Environmental Engineering Reference
In-Depth Information
outcomes of agricultural policies will be faced with a number of difficulties in
understanding the outcomes with and without policy. For example, there may be
uncertainty in terms of science, where Zechmeister et al.
(2003)
questions the link
between biodiversity outcomes and the amount of subsidy provided. Where studies
are ex-ante, it is difficult to determine in advance how successful they will be.
In addition, even where the evaluation is ex-post, policies do not operate in
laboratory conditions. Instead, there are often multiple policies affecting the
environmental outcomes of agricultural practices, where only the culmination of
these policies is observable. If this was not enough, it is also difficult to predict
the land use practices of land managers in the policy-off situation (see Hodge and
McNally
(1998)
for a more detailed discussion of these challenges).
Such difficulties would be common within all methodologies; however, they pose
particular challenges for environmental valuation. For revealed preference methods
(TCM, HPM), there may be questions as to how relevant the shadow prices estimated
from market transactions are to the policy issues concerned. Such methods are
inflexible to the specifics of the scenarios considered. For example, if a biodiversity
value is required, this is very problematic using hedonic pricing or travel cost methods,
where the benefits accrued from proximity or visits to areas of high biodiversity
will be 'polluted' with a whole range of other values. Although the very flexibility
built within stated preference methods invites application to complex problems
intractable to other techniques, such as specific benefit estimation, this in
turn has highlighted a host of practical and theoretical problems reflected in a
voluminous research literature.
In terms of stated preference methods a key issue relating to scenario complexity
is the cognitive ability of the respondents. Due to the unfamiliarity of the scenarios
valued and the novelty of considering environmental goods and services in terms of
WTP, the cognitive challenge for the respondents is high; emphasising the needs to
keep the scenario presentation simple but sufficiently detailed to be believable. This
is particularly the case when it is realised that no actual money changes hands and
that the expressed WTP is hypothetical. Although it is sometimes possible to design
scenarios where there is an implied link between response to a WTP question and
policy response. Using national payment vehicles and on site recreational survey
locations to consider a single scheme, the valuation of agri-environmental schemes
do not represent an ideal situation for stated preference. The response-policy link
would be likely to be stronger for a broader good and a national survey. Where this
is not the case there is a danger that respondents will confuse the specific scheme
for a broader good and a which would lead to larger WTP amounts being stated.
Given the extent of the challenge, introducing uncertainty of outcomes would
add significantly to the cognitive load. This was illustrated by the debate
between Hodge and McNally
(1998)
and Garrod and Willis
(1999b)
regarding
the feasibility of valuing Environmentally Sensitive Areas. Garrod et al.
(1994)
for example carefully developed a questionnaire with clear policy-on and -off
scenarios as demonstrated using painted representations of landscape outcomes.
These were then valued using contingent valuation. Hodge and McNally
(1998)
criticised this study, suggesting it 'failed to establish a clear and realistic description
of the likely outcome of the policy' (p. 357). It was suggested instead that 'rather than
