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Applied Methods of Valuation of Water-related Ecosystem Services
Published in Robert A. Young, John B. Loomis, Determining the Economic Value of Water, 2014
Robert A. Young, John B. Loomis
Although the terminology is not yet fully settled, the group of methods developed to measure environmental values in such cases have mostly come to be called stated preference methods. However, prior literature has referred to these methods as constructed markets or intended behavior or expressed preference. Regardless of the name, a sample of respondents are presented a description of conditions simulating a hypothetical market or referendum in which they are asked to state their WTP for existing or potential increases in the quantity or quality of ecosystem services. The original and still most commonly used method is called the contingent valuation method. Choice modeling analysis (or conjoint analysis or choice experiments) involves presenting the respondent with a set of policy options, each described by a cost and a complete set of attributes or consequences of choosing that option. The respondent is asked either to rank the options or to choose their preferred one. Statistical analysis, usually within the RUM modeling methodology, is then applied to calculate monetary WTP for various attributes of the policy options.
Getting smarter about household energy: the who and what of demand for smart meters
Published in Building Research & Information, 2021
Diego Castro Fettermann, Antonio Borriello, Andrea Pellegrini, Caroline G. Cavalcante, John M. Rose, Paul F. Burke
A widely used approach to explore consumer preferences has been the use of discrete choice experiments (DCEs) and associated discrete choice modelling (DCMs). For example, DCEs and DCMs have been applied to understand consumer demand in the context of transport (e.g., Greene & Hensher, 2003), energy (e.g., McNair et al., 2011), environmental economics (e.g., Willis et al., 2005), marketing (e.g., Burke, 2013), and health (e.g., Fifer et al., 2018). The attraction to these types of models is that it allows researchers to derive the marginal utility that each product characteristic (attribute) contributes to each alternative under consideration. The models also allow researchers to derive an economic measure for each specific attribute, namely the willingness to pay (WTP). We use a MMLM framework, which belongs to the family of discrete choice models. This provides individual household WTP estimates for the different smart meter attributes that we examine.
Quantifying intangible benefits of water sensitive urban systems and practices: an overview of non-market valuation studies
Published in Australasian Journal of Water Resources, 2020
Asha Gunawardena, Sayed Iftekhar, James Fogarty
Stated preference techniques rely on researchers asking individuals, in surveys or interviews, about their preferences over trade-offs for public goods, services, and resources. Stated-preference methods utilise questionnaire-based techniques to elicit values from individuals either directly or indirectly. The two main stated-preference approaches are the contingent valuation method and choice experiments. The contingent valuation (CV) method is the most widely used non-market valuation technique (see Table 1). The method involves presenting survey respondents with a hypothetical scenario regarding a public resource or service of interest and asking them directly how much they are willing to pay to achieve an improvement in resource or service quality or prevent degradation of the resource. Choice experiments (also known as choice modelling) can be used to estimate both the use and non-use values of a resource or service (Johnston et al. 2017). Additionally, the method can be used to estimate the value of differing levels of a feature (Perman et al. 1999).
Making sense of smart features in the smart office: a stated choice experiment of office user preferences
Published in Building Research & Information, 2023
Alex Donkers, Dujuan Yang, Sara Guendouz, Bei Wang
Discrete choice modelling is a widely recognized and frequently used method to understand preference for activities, services and products. It has been widely used in various research fields including marketing, energy, transportation and social sciences (Liu et al., 2020, 2021; Yang et al., 2021). It is based on utility theory and aims to comprehend the fundamental factors that drive an individual’s decision-making process. For a Multinominal Logit model, the utility equation can be defined as Equation (1). Where is the overall utility of alternative i for respondent q, is the structural utility of alternative i for respondent q, is the random utility component, is the utility weight of attribute n and is the score of alternative i on attribute n for respondent q. To estimate the impacts of socio-demographic variables and attitude variables on the utility for unlabelled choice experiments, in this study, we included their covariates as interaction terms with the attributes in the utility function. Thus, the utility function is expressed as Equation (2). The variables considered in this study are gender, work hours, age and attitudes towards technology. These variables were chosen based on previous research which has shown that they influence individual’s preference for smart office features.