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Abstract:
We consider the relationship between tourism and economic growth for Latin American countries since 1985 until 1998. The analysis proposed is based on a panel data approach and the Arellano-Bond estimator for dynamic panels. We obtain estimates of the relationship between economic growth and growth in tourists per capita conditional on main macroeconomic variables. We show that the tourism sector is adequate for the economic growth of medium or low-income countries, though not necessarily for developed countries. We then invert the causality direction of the analysis. Rather than explaining economic growth, we try to explain tourism arrivals conditional on GDP and other covariates such as safety, prices and education level, and investment in infrastructures. We employ a generalised least squares AR(1) panel data model. The results provide evidence that low-income countries seem to need adequate levels of infrastructures, education and development to attract tourists. Medium-income countries need high levels of social development like health services and high GDP per capita levels. Finally, the results disclose that price of the destination, in terms of exchange rate and PPP is irrelevant for tourism growth.

Tourism, Economic growth, Panel data

Abstract:
In this paper we present welfare estimates from a contingent valuation (CV) study which investigates the potential benefits derived by tourists from the implementation of a programme aimed at preserving the traditional agricultural landscape in a typical Mediterranean area: the National Park of Cilento (Southern Italy). Here, under current market conditions, farming activities are being gradually abandoned. As a result, the alternative to the cultivated landscape is a much less appealing one, where the various stages of progression of land abandonment dominate. To ease the cognitive task of respondents, CV responses were elicited using the discrete choice referendum format. To supplement the inherent inefficiency of discrete choice responses one follow-up question was also administered. The sample responses are analysed by three methods. First, by a log-normal model which allows a random utility interpretation. Then by a series of beta models, which require the definition of the maximum in the range of willingness to pay and reflect a purely statistical approach. Finally, by means of the non-parametric Kaplan-Meier-Turnbull probability estimates, which is robust to potential parametric mis-specifications. The welfare estimates obtained by various methods were similar and approached one Euro per day-visit. Our results indicate that referendum CV provides plausible estimates of WTP for agricultural landscape conservation from the tourists' population. From a conservative inference it appears that in 1997 the traditional farming produced a landscape externality for tourists which reached at least 8 million Euro. Provision of landscape is only one of many unremunerated activities provided by farmers, so more research should be aimed at valuing public goods produced by farming in recreationally valuable areas and elsewhere. We argue that the policy tools currently employed in the European Common Agricultural Policy, for the purpose of rural landscape preservation, are inadequate in the context of typical Mediterranean agriculture. Here the main cause of rural landscape deterioration seems to be the abandonment of agricultural production, rather than its intensification, so the main features of interest are other than those currently protected by EU policy.

Abstract:
We report on a discrete-choice CV study conducted in Germany to value the WTP for biodiversity protection in less developed countries. To systematically investigate survey realism and subjective threat assessment from the loss of biodiversity described in the scenario the study includes questions to uncover the constructs of Protection Motivation Theory, which is introduced to the CV literature. The patterns of responses to such questions are analysed using an Expectation-Maximization algorithm to derive class membership probabilities. These are found to match the predictions of Protection Motivation Theory and systematically improve the logistic analysis of the WTP responses.

Biodiversity valuation, Protection motivation theory, Latent class analysis

Abstract:
We investigate the reliability of transferring benefit estimates of forest recreation obtained from discrete choice CV data and conditional on forest-specific attributes. The transfer reliability is checked against the forest-specific estimates of mean and median willingness to pay. We report and discuss the outcomes of formal tests of the null hypothesis of no difference for 26 recreational forests in Ireland, when the value transfer is based on single and double-bounded data collected at the remaining 25 forests. Contrary to the unconditional value transfers of Downing and Ozuna [6] we find that value transfers conditional on site-specific recreational attributes are mostly transferable.

benefit transfer, estimate reliability, forest recreation, non-market valuation, discrete-choice contingent valuation

Abstract:
The paper reports the results of three stated preference surveys in urban-rural areas in Northern England. The objective is that of valuing the economic benefits from traffic calming schemes in two areas with different traffic problems from stated preference observations. Both choice-experiments and contingent valuation methods are employed using advanced modelling. Fixed and random coefficient utility models are estimated from responses of the choice-experiments, while double-bound spike models are used for contingent valuation. Welfare estimates from the different methods are compared. The role of accounting for repeated choices is found to be of relevance. Choice modelling is designed to disentangle the values of benefits from 5 major attributes of traffic calming schemes (noise abatement, speed control, community severance, aesthetic layout and tax burden).

Keywords: Local public goods, non-market valuation, stated preference, choice experiments, traffic calming

Abstract:
In discrete choice experiments respondents are generally assumed to consider all of the attributes across each of the alternatives, and to choose their most preferred. However, results in this paper indicate that many respondents employ simplified lexicographic decision-making rules, whereby they have a ranking of the attributes, but their choice of an alternative is based solely on the level of their most important attribute(s). Not accounting for these simple decision-making heuristics introduces systemic errors and leads to biased point estimates, as they are a violation of the continuity axiom and a departure from the use of compensatory decision-making. In this paper the implications of lexicographic preferences are examined. In particular, using a mixed logit specification this paper investigates the sensitivity of individual-specific willingness to pay (WTP) estimates conditional on whether lexicographic decision-making rules are accounted for in the modelling of discrete choice responses. Empirical results are obtained from a discrete choice experiment that was carried out to address the value of a number of rural landscape attributes in Ireland.

Continuity axiom, Discrete Choice Experiments, Lexicographic Preferences, Mixed logit, Individual-Specific Willingness to Pay

Abstract:
Selectivity bias caused by protest responses in Contingent Valuation studies can be detected and corrected by means of sample selection models. This paper compares two methods: the Heckman 2-steps method and the full ML, applied to data on forest recreation - where WTP is elicited as a continuous variable. Either method has its own drawback: computational complexity for the ML method, susceptibility to collinearity problems for the 2-steps method. The latter problem is observed in our best fitting specification, with the ML estimator outperforming the 2-steps. In this application, overlooking the effect of protest responses would cause an upwards bias of the final estimates of WTP.

Contingent valuation, protest responses, sample selection, MLE, two-steps method

Abstract:
We present an empirical estimation of the distribution of WTP for effective speed reduction via implementation of local traffic calming schemes. Random samples are drawn from the populations of households of three villages intersected by main trunk roads with varying through traffic conditions. We retrieve the underlying WTP distributions from discrete-choice responses to site-specific contingent valuation studies accounting for zero-bidders. We then test the hypothesis of different distributions across villages. The statistical analysis is first conducted by means of a parametric specification and then by a totally non-parametric one. Stated welfare changes for effective speed reduction are found to be sizeable and the parameters of the random utility models are related to differences in objective speed measures.

Abstract:
Excessive speed is a major contributory factor in a large proportion of deaths and serious injuries on British roads. One approach to tackling the speeding problem is the use of traffic calming measures as a means of enforcing speed restrictions along roads running through populated areas. But speed reduction is only one of the benefits of traffic calming. This paper reports the results of a series of choice experiments that were used to investigate the willingness to pay (WTP) of a sample of local residents in three English towns for traffic calming measures that would achieve a range of reductions in speed, noise and community severance. Utility difference indices are estimated from logit models based on responses to the choice experiments. These revealed that local people had a positive WTP for a reduction in the negative impacts of road traffic and for more attractive, rather than basic, designs of the traffic calming measures. Some specifications of the logit model corroborate the hypothesis that WTP for reducing the negative impacts of traffic calming is lower for local households living outside visible and audible range of the road.

Abstract:
Reported in this paper are the findings from two discrete choice experiments that were carried out to address the value of a number of farm landscape improvement measures within the Rural Environment Protection (REP) Scheme in Ireland. Image manipulation software is used to prepare photorealistic simulations representing the landscape attributes across three levels to accurately represent what is achievable within the Scheme. Using a mixed logit specification willingness to pay (WTP) distributions based on the parameter estimates obtained from the individual conditional distributions are derived. These estimates are subsequently adjusted and combined to account for baselines and levels of improvement resulting from the implementation of the REP Scheme. Individual-specific WTP estimates are thus obtained for the contribution of the Scheme to rural landscapes and are subsequently contrasted with the average cost of the Scheme across the Irish adult population. Results indicate that the Scheme contributes substantial benefits to rural landscapes.

Agri-environment, Discrete choice experiments, Individual-specific WTP, Mixed logit

Abstract:
When modelling data generated from a discrete choice contingent valuation question, the treatment of zero bids affects the welfare estimates. Zero bids may come from respondents who are not interested in the provision of the public good; alternatively, some zero-bidders may be protesting about the valuation exercise, but hold positive values for the good. In this paper we investigate the effect of different levels of information on zero-bidders on welfare estimates for the population. We find that different strategies of identification may have non-trivial effects. We recommend use of full debriefing questions for zero-bidders, and use of sample selection models to correct for bias caused by protest behaviour.

contingent valuation, zero bids, protest votes, selectivity bias, sample selection model, survey design

Abstract:
Data from a large scale contingent valuation study are used to investigate the effects of forest attributes on willingness to pay for forest recreation in Ireland. In particular, the presence of a nature reserve in the forest is found to significantly increase the visitors? willingness to pay. A random utility model is used to estimate the welfare change associated with the creation of nature reserves in all the Irish forests currently without one. The yearly impact on visitors? economic welfare of new nature reserves approaches half a million pounds per annum, exclusive of non recreational values.

Abstract:
In this study we compare revealed and stated-preference approaches to value live-stock traits of cattle in Kenya. The premise is that much can be learnt about non-market values of indigenous animal genetic resources (AnGRs) from the use of multi-attribute stated-preference methods, if these compare well with revealed-preference results. The objective is to investigate the performance of choice experiments (CEs) in Maasai cattle trading, by conducting an external test of preference consistency. This involves comparing value estimates for cattle attributes derived from CEs data with those obtained using a hedonic analysis of actual transactions by the same population of traders, in the same markets and over the same period. If CEs perform well, they can be used to investigate values of those genetically-determined livestock traits currently not prominent in pastoralists' populations, but desirable candidates for breeding or conservation programmes (e.g. disease resistance). It is argued that these methods are important in developing countries where livestock are kept for economic reasons and for cultural and risk management functions which are critical to livelihood strategies, but not valued by markets. The results indicate that CEs estimates pass the external test and appear to be adequately precise in estimating values for cattle traits that are relevant in market transactions for Maasai traders. They may be, therefore, a promising tool for valuing phenotypic traits expressed by indigenous AnGRs.

Biodiversity values, genetic resources, stated preference, choice experiments, livestock values, non-market values, shorthorn East African zebu

Abstract:
Practitioners of outdoor sports, such as rock-climbers, are likely to exhibit preference heterogeneity that depends on the 'keenness' with which such sports are practiced. Such an intuition is born out in at least one study using latent class discrete choice modelling (Provencher et al. 2002). Preference heterogeneity has a reflection on the population's structure of recreational values assigned to rock-climbing destinations, to their attributes and ultimately to land management policies addressing such attributes.

In this study such hypothesis is tested on a panel of destination choices by a sample of rock-climbers members of the Veneto Chapter of the Italian Alpine Club. Preliminary estimates of latent-class (finite-mixing) specifications provided evidence that intensity of participation explained heterogeneity in taste. This motivated our splitting of the sample in a 'high' and a 'low' intensity of participation sub-samples, each of which is in turn analysed for the presence of endogenous preference classes using latent-class random utility based approaches. We find evidence in support of the hypothesis that there are at least four statistically well-defined classes in each sub-sample, thereby revealing a considerable richness in the structure of preference, which would otherwise be unobservable in more conventional approaches. From the model estimates, we first focus on the derivation of posterior individual specific welfare measures for some key destination attributes, and then for a welfare neutral land management policy. One emerging feature is the strong evidence of multi-modal distribution of values, a feature that is more difficult to capture when preference heterogeneity is modelled by other means. The results also show how the proposed policy is progressive in terms of benefit distribution in the sample, and that the distribution of individual welfare changes shows markedly different patterns between high and low demand sub-samples.

Travel cost model, Preference heterogeneity, Non-market valuation, Random utility model, Latent class analysis, Rock-climbing, Destination choice modelling

Abstract:
We report the results of a choice-experiment study to model preferences over a selection of breed traits of 'creole' pigs. The study was conducted amongst households of backyard producers and small farmers rearing this local breed in Yucatan, Mexico.

Hypothetical choice data were collected to estimate the preference of households over alternative pigs profiles whose attributes distinguish creole pigs from the potentially more productive, yet less adapted exotic breeds currently threatening to severely displace this locally adapted animal genetic resource.

The observed choices are employed to estimate a series of random utility models whose results are tested for preference equality between households and small farmers. Stated-preference based estimates are found to be of the same magnitude as revealed-preference producers costs. As a consequence the method is deemed to be appropriate for the valuation of non-market functions in production. Estimates conditional on household characteristics are then presented and discussed.

Biodiversity values, genetic resources, stated preference, choice experiments, livestock values, non-market values, creole pig

Abstract:
Multi-attribute stated preference data, derived through choice experiments, is used to investigate the consequence of a finite number of preference groups in a sample of Yorkshire Water residential customers on the conditional distributions of willingness to pay in the sample. The research focuses on 'public good' values, and retrieves the implicit customer specific welfare measures conditional on a sequence of four observed choices. We assess and contrast the sample evidence for the presence of a finite number of 2, 3, 4 and 5 latent preference groups (classes), and contrast these with the presence of a continuous distribution of parameter estimates using mixed logit models. The main focus is the conditional valuations in the form of marginal values for the consequence of waste water handling and treatment, namely: river water quality, area flooding by sewage, presence of odour and flies, and other water related amenities.

Choice experiments, Mixed logit, Latent classes, Individual-specific

Abstract:
Positive response density estimation from CV interval data affords efficiency gains which must be weighed against the risk of introducing potential bias during questions iteration. This study examines the effect of a eliciting a third response on a set of often-used welfare measures derived in a conventional parametric setting. It then compares these with distribution-free nonparametric estimates. A third bound increases censoring probability, introduces welfare estimates sensitivity to inclusion of a theoretically relevant covariate such as wealth which also affects efficiency gains. This might well introduce complications that outweigh the expected efficiency gain. This empirical finding supports and complements previous results obtained via simulation.

Abstract:
To measure the willingness-to-pay (WTP) accurately, Vermeulen et al. [2008] apply the c-optimality criterion to generate designs for conjoint choice experiments. This criterion is based on minimizing the sum of the variances of the WTP estimators approximated by the delta method. Designs generated based on this criterion lead to more accurate WTP estimates than the ones obtained by standard designs and reduce considerably the occurrence of extreme WTP estimates, although they do not exclude them. In this paper, other optimality criteria are considered to tackle this problem. We distinguish between criteria in preference space on the one hand and criteria in WTP-space on the other hand. In a simulation study and a numerical example, we compare the accuracy of the WTP and the utility coefficient estimates yielded by the designs based on these new criteria.

Abstract:
Non-market effects of agriculture are often estimated using discrete choice models from stated preference surveys. In this context we propose two ways of modelling attribute non-attendance. The first involves constraining coefficients to zero in a latent class framework, whereas the second is based on stochastic attribute selection and grounded in Bayesian estimation. Their implications are explored in the context of a stated preference survey designed to value landscapes in Ireland. Taking account of attribute non-attendance with these data improves fit and tends to involve two attributes one of which is likely to be cost, thereby leading to substantive changes in derived welfare estimates.

attribute non-attendance, discrete choice modelling, stated preference, latent class models, stochastic attribute selection models, C25, Q26, Q51

Abstract:
Multiattribute-revealed preference data are used to investigate heterogeneity in a sample of kayakers for a panel of whitewater sites in Ireland. This article focuses on a comparison of preference heterogeneity using a random parameter logit model with correlated tastes and a latent class model, in terms of the implications for welfare measures of environmental quality and site-access changes. Recreationalists' skill levels are found to affect preferences in both approaches. Statistics for the estimated distribution of welfare changes for the average respondent are computed for changes in site attributes, but contrary to previous work, these are found to be of similar magnitude.

Abstract:
We compare two approaches for estimating the distribution of consumers' willingness to pay (WTP) in discrete choice models. The usual procedure is to estimate the distribution of the utility coefficients and then derive the distribution of WTP, which is the ratio of coefficients. The alternative is to estimate the distribution of WTP directly. We apply both approaches to data on site choice in the Alps. We find that the alternative approach fits the data better, reduces the incidence of exceedingly large estimated WTP values, and provides the analyst with greater control in specifying and testing the distribution of WTP.

Abstract:
We review the basic principles for the evaluation of design efficiency in discrete choice modelling with a focus on efficiency of WTP estimates from the multinomial logit model. The discussion is developed under the realistic assumption that researchers can plausibly define a prior belief on the range of values for the utility coefficients. D-, A-, B-, S- and C-errors are compared as measures of design performance in applied studies and their rationale is discussed. An empirical example based on the generation and comparison of fifteen separate designs from a common set of assumptions illustrates the relevant considerations to the context of non-market valuation, with particular emphasis placed on C-efficiency. Conclusions are drawn for the practice of reporting in non-market valuation and for future work on design research.