More random or more deterministic choices? The effects of information on preferences for biodiversity conservation

Citation

Czajkowski M & Hanley N (2012) More random or more deterministic choices? The effects of information on preferences for biodiversity conservation. Economics Discussion Paper, 2012-06.

Abstract
For many years, stated preference researchers have been interested in the effects of information onwillingness to pay for environmental goods. Within the random utility model, information about anenvironmental good might impact on preferences and on scale (error variance), both between andwithin samples of choices. In this paper, we extend the G‐MNL model to investigate the effects ofdifferent information sets on choices over the management of biodiversity in the UK, looking specificallyat moorlands managed for red grouse shooting. Specifically, we make the individual scale parameter afunction of observable (dataset‐specific) characteristics. Our results show that changing information setsresults in significant differences in the mean scale between datasets, and in the variance of scale.Respondents are more deterministic in their choices and show lower within‐sample scale heterogeneityin the alternative information treatment. Changes in information provision also effect willingness to payestimates, reducing the value people place on the conservation of two iconic birds of prey. The methodsused will also be of interest to researchers who need to combine choice experiment data sets.

Keywords
choice modelling;information effects;scale;scale heterogeneity;G‐MNL;heather moorland management;raptor conservation;combined SP‐RP

JEL codes

• C59: Econometric Modeling: Other
• C81: Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
• Q51: Valuation of Environmental Effects
• Q57: Ecological Economics: Ecosystem Services; Biodiversity Conservation; Bioeconomics; Industrial Ecology
• Q15: Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
• D12: Consumer Economics: Empirical Analysis

• SEDP-2012-06-Czajkowski-Hanley.pdf