Choice Modelling Approaches: A Superior Alternative for Environmental Valuatioin?

Abstract

In this paper, we examine some popular`choice modelling' approaches to environmental valuation, which can be considered as alternatives to more familiar valuation techniques based on stated preferences such as the contingent valuation method. A number of choice modelling methods are consistent with consumer theory, their focus on an attribute-based theory of value permits a superior representation of many environmental management contexts. However, choice modelling surveys can place a severe cognitive burden upon respondents and induce satisficing rather than maximising behavioural patterns. In this framework, we seek to identify the best available choice modelling alternative and investigate its potential to`solve' some of the major biases associated with standard contingent valuation. We then discuss its use in the light of policy appraisal needs within the EU. An application to the demand for rock climbing in Scotland is provided as an illustration.

Traffic related noise and air quality valuations: evidence from stated preference residential choice models

“…This is consistent with evidence in the broader area of environmental valuation where there have been many more studies that have compared different methods (Bishop and Heberlein, 1979;Brookshire et al, 1982;Boxall et al 1996;Carson et al, 1996;Foster et al, 1997;Adamowicz et al, 1994, 1997, 1998, Hanley et al, 1998a, 1998b, 2002. As Hanley et al (2001) point out, the evidence is clear that the values obtained from and the intended payments of CVM are generally less than the values and payments of actual behaviour. On the other hand, the findings of SP models have generally compared favourably with equivalent RP results (Adamowicz et al, 1994(Adamowicz et al, , 1997Boxall et al, 1996;Hanley et al, 2002).…”

Valuing and Evaluating Marine Ecosystem Services: Putting the Right Price on Marine Environments?

“…Choice modelling is a process whereby respondents rank alternative scenarios that may be diff erentiated by more than one attribute. Th rough including cost as one of these attributes, willingness to pay can be derived indirectly rather than explicitly, as in the case of contingent valuation, thus avoiding several diffi culties of contingent valuation (Hanley et al 2001). However, the complexity of ranking multiple scenarios can limit the potential for choice modelling to measure a suffi ciently wide range of options.…”

The impact of the water rights system on smallholder irrigators' willingness to pay for water in Limpopo province, South Africa

“…Respondents are presented with various descriptions of a good, differentiated by their attribute levels and asked to rank the various alternatives. The technique originates from marketing and transportation science but more recently choice models, of which CR is a special form, have proven to be useful in valuing other multidimensional interventions (Hanley et al, 2001, Bateman et al, 2006Burton et al, 2007;Kanyoka et al, 2008;Mondelaers et al, 2009;Do and Bennett, 2009). Like other choice models, CR avoids an explicit elicitation of respondents' willingness to pay.…”

“…CR however provides more information than classical choice models, because its rankings show more about the preferences of the respondents (Holmes and Adamowicz, 2002). There are some potential problems in using the method: these include the complex nature of the statistical design, the selection of the appropriate attributes and levels and the cognitive difficulties that participants may experience when ranking choices (Hanley et al, 2001). Typically, the design of a choice experiment involves three stages (Bennett and Adamowicz, 2001;Holmes and Adamowicz, 2002).…”