Do Respondents’ Perceptions of the Status Quo Matter in Non-Market Valuation with Choice Experiments? An Application to New Zealand Freshwater Streams

Abstract

Many issues relating to the sustainability of environmental resource use are informed by environmental valuation studies with stated preference surveys. Within these, researchers often provide descriptions of status quo conditions which may differ from those perceived by respondents. Ignoring this difference in utility baselines may affect the magnitude of estimated utility changes and hence bias benefit estimates of proposed environmental policies. We investigate this issue using data from a choice experiment on a community's willingness to pay for water quality improvements in streams. More than 60% of respondents perceived streams' water quality at the status quo to be better than the description we provided in our scenario. Results show that respondents who could provide details of their perception of the status quo displayed stronger preferences for water quality improvements-and hence higher marginal willingness to pay-than their counterparts. However, respondents who referred to their own status quo description displayed a higher inclination to prefer the status quo, while other respondents tended to prefer the proposed improvements. We argue this might be linked to the amount of knowledge each group displayed about the status quo: a kind of reluctance to leave what one believes he/she knows well. OPEN ACCESS

Choosing not to choose: A meta-analysis of status quo effects in environmental valuations using choice experiments

“…This result contradicts the findings reported by Marsh et al (2011), which is one of the few papers that have tested the influence of scenario definition on SQE. The results of their DCE application suggest that participants who referred to their own SQ description had a higher preference towards the SQ, whereas participants individuals facing a predefined SQ tended to prefer the improvements proposed by the analysts.…”

Shifted Baselines Reduce Willingness to Pay for Conservation

“…Better communication of how algal increases are linked to reef degradation may be key in garnering public support for efforts such as the removal of algae from reefs, the reduction in nutrient pollution helping to drive increases (Smith et al, 2008), or the protection of herbivorous fish that maintain low levels of algae and facilitate coral recovery (Bellwood et al, 2004;Jackson et al, 2014). Our results demonstrate that shifting baselines can impact WTP, and build on previous work showing the importance of accounting for perceptions and subjective status-quo beliefs when eliciting WTP for ecosystem restoration (Meyerhoff and Liebe, 2009;Domínguez-Torreiro and Soliño, 2011;Marsh et al, 2011;Kataria et al, 2012;Artell et al, 2013). These studies also provide evidence that loss aversion can influence WTP (Neuman and Neuman, 2007;Bateman et al, 2009;EspinosaGoded et al, 2010;Masiero and Hensher, 2010), which may also be a possible mechanism to help explain our results.…”

“…Our results provide empirical evidence that shifting baselines, or failure to perceive past change, affect support for conservation and complement work that shows that perceptions of the current environment or the "status-quo" impact WTP (Meyerhoff and Liebe, 2009;Domínguez-Torreiro and Soliño, 2011;Marsh et al, 2011;Kataria et al, 2012;Artell et al, 2013). Specifically, we find that those who perceive more change in coral reef ecosystems are willing to pay more to protect them.…”

“…Typically these studies focused on valuing an environmental good or policy directly. There is a growing literature in non-market valuation that has focused on subjective status-quo beliefs and how perceptions of environmental quality can impact WTP for environmental policies (Whitehead, 2006;Meyerhoff and Liebe, 2009;Domínguez-Torreiro and Soliño, 2011;Marsh et al, 2011;Kataria et al, 2012;Artell et al, 2013). While this approach has shown WTP to be a function of perception of current environmental status, it has not been used to directly test how perception of change over time, or baseline shifts, impacts WTP for conservation.…”

Chinese Public Willingness to Pay to Avoid Having Nuclear Power Plants in the Neighborhood

“…They made use of property values or willingness to pay (WTP)/willingness to accept (WTA) of the public [59][60][61]. For example, Ansolabehere and Konisky [51] measured the public attitude towards nuclear power construction, and found that most Americans oppose having nuclear power plants in their neighborhood.…”