Transfers of landowner willingness to accept: A convergent validity and reliability test using choice experiments in two Canadian watersheds

Abstract

We examined the reliability and validity of transferring estimates of marginal willingness to accept and compensating surplus. In doing so, we used data from two case studies applying choice experiments to elicit landowner preferences for incentive‐based wetland conservation programs in two adjacent watersheds in Southern Ontario, Canada (Grand and Upper Thames Rivers in parallel in 2013). The choice experiment data were modeled in willingness to accept space using a generalized multinomial logit. Transfer reliability was investigated by calculating transfer errors, while validity was investigated by testing the equality of utility functions as well as by assessing the similarity of welfare estimates using traditional hypothesis tests and equivalence tests. The main findings are that transfers of willingness to accept are similar to existing transfers of willingness to pay in terms of validity and reliability. Additionally, a sensitivity analysis finds that including demographic variables in the choice model can lead to lower transfer validity though does not substantially affect reliability. Though further research is required, our results suggest that willingness to accept can be transferred as part of policy analyses.