Skip to main content

Advertisement

SpringerLink
Log in

As Time Goes By: Examination of Temporal Stability Across Stated Preference Question Formats

  • Published:
Environmental and Resource Economics Aims and scope Submit manuscript

Abstract

We evaluate the temporal stability of willingness-to-pay values obtained from two identical stated-preference surveys undertaken in 2004 and 2012. The surveys employ two discrete-choice elicitation formats to value reductions in two health endpoints related to tap water consumption, and are explicitly designed to make direct comparisons between formats. We find no significant differences in real willingness-to-pay between the two surveys for either format—a result that is robust to the structure of heterogeneity used to model respondent preferences. Findings lend support, at least within the context of tap water quality, to the temporal transfer of nonmarket benefits over extended time periods.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. Throughout this paper we use the nomenclature defined by Carson and Louviere (2011) to describe stated preference typologies.

  2. Adamowicz et al. (2011) refer to Format A and Format B as contingent valuation and choice experiment, respectively.

  3. Results from the ordering-effect tests and from models estimated with yea-sayers are available in the supplementary appendix. Models estimated with yea-sayers produce higher WTP values but are similar to models without yea-sayers with regards to temporal stability.

  4. We also assess possible differences in scale using a generalized mixed logit model (Fiebig et al. 2010), which is an extension of the MLM that allows for respondent-specific scale heterogeneity. We model scale as a function of dataset indicators. Findings show significant heterogeneity in scale but no systematic differences across datasets.

  5. In addition, we estimate a CLM where parameters for all four datasets are determined simultaneously and have been adjusted for scale differences. This approach allows for the direct comparison of parameters across all datasets. Results, reported in “Appendix B”, indicate no significant differences in parameters between the two Format A datasets or the two Format B datasets. There are, however, differences across elicitation formats, lending further support to the use of separate Format A and Format B models.

  6. Inflation-adjusted WTP values can be calculated either by adjusting Bill levels ex-ante of model estimation or by adjusting WTP ex-post of the estimation. Brouwer and Bateman (2005) and Metcalfe and Baker (2015) use the former procedure while Hensher et al. (2012) suggest the latter approach better preserves the behavioral tradeoffs intrinsic to each time period. We find that the two methods yield nearly identical WTP values.

  7. The existence of two classes, with one preferring the status quo and the other the policy-proposed alternative, has been noted in the context of other low-probability high-consequence events (McClelland et al. 1993; Botzen and van den Bergh 2012). McClelland et al. (1993) reason that bimodal preferences will arise if some respondents focus on the high-consequence component while others focus on the low-probability of the event.

References

  • Adamowicz W, Dupont D, Krupnick A, Zhang J (2011) Valuation of cancer and microbial disease risk reductions in municipal drinking water: an analysis of risk context using multiple valuation methods. J Environ Econ Manag 61:213–226

    Article  Google Scholar 

  • Andrews RL, Currim IS (2003) A comparison of retention criteria for finite mixture logit models. J Mark Res 40:235–243

    Article  Google Scholar 

  • Bateman IJ, Brouwer R, Ferrini S, Schaafsma M, Barton DN, Dubgaard A, Hasler B, Hime S, Liekens I, Navrud S, De Nocker L, Ščeponavičiūtė R, Semėnienė D (2011) Making benefit transfers work: deriving and testing principles for value transfers for similar and dissimilar sites using a case study of non-market benefits of water quality improvements across Europe. Environ Resour Econ 50:365–387

    Article  Google Scholar 

  • Bliem M, Getzner M, Rodiga-Lassnig P (2012) Temporal stability of individual preferences for river restoration in Austria using a choice experiment. J Environ Manag 103:65–73

    Article  Google Scholar 

  • Botzen WJW, van den Bergh JCJM (2012) Risk attitudes to low-probability climate change risks: WTP for flood insurance. J Econ Behav Organ 82:151–166

    Article  Google Scholar 

  • Boyd JW, Kousky C (2016) Are we becoming greener? Trends in environmental desire. Resour Mag 191:26–33

    Google Scholar 

  • Boyle KJ, Bergstrom JC (1992) Benefit transfer studies: myths, pragmatism and idealism. Water Resour Res 28:657–663

    Article  Google Scholar 

  • Brookshire DS, Neill HR (1992) Benefit transfers: conceptual and ethical issues. Water Resour Res 28:651–655

    Article  Google Scholar 

  • Brouwer R (2006) Do stated preference methods stand the test of time? A test of the stability of contingent values and models for health risks when facing an extreme event. Ecol Econ 60:399–406

    Article  Google Scholar 

  • Brouwer R, Dekker T, Rolfe J, Windle J (2010) Choice certainty and consistency in repeated choice experiments. Environ Resour Econ 46:93–109

    Article  Google Scholar 

  • Brouwer R, Bateman IJ (2005) Temporal stability and transferability of models of willingness to pay for flood control and wetland conservation. Water Resour Res 41:W03017

    Article  Google Scholar 

  • Brouwer R, Logar I (2014) Do choice experiments produce more stable welfare measures than contingent valuation? A test-retest. Paper presented at the Fifth World Congress of Environmental and Resource Economists, 28 June–2 July 2014, Istanbul, Turkey

  • Cameron JI (1997) Applying socio-ecological economics: a case study of contingent valuation and integrated catchment management. Ecol Econ 23:155–165

    Article  Google Scholar 

  • Carson RT, Mitchell RC (2000) Public preference toward environmental risks: the case of trihalomethanes. Department of Economics, University of California, San Diego discussion paper 2000–2021 (August 2000)

  • Carson RT, Groves T (2007) Incentive and informational properties of preference questions. Environ Resour Econ 37:181–210

    Article  Google Scholar 

  • Carson RT, Louviere JJ (2011) A Common nomenclature for stated preference elicitation approaches. Environ Res Econ 49:539–559

    Article  Google Scholar 

  • Carson RT, Hanemann WM, Kopp RJ, Krosnick JA, Mitchell RC, Presser S, Rudd PA, Smith VK, Conaway M, Martin K (1997) Temporal reliability of estimates from contingent valuation. Land Econ 3:151–163

    Article  Google Scholar 

  • Cooper J, Loomis J (1990) Pooled time-series cross-sectional travel cost models: testing whether recreation behavior is stable over time. Leis Sci 12:161–171

    Article  Google Scholar 

  • Day B, Bateman IJ, Carson RT, Dupont D, Louviere JJ, Morimoto S, Scarpa R, Wang P (2012) Ordering effects and choice set awareness in repeat-response stated preference studies. J Environ Econ Manag 63:73–91

    Article  Google Scholar 

  • Fiebig DG, Keane MP, Louviere J, Wasi N (2010) The generalized multinomial logit model: accounting for scale and coefficient heterogeneity. Market Sci 29:393–421

    Article  Google Scholar 

  • Hellerstein D (1993) Intertemporal data and travel cost analysis. Environ Resour Econ 3:193–207

    Article  Google Scholar 

  • Hensher DA, Rose JM, Li Z (2012) Does the choice model method and/or the data mater? Transportation 39:351–385

    Article  Google Scholar 

  • Hess S, Rose JM (2012) Can scale and coefficient heterogeneity be separated in random coefficients models? Transportation 39:1225–1239

    Article  Google Scholar 

  • Jorgensen BS, Syme GJ, Smith LM, Bishop BJ (2004) Random error in willingness to pay measurement: a multiple indicators, latent variable approach to the reliability of contingent values. J Econ Psychol 25:41–59

    Article  Google Scholar 

  • Kealy MJ, Mongomery M, Dovidio JF (1990) Reliability and predictive validity of contingent values: does the nature of the good matter. J Environ Econ Manag 19:244–263

    Article  Google Scholar 

  • Kountouris Y, Nakic Z, Sauer J (2012) Is the valuation of water quality sensitive to external shocks? Evidence from political instability in Croatia. Paper prepared for presentation at the Agricultural and Applied Economics Association’s 2012 AAEA Annual Meeting, Seattle, Washington

  • Krinsky I, Robb AL (1986) On approximating the statistical properties of elasticities. Rev Econ Stat 68:715–719

    Article  Google Scholar 

  • Liebe U, Meyerhoff J, Hartje V (2012) Test–retest reliability of choice experiments in environmental valuation. Environ Resour Econ 53:389–407

    Article  Google Scholar 

  • Loomis JB (1989) Test–retest reliability of contingent valuation method: comparison of general population and visitor responses. Am J Agric Econ 71:76–84

    Article  Google Scholar 

  • Loomis JB (1990) Comparative reliability of the dichotomous choice and open-ended contingent valuation techniques. J Environ Econ Manag 18:78–85

    Article  Google Scholar 

  • Loomis JB (1992) The evolution of a more rigorous approach to benefit transfer: benefit function transfer. Water Resour Res 38:701–705

    Article  Google Scholar 

  • Louviere JJ, Hensher DA, Swait JD (2000) Stated choice methods: analysis and applications. Cambridge University Press, Cambridge

    Book  Google Scholar 

  • McClelland GH, Schulze WD, Coursey DL (1993) Insurance for low-probability hazards: a bimodal response to unlikely events. J Risk Uncertain 7:95–116

    Article  Google Scholar 

  • McConnell KE, Strand IE, Valdes S (1998) Testing temporal reliability and carry-over effect: the role of correlated responses in test-retest reliability studies. Environ Resour Econ 12:357–374

    Article  Google Scholar 

  • Metcalfe PJ, Baker W (2015) The sensitivity of willingness to pay to an economic downturn. J Environ Econ Policy 4:105–121

    Article  Google Scholar 

  • Mills CJ, Bull RJ, Cantor KP, Reif J, Hrudey SE, Huston P (2000) Health risks of drinking water chlorination by-products: report of an expert working group. Chronic Dis Inj Can 19:91–102

    Google Scholar 

  • Morrison M, Bergland O (2006) Prospects for the use of choice modelling for benefit transfer. Ecol Econ 60:420–428

    Article  Google Scholar 

  • O’Connor DR (2002) Report of the Walkerton inquiry, Ontario Ministry of the Attorney General, Queen’s Printer for Ontario. http://www.archives.gov.on.ca/en/e_records/walkerton/index.html. Cited 24 Jun 2008

  • Payment P, Berte A, Prévost M, Ménard B, Barbeau B (2000) Occurrence of pathogenic microorganisms in the Saint Lawrence River (Canada) and comparison of health risks for populations using it as their source of drinking water. Can J Microbiol 46:565–576

    Article  Google Scholar 

  • Schaafsma M, Brouwer R, Liekens I, De Nocker L (2014) Temporal stability of preferences and willingness to pay for natural areas in choice experiments: a test-retest. Resour Energy Econ 38:243–260

    Article  Google Scholar 

  • Smith VK (2000) JEEM non-market valuation: 1974–1998. J Environ Econ Manag 39:351–374

    Article  Google Scholar 

  • Stevens TH, More TA, Glass RJ (1994) Interpretation and temporal stability of cv bids for wildlife existence: a panel study. Land Econ 70:355–363

    Article  Google Scholar 

  • Swait J, Louviere J (1993) The role of the scale parameter in the estimation and comparison of multinomial logit-models. J Mark Res 30:305–314

    Article  Google Scholar 

  • Train KE (2003) Discrete choice methods with simulations. Cambridge University Press, Cambridge

    Book  Google Scholar 

  • Whitehead JC, Hoban TJ (1999) Testing for temporal reliability in contingent valuation with time for changes in factors affecting demand. Land Econ 75:453–465

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Economics, Brock University, 500 Glenridge Avenue, St. Catharines, ON, L2S 3A1, Canada

    J. Price & D. Dupont

  2. Department of Resource Economics and Environmental Sociology, University of Alberta, 501 General Services Bldg., Edmonton, AB, T6G 2H1, Canada

    W. Adamowicz

Authors
  1. J. Price
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. D. Dupont
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. W. Adamowicz
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to D. Dupont.

Electronic supplementary material

Below is the link to the electronic supplementary material.

Supplementary material 1 (docx 32 KB)

Appendices

Appendix A: Sample Format A and Format B Choice Scenarios

Sample Format A Question

figure a

Sample Format B Question

figure b

Appendix B

See Table 7.

Table 7 Single-equation conditional logit model with scale adjustments
Full size table

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Price, J., Dupont, D. & Adamowicz, W. As Time Goes By: Examination of Temporal Stability Across Stated Preference Question Formats. Environ Resource Econ 68, 643–662 (2017). https://doi.org/10.1007/s10640-016-0039-x

Download citation

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10640-016-0039-x

Keywords

JEL Classification

Search

Navigation