Waiting or acting now? The effect on willingness-to-pay of delivering inherent uncertainty information in choice experiments

Figuerola, Catalina M. Torres; Faccioli, Michela; Font, Antoni Riera

doi:10.1016/j.ecolecon.2016.09.001

Cited by 23 publications

(28 citation statements)

References 64 publications

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“…This decision has been motivated by the results in Torres et al (2015), showing the significance of the effect on WTP of inherent uncertainty. Results of our study have shown that preferences for preservation policies are driven by intergenerational equity concerns regardless of how risky the situation is expected to be.…”

Section: Discussionmentioning

confidence: 99%

“…We use data collected between April and June 2013 for the experiment described in Torres et al (2015). This is a suitable case study because it focuses on management responses to CC, a time-persistent environmental problem.…”

Section: The Choice Experiments Applicationmentioning

confidence: 99%

“…Given that both T=10 and T=70 represent future situations, the analysis has taken into account information about the inherent uncertainty of the scenario, following the approach presented in Torres et al (2015). To reflect the idea that there is uncertainty regarding CC impacts, the levels of the 'specialist' bird species attribute, reflecting the results of current or business-as-usual (BAU), moderate and high efforts, are subject to two possible states of nature for each given time horizon: impact occurrence or impact non-occurrence.…”

Section: The Choice Experiments Applicationmentioning

confidence: 99%

“…To estimate preferences over T=70 and compare them with those obtained over T=10, the same RUM model specification as in Torres et al (2015) has been considered for each time period and under each scenario of probability of impacts' occurrence. The model is a random parameter logit (RPL) to take individual-specific preferences into account, which requires assuming that parameters are random.…”

Section: Modeling Choicesmentioning

confidence: 99%

“…Concerns over long-and very long-run effects of environmental policies can also be seen as being consistent with the precautionary principle, as the future is characterized by inherent uncertainties. Inherent uncertainty, which has been found to significantly affect social preferences in Torres et al (2015), refers to the fact that, due to non-linear and chaotic behavior of ecosystems, environmental impacts are unpredictable and uncontrollable and, consequently, so are the results of policies to manage them. Based on this, in the face of unpredictable changes in ecosystems' functioning, which can potentially lead to irreversible environmental damages, if current generations are concerned about sustainability they should be willing to preserve some critical level of environmental resources for themselves and for future generations.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Do we care about sustainability? An analysis of time sensitivity of social preferences under environmental time-persistent effects

Faccioli

Hanley

Figuerola

et al. 2016

Journal of Environmental Management

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Environmental cost-benefit analysis has traditionally assumed that the value of benefits is sensitive to their timing and that outcomes are valued higher, the sooner in time they occur following implementation of a project or policy. Though, this assumption might have important implications especially for the social desirability of interventions aiming at counteracting time-persistent environmental problems, whose impacts occur in the longand very long-term, respectively involving the present and future generations. This study analyzes the time sensitivity of social preferences for preservation policies of adaptation to climate change stresses. Results show that stated preferences are time insensitive, due to sustainability issues: individuals show insignificant differences in benefits they can experience within their own lifetimes compared to those which occur in the longer term, and which will instead be enjoyed by future generations. Whilst these results may be specific to the experimental design employed here, they do raise interesting questions regarding choices over time-persistent environmental problems, particularly in terms of the desirability of interventions which produce longer-term benefits.

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Section: Discussionmentioning

confidence: 99%

Section: The Choice Experiments Applicationmentioning

confidence: 99%

Section: The Choice Experiments Applicationmentioning

confidence: 99%

Section: Modeling Choicesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Do we care about sustainability? An analysis of time sensitivity of social preferences under environmental time-persistent effects

Faccioli

Hanley

Figuerola

et al. 2016

Journal of Environmental Management

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Measuring the economic impact of climate-induced environmental changes on sun-and-beach tourism

Enríquez

Bestard

2020

Climatic Change

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Stated Preferences for Conservation Policies Under Uncertainty: Insights on the Effect of Individuals’ Risk Attitudes in the Environmental Domain

Faccioli

Kühfuss

Czajkowski

2018

Environ Resource Econ

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The outcome of a conservation policy is often subject to uncertainty. In stated preference valuation, it is increasingly recognised that uncertainty affects preferences for the outcomes of environmental policies. However, there is also agreement that the effect of uncertainty and people's attitudes towards risk need to be better understood. To shed more light on the impact of risk, we designed a discrete choice experiment to compare preferences for environmental outcomes under climate change across two split samples. Each sample was confronted with a scenario where results were presented as certain or uncertain, but were otherwise associated with the same expected values. We found significant differences between the certain and the uncertain treatment, with uncertain outcomes being associated with more extreme utility levels and willingness to pay, in absolute terms. This finding was confirmed irrespective of whether gains or losses were considered and despite sensitivity to uncertainty-specific to the socio-demographic profile. Our results suggest that individuals are not risk neutral in the presence of uncertainty around environmental outcomes. These findings are crucial to better understand stated preferences for conservation policies in risky contexts. Our results reinforce the idea that uncertainty should be explicitly incorporated in the design of stated preference studies to better inform policy.

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Waiting or acting now? The effect on willingness-to-pay of delivering inherent uncertainty information in choice experiments

Cited by 23 publications

References 64 publications

Do we care about sustainability? An analysis of time sensitivity of social preferences under environmental time-persistent effects

Do we care about sustainability? An analysis of time sensitivity of social preferences under environmental time-persistent effects

Measuring the economic impact of climate-induced environmental changes on sun-and-beach tourism

Stated Preferences for Conservation Policies Under Uncertainty: Insights on the Effect of Individuals’ Risk Attitudes in the Environmental Domain

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