to pay for mitigation, and how this compares the activities undertaken by others. I do so by eliciting contributions to a reforestation program in an environmentally valuable area in Ethiopia. I implement three different conditions which allow me to measure the impact on contributions of emphasizing (i) the contributions of others to forest conservation, and (ii) the role of the respondents themselves in the forest degradation process. I find that learning about the efforts of others does not affect contributions while emphasizing the respondents’ negative role in the process actually increases contributions. Extant literature notes that including information on human-caused environmental damage in contingent valuation surveys does indeed increases the WTP values. This was, however, attributed to ‘outrage effect’ – that is, because respondents are upset, they contribute more to environmental goods. In a somewhat different setting this study finds evidence that people’s contributions also increase significantly and substantially if attention is drawn to their own responsibility in the deforestation and desertification process, suggesting, the ‘responsibility effect’ is also important in valuation.

Public Acceptance and Preference Towards Rainwater Harvesting in Klang Valley, Malaysia

This study explored the public acceptance and preference towards rainwater harvesting (RWH) in the area of Klang Valley. Self-administered questionnaires were used to obtain data from 109 respondents. An interview was also conducted on an individual representing a household with a RWH system. Respondents generally accepted that rainwater could be collected and reused for non-potable uses such as washing the porch and vehicles and watering the garden. While suggested WTP values of non-owners of the system fall below RM500, actual interview showed a homeowner spending a much higher amount for the system’s installation. Among the attributes of a RWH system preferred by respondents were affordability, safety and convenience. Added feature of a system preferred would be having a unit subsidized by the government. These findings may assist policymakers in finding ways to promote the development and use of RWH systems in the country.

The impact of the design of payment scales on the willingness to pay for health gains

The questionnaire format applied in a CV study represents the way in which the WTP estimates are obtained. Payment scales are often used in CV studies as the questionnaire format of choice. The study summarized here analyzes the impact of the design of two payment scales (PS) on the monetary value of QALY gains. The scales differed in terms of their end-points, mid points, and coarseness. We judged the performance of the two PS against several indicators: the average WTP per QALY estimates, post-estimation uncertainty levels, the existence of mid-point concentration, and the dependency on end-points. Our results show that PS design influences respondents’ WTP values. The results also suggest that a more detailed scale with a more realistic range may help respondents to elicit values closer to their “true” WTP values, hence produce higher-quality outcomes. Further research and pretesting strategies are suggested to explore and minimize the effects of PS design on WTP estimates, which may ultimately increase the quality of WTP estimates.