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The structure of stated preference questions to value consumption from public infrastructure can vary depending on the conditions of consumption facing the household. Specifically, a good could be offered as a quasi-public or quasi-private good. This paper demonstrates how consumption from two alternative electricity allocation options can be valued using two types of stated preference questions. Since surveyed households were asked two types of questions, the authors develop a joint model of a contingent valuation question and a contingent quantity behavior response that allows for correlation in error terms across models. In their application to two villages in Rwanda, the authors find higher WTP for electricity consumed as a quasi-private good rather than a quasi-public good, with four hours of electricity per day, only in the evening. They also find correlation in the error terms across the two models, suggesting that their joint estimator is more efficient than estimating each model individually.
We present a demonstration of a Bayesian spatial probit model for a dichotomous choice contingent valuation method willingness-to-pay (WTP) questions. If voting behavior is spatially correlated, spatial interdependence exists within the data, and standard probit models will result in biased and inconsistent estimated nonbid coefficients. Adjusting sample WTP to population WTP requires unbiased estimates of the nonbid coefficients, and we find a $17 difference in population WTP per household in a standard vs. spatial model. We conclude that failure to correctly model spatial dependence can lead to differences in WTP estimates with potentially important policy ramifications.
While the summit of the Antarctic Plateau has long been expected to harbor the best ground-based sites for terahertz (THz) frequency astronomical investigations, it is only recently that direct observations of exceptional THz atmospheric transmission and stability have been obtained. These observations, in combination with recent technological advancements in astronomical instrumentation and autonomous field platforms, make the recognition and realization of terahertz observatories on the high plateau feasible and timely. Here, we will explore the context of terahertz astronomy in the era of Herschel, and the crucial role that observatories on the Antarctic Plateau can play. We explore the important scientific questions to which observations from this unique environment may be most productively applied. We examine the importance and complementarity of Antarctic THz astronomy in the light of contemporary facilities such as ALMA, CCAT, SOFIA and (U)LDB ballooning. Finally, building from the roots of THz facilities in Antarctica to present efforts, we broadly highlight future facilities that will exploit the unique advantages of the Polar Plateau and provide a meaningful, lasting astrophysical legacy.
This article reviews the rationale for and various approaches used by economists to incorporate distributional consequences of projects or policies into benefit-cost analyses. Approaches reviewed include distributional weights and metrics based on the Lorenz curve. Analysis of distributional issues in partial equilibrium and general equilibrium settings are briefly reviewed. We present an empirical demonstration of how the contingent valuation method (CVM) and hedonic property methods (HPM) can be used to quantify how non-market environmental benefits are distributed by income and ethnicity. Using CVM, the distribution of non-market benefits can be cross-tabbed with respondent demographics, so that a variety of “distributions” of benefits by relevant demographic groups can be calculated. Using the HPM, the analyst can statistically test to see if the implicit price gradient varies with differences in income and ethnicity. In our empirical example, we find that ethnicity and income interaction terms on the implicit price gradient are statistically significant suggesting differential effects of National Forest fire suppression policies on Hispanics and low income households.
The Orbit demand model allows the magnitude of the calibration to stated purchase intentions to vary based on the magnitude of the stated quantities. Using an empirical example of stated trips, we find that the extent of calibration varies substantially with less correction needed at small stated trips (-25%) but larger corrections at higher quantities of stated visits (-48%). We extend the Orbit model to calculate consumer surplus per stated trip of $26. Combining the calibrations in stated trips and value per trip, the Orbit model provides estimates of annual benefits from 60% to 111% less than the count data model.
The problem of endogenous stratification associated with on-site sampling has been overlooked in the Contingent Valuation Method (CVM). We find that using on-site samples of visitors overstates visitor willingness to pay (WTP) estimates relative to a household sample of visitors, and substantially overstates the unconditional population values. We provide two methods of correcting WTP of on-site samples. The uncorrected on-site sample CVM yields WTP of $132 per trip, while visitor WTP obtained from a random sample of households had a value of $66 per trip. Adaptation of choice-based sampling correction estimator to the on-site CVM data yields $73 per trip, not statistically different from the visitor value from the household survey, but significantly different from the uncorrected on-site sample value.
We estimate adults' willingness to pay (WTP) to reduce health risks to their own or other families' infants to test for altruism. A conjoint analysis of adults paying for bottled water found marginal WTP for reduction in risk of shock, brain damage, and mortality in the cash treatment of $2, $3.70, and $9.43, respectively. In the hypothetical market these amounts were $14, $26, and $66, indicating substantial hypothetical bias, although not unexpected due to the topic of infant health. Statistical tests confirm a high degree of altruism in our WTP results, and altruism held even when real money was involved.
We update the joint estimation of revealed and stated preference data of previously published research to allow for joint estimation of the Travel Cost Method (TCM) portion using count data models. The TCM estimation also corrects for truncation and endogenous stratification as well as overdispersion. The joint estimation allows for testing consistency of behavior between revealed and stated preference data rather than imposing it. We find little gain in estimation efficiency, but our joint estimation might make a significant improvement in estimation efficiency when the contingent valuation scenarios involve major changes in site quality not reflected in the TCM data.
This paper compares protest rates and willingness to pay (WTP) using a payment card versus single and double bounded voter referendum contingent valuation question formats. Using a chi-square test, the payment card had a significantly higher protest rate (6.7 per cent) than the voter referendum question format (2.2 per cent). The median WTP of the single bounded and double bounded referendum format exceeds the payment card by a factor of nine and seven, respectively. The median WTP from the referendum formats represent about 8 per cent of income, while the payment card results represents about 1 per cent of income. These large differences in WTP between question formats are double what have been found in past studies. We believe this result may be due to excessive yea saying at high bid amounts in the dichotomous choice question formats. This behavior may arise in our case study in rural China because citizens have not had a long history of open elections or voting on tax referenda.
A method of paired comparison is adapted for use in estimating economic measures of value. The method elicits multiple binary choices for paired items in a choice set. Probability distributions and economic values are estimated nonparametrically and parametri-cally. The method is applied in an experimental context with a choice set composed of four private goods and several sums of money. The sample's median value estimates for the goods are generally not different than the market prices for these goods. People who are in the market for a good value it higher than those not in the market for the good.
The two chapters by Terry Anderson (Chapter 12) and Don Coursey (Chapter 11) illustrate contrasting optimism and pessimism of the first two authors. Anderson is optimistic that privately negotiated agreements can make major contributions to saving endangered species and their habitats. He is pessimistic about “ … whether the [government] agency is producing what the citizen/agents desire” (Anderson, pp. 232). In contrast, Coursey appears optimistic that despite what he acknowledges as the shortcomings of the political process, “ … competition within the political system will generate a most preferred expenditure pattern across endangered animals” (Coursey, pp. 202). At least this is “the premise entertained throughout the analysis.” And a very entertaining premise it turns out to be in his chapter: Coursey tries to convince us that agency expenditures can be used for more than reflecting the agency's priorities among species protection efforts; they can be used for valuation. As discussed below, this suffers from several weaknesses, even if Anderson's pessimism about efficiency of government agency actions is overcome. Coursey's pessimism is directed toward nonmarket valuation techniques, even though they pass many of the tests Coursey sets as his standard.
The chapter by Watts et al. (Chapter 10) reflects the realism of actually quantifying the local economic impacts and national efficiency costs of critical habitat determinations with limited analysis budgets and time. This pragmatic chapter serves as a template for performing economic impact studies and at the same time determining if there is any real net cost to the nation as a whole.
Statistical summarizations of literature review databases using meta-regression analysis provide insight into the differences in past estimates of economic variables such as benefits and price elasticities. The panel nature of the data is an issue that has not received adequate attention in past meta-analyses. This paper conceptually and empirically explores the complexity of stratifying data into panels that model the potential correlation and heterogeneity of past outdoor recreation benefit research. Although our tests of three stratifications of the data did not discern panel effects, the inherent complexity of the data maintains a strong presumption of heterogeneous strata.
Inclusion of multi-destination and multi-purpose visitors has an appreciable influence on a standard count data travel cost model derived estimate of willingness to pay but the differences are not statistically significant. We adapt a more general travel cost model (TCM) of Parsons and Wilson (1997) that allows for inclusion of multi-destination visitors as incidental demand to allow estimation of an unbiased measure of single and multi-destination willingness to pay for whale viewing using a single pooled equation. The primary purpose trip values from the standard TCM and simple generalized TCM model are identical at $43 per person per day and neither are significantly different from the $50 day value from a generalized model that distinguishes between joint and incidental trips. The general models avoid underestimation of total recreation site benefits that would result from omitting the consumer surplus of multi-destination visitors.
Wilderness designation continues to be a contentious effort and must be fully justified even in wealthy countries such as the USA. An important consideration in setting priorities for additional designations of Wilderness is to ensure that under-represented ecosystems are protected. The utility of Geographic Information Systems in performing this task is illustrated using data on ecoregions and areas in the National Wilderness Preservation System to determine the relative protection currently afforded to different ecoregions in the continental USA. We find that 23 of the 35 ecoregions have less than 1% of their land area protected as Wilderness, and 7 of the 35 have no land protected as Wilderness whatsoever. While much of the land with little protection is in areas dominated by private land ownership in the mid-west and southeast, a surprisingly large amount of land in the Intermountain states of Nevada and Utah, which is in public ownership, is substantially under-represented in the National Wilderness Preservation System as well. The implications of this analysis for wilderness allocation strategies are detailed. The technique illustrated in this paper is a useful aid in designing protected area strategies in countries throughout the world.
Most previous published estimates of the economic costs of climate change (i.e. changes in temperature and precipitation) have given little attention to the effects on outdoor recreation. Nordhaus has not included any estimates of effects of climate change on recreation or recreationally used natural resources (Nordhaus, 1991, 1993). The National Academy of Sciences (1992 pp. 607–8) devotes only about two pages out of 900 to the issue. However, they indicate that outdoor recreation is more sensitive to climate change than other sectors of the economy due to recreation's close link to natural resources (National Academy of Sciences, 1992 p. 41). Ewert (1991 p. 366) also states that with respect to the effect of global climate change on recreation “… outdoor recreation is an example in which users have a direct interaction with the natural environment…” Cline (1992 pp. 122–3) includes only a rough estimate of the effect of climate change on snowskiing in his category of leisure activities. Even Fankhauser's recent book (1995) provides only a one paragraph discussion of recreation before concluding that “Unfortunately, data for monetary valuation are not available for either sector” (1995 p. 43). Fankhauser goes on to say “Nevertheless, the problem of greenhouse damage estimates is perhaps not so much the accuracy of the valuation methods as such, but the fact they have not yet been applied to the problem to a sufficient degree” (1995 p. 21).
A combined telephone contact-mail booklet-telephone interview of California and New England households regarding their willingness to pay for fire management in California and Oregon's old-growth forests was performed to test hypotheses regarding the spatial extent of the public goods market. Using a multiple-bounded contingent valuation question, the study found that New England households' annual willingness to pay for the California and Oregon programs was statistically different from zero. This analysis points out that households receive benefits from fire protection of old-growth forests in states other than their own. In this case study, limiting the survey sample to state residents where the National Forest is located would reflect about 20% of the national benefits. However, using resident values as a proxy for nonresidents would overstate the national benefits by 75%, since the values per household are significantly different. This finding suggests more emphasis in future surveys on selecting an institutionally and economically relevant sample frame rather than an expedient one.
This paper empirically tested the three conditions identified by McConnell for equivalence of the linear utility difference model and the valuation function approach to dichotomous choice contingent valuation. Using a contingent valuation survey for deer hunting in California, two of the three conditions were violated. Even though the models are not simple linear transforms of each other for this survey, estimates of mean willingness to pay and their associated 95% confidence intervals around the mean were quite similar for the valuation methods.
Recent efforts to refine the concept of existence value and to empirically measure it has led to an unnecessary narrowing of the concept of existence value. This paper uses the literature on public goods to argue that existence value is a much broader concept than proposed by several authors. Two commonly used but different empirical approaches to measuring existence values are compared and shown to lead to statistically different decompositions of total value between use and existence categories.
Fourteen years of Micronesian political status negotiations culminated in 1983 with the final signature of the Compact of Free Association between the United States and the Governments of Palau, the Marshall Islands and the Federated States of Micronesia (FSM). Upon being approved in accordance with its terms and the constitutional processes of the signatory Governments, the Compact will establish bilateral relationships between the United States and the new states emerging from the Trust Territory of the Pacific Islands. Approval of these future political status arrangements will also provide the basis for termination of the Trusteeship Agreement between the United States and the United Nations Security Council. The Compact defines an international political partnership between the United States and the freely associated states that is without precise precedent in international law or U.S. domestic practice. Under the Compact, each freely associated state will enjoy control over its internal affairs and its foreign relations, including competence to enter into international agreements. Mutual security arrangements, set forth in the Compact and its separate agreements, provide for a U.S. defense umbrella during the life of free association and long-term exclusion of third-country military forces, should any or all of the freely associated states opt for independence at some future date.
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