Environmental Engineering Reference
In-Depth Information
simply seeking one valuation for a single choice, it would seem appropriate to
explore with respondents their reactions to a range of alternatives so as to work
towards some sense of the incremental values related to the extent and characteristics
of conservation goods to be produced' (Hodge and McNally
1998
: 366). Although
not possible using contingent valuation, the use of choice experiments for example,
can provide added flexibility and have since been used extensively by Garrod and
Willis. Using experimental groups the potential for using choice experiments to
compare environmental outcomes has been explored by Powe et al.
(2005)
. Within
these surveys, some participants stated that they could choose between environmental
attributes and a statistically significant difference in preference was observed.
However, participants generally found such choices difficult. In fact, some thought
they had inadequate knowledge to make such decisions.
Further to the complexity of the scenarios considered, there is also complexity
in values held by the general public. For example, results of experimental economics
research have questioned the ability of microeconomic theory to explain behaviour
concerning collective goods such as environmental issues. Ostrom's
(2000)
review
of experimental economics suggests a plurality of values to be held, where some
actors follow self-interest and behave in a manner consistent with economic theory,
whereas others also follow norms of trust and reciprocity. Although within stated
preference surveys it is up to the individuals responding which issues influence
their choices made (Hanemann
1994)
, the following of norms may lead to the use of
inconsistent response strategies, making valuations highly sensitive to the particular
norm followed and making it more likely that respondents will be influenced by the
social situation of an interview. The use of such norms has been commonly
observed within stated preference surveys (Powe
2007)
.
In summary, the inflexibility of revealed preference questions often do not provide
the opportunity to consider the specific policy or goods and services needing to be
valued. Although stated preference approaches are more flexible, dealing with
problems of complexity of scenarios, hypothetical nature of the valuations and
plurality of values, have led to a whole range of difficulties being observed,
questioning the validity and applicability of the valuations. Despite these
challenges, the stated preference studies that have considered agri-environmental
schemes have provided a wealth of understanding in terms of the attitudes and
preferences that the general public holds. Although the valuations themselves
would seem to be positively biased, the understanding their elicitation has provided
should prove very useful in the design of future agri-environmental schemes;
particularly if choice experiments are used.
Aggregation of Costs and Benefits
The use of cost-benefit analysis is based on the criteria of Potential Pareto
Improvement (PPI), where if the magnitude of the gains from moving from a
policy-off to policy-on situation is greater than the magnitude of the losses, then
