Household Versus Individual Valuation: What’s the Difference?

Abstract

Abstract.Standard practice in stated preference typically blurs the distinction between household and individual responses, but without a clear theoretical or empirical justification for this approach. To date there have been no empirical tests of whether values for say a two adult household elicited by interviewing one randomly selected adult are the same as the values generated by interviewing both adults simultaneously. Using cohabiting couples, we conduct a choice experiment field study valuing reductions in dietary health risks. In one treatment a random individual is chosen from the couple and interviewed alone; in the other treatment, both partners are questioned jointly. We find significant differences in household values calculated from joint as opposed to individual responses, with further variation between the values elicited from men and women. Our results question the assumption, implicit in common practice, that differences between individually and jointly elicited estimates of household values can effectively be ignored.

Experimental auctions, collective induction and choice shift: willingness-to-pay for rice quality in Senegal

“…Others have applied similar theories on households, relating choice shift to the property of income pooling (e.g. Munro, 2005;Bateman and Munro, 2009). Finally, environmental economists have similarly invoked a concept of choice shift to question whether individual preferences are robust to aggregation: '[…] group willingness to pay for a project that enhances environmental quality will systematically differ from the sum of individual net benefits' (Howarth and Wilson, 2006: 3).…”

“…Collective induction treatment (Demont et al, 2012) Stated and revealed preference research, experimental auctions Individual versus household valuation (Bateman and Munro, 2009) Democratic theory, deliberative valuation (Sagoff, 1988;Howarth and Wilson, 2006), market stall (MS) approach (Macmillan et al, 2002) Valuation of public goods, environmental economics Figure 1. Epistemological representation of research disciplines and cross-cutting themes connected to the empirical concept of the collective induction treatment…”

Asking for Individual or Household Willingness to Pay for Environmental Goods?

“…A trivial fact, however, once respondents are part of multi-person households it becomes almost impossible to elicit an "uncontaminated" WTP measure that with some degree of confidence can be aggregated over one or the other response unit (e.g. Quiggin 1998;Bateman and Munro 2006). The correct unit will not only depend on how and to whom the WTP question is phrased, but on the respondent's self-perceived agency and the type of resource allocation model prevailing in her 1 household (Delaney and O'Toole 2006;Strand 2007).…”

Who Counts in Evaluating the Effects of Air Pollution Policies on Households? Non-Market Valuation in the Presence of Dependencies

“…The recent findings of Bateman and Munro [2009] and Lindhjem and Navrud [2009] confirm that adult decision makers in a given household react differently to the same choice situation. This is true even when they are asked to answer for the household.…”

“…Bateman and Munro [2009] Section II develops the conceptual basis for our evaluation of how dependency relationships among household members may influence responses to stated preference questions describing policy changes that would affect the intensity of that dependency.…”