Modelling Outcome‐Related Risk in Choice Experiments

20 Pages Posted: 15 Nov 2013

See all articles by Klaus Glenk

Klaus Glenk

SRUC, Land Economy and Environment Group

Sergio Colombo

Andalusian Institute of Agrarian Research

Date Written: October 2013

Abstract

In this study, we introduce information on outcome‐related risk as an additional attribute in a choice model of preferences for a land‐based climate change mitigation project. We provide a comprehensive comparison of different model specifications arising from different behavioural assumptions about the way that respondents process information on outcome‐related risk within the choice task. We find significant differences between several specifications in terms of both model fit and WTP estimates. The behavioural assumptions made when choosing a particular model specification, and reasons that motivate them should be made explicit, and consequences of using different specifications should not be ignored.

Keywords: choice modelling, climate change, outcome‐related risk, soil carbon sequestration, supply uncertainty, willingness to pay

Suggested Citation

Glenk, Klaus and Colombo, Sergio, Modelling Outcome‐Related Risk in Choice Experiments (October 2013). Australian Journal of Agricultural and Resource Economics, Vol. 57, Issue 4, pp. 559-578, 2013. Available at SSRN: https://ssrn.com/abstract=2354638 or http://dx.doi.org/10.1111/1467-8489.12012

Klaus Glenk (Contact Author)

SRUC, Land Economy and Environment Group ( email )

West Mains Road
Edinburgh, EH9 3JG
United Kingdom

Sergio Colombo

Andalusian Institute of Agrarian Research

Seville, 41092
Spain

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