Consistency Between Contingent Valuation Estimates: A Comparison ...

Regional Studies, Vol. 28.5, pp. 457474.

Consistency Between Contingent Valuation Estimates: A Comparison of Two Studies of U K National Parks I A N BATEMAN*, K E N WILLIS? and GUY GARRODS “Environmental Appraisal Group, School of Environmental Sciences, University of East Anglia, Novwich N R 4 7TJ, U K t Department of Town and Country Planning, and $Department of Agricultural Economics and Food Marketing, University ofNewcastle upon Tyne, Newcastle upon Tyne N E 1 7 R U , U K (Received April 1993; in revised form August 1993)

BATEMAN I . , WILLISK. and GARROD G. (1994) Consistency between contingent valuation estimates: a comparison of two studies of U K National Parks, Reg. Studies 28, 457-474. Recent years have seen a significant increase in the application of the contingent valuation method to the evaluation of environmental preferences in the UK. Recent theoretical and methodological developments suggest that this increase is likely to be sustained for the foreseeable future. This paper examines the issue of consistency across studies carried out to date in the UK. Attention is initially focused upon two major studies which allow the comparison of a number of findings. Analysis is then extended to a large number of smaller studies. These comparisons suggest that the results obtained to date are both consistent and logically ordered (with reference to the environmental good and the change in provision under consideration) across studies. Contingent valuation

Landscape values

Willingness-to-pay

BATEMAN I . , WILLISK. et GARRODG. (1994) La cohtrence des estimations contingentes: une cornparaison de deux etudes des parcs nationaux situts au Royaume-Uni, Reg. Studies 28, 457-474. Au cours des dernitres anntes on a ttmoigni d’une augmentation sensible de la mise en application de la mtthode des estimations contingentes aux prtftrences envers l’environnement au Royaume-Uni. Des diveloppements thtoriques et mtthodologiques recents laissent supposer que cette augmentation est susceptible d’Ctre maintenue dans un avenir privisible. Cet article examine la question de la coherence des itudes effectuies jusqu’h ce jour au Royaume-Uni. Dans un premier temps l’attention porte sur deux ttudes majeures qui permettent une cornparaison de quelques risultats. I1 s’ensuit un tlargissement de l’analyse pour englober un grand nombre de plus petites ttudes. Ces comparaisons laissent supposer que les risultats obtenus jusqu’h ce jour sont h la fois cohtrents et organisis logiquement (par rapport 1 l’environnement et au changement de provision h l’examen) h travers les itudes. Estimation contingente Empressement h payer Yorkshire Dales

Norfolk Broads

Yorkshire Dales

BATEMAN I., WILLISK . und GARROD G. (1994) Konsistenz abhangiger Wertschatzungen; ein Vergleich zweier Studien von Nationalparkgebieten im Vereinitgten Konigreich, Reg. Studies 28, 457-474. In den letzten Jahren lieB sich ein bedeutender Anstieg in der Anwendung der abhangigen Bewertungsmethode auf die Bewertung umweltlicher Praferenzen im Vereinigten Konigreich feststellen. Jiingste theoretische und methodologische Entwicklung legen nahe, daB dieser Anstieg auf absehbare Zeit anhalten wird. Dieser Aufsatz untersucht die Frage der Konsistenz in Studien, die bisher im Vereinigten Konigreich durchgefiihrt wurden. Die Aufmerksamkeit richtet sich dabei zunachst hauptsachlich auf zwei grossere Studien, und gestattet dadurch den Vergleich mehrerer Befunde. Die Analyse wird sodann auf eine grosse Anzahl kleinerer Studien ausgedehnt. Die Vergleiche legen nahe, daB die bisher gewonnenen Ergebnisse nicht nur konsistent, sondern (hinsichtlich des umweltlichen Wohlbefindens und der in Betracht gezogenen h d e r u n g der Bestirnmungen) die Studien durchweg auch logisch geordnet sind.

Valeurs des paysages Norfolk Broads

Abhingige Wertschatzungen Landschaftswerte Bereitwilligkeit, zu zahlen Norfolk Broads Yorkshire Dales

457

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Ian Bateman, Ken Willis and G u y Garrod INTRODUCTION

Whilst it can be applied in numerous ways to a plethora of situations, the most general use of the contingent valuation method ( C V M ) is in eliciting individuals’ preferences for non-market environmental goods, by asking them to state their willingness-topay (WTP) for a specified provision of the good in question. Originating in the USA, the method has in recent years been applied with increasing frequency throughout Europe (NAVRUD, 1992) and specifically the U K (TURNER et al., 1992). Furthermore, in the light of the cautious approval and formulation of ‘best practice’ guide-lines for the method, given in the recent N O A A ‘blue-ribbon’ panel report ( A R R O Wet al., 1993), it is likely that the frequency of such applications will increase with time. This paper analyses C V M studies carried out in the U K to date, examining whether reported results exhibit consistency and logical ordering (with respect to the good and change in provision under investigation) across studies. T w o major studies form the bulk of this analysis, the first looking at a potentially considerable landscape change in the Yorkshire Dales (arising from a change in agricultural practice) and the second examining a potential major landscape and habitat change to the Norfolk Broads (arising from increased flood risk). These studies are focal to this paper as together they represent two of the largest such studies carried out in the U K to date, asking a wide variety of common questions upon which a comparative analysis can be based.

THE YORKSHIRE DALES A N D NORFOLK BROADS CVM STUDIES: A N OVERVIEW National Parks in Britain face a variety of threats to their traditional landscapes and environments. One of thc principal concerns in the Yorkshire Dales National Park results from the impact on the landscape of current and future changes in agricultural support for hill farming. A contingent valuation study of people’s preferences for eight different landscapes which might arise in the future in the Yorkshire Dales as a consequence of agricultural policy changes, revealed an extremely widespread and strong preference for a continuation of today’s landscape, followed by a preference for a conserved landscape in which traditional farming patterns and associated attributes such as dry-stone walls and barns, and small broadleaved woods are maintained and conserved. Indeed, visitors’ and residents’ willingness-to-pay (WTP) for these landscapes and features far exceeded current government spending and subsidies in the Yorkshire Dales National Park to maintain and conserve the landscape (WILLISand GARROD, 1991a, 1992).

This -paper compares results for the Yorkshire Dales study with that of a parallel contingent valuation method ( C V M ) study in the Norfolk Broads ( BA TEMAetN al., 1992). The landscape character of the Broads could also alter radically as a consequence of changes in agricultural policy although, unlike the Yorkshire Dales, most of the Broads is designated as an Environmentally Sensitive Area (ESA). ESA payments in the Broads compensate farmers for profits forgone in not transferring land from traditional grazing land to improved pasture and from improved pasture to cultivated land, and for: (1) maintaining traditional livestock farming on permanent grassland; (2) extending the areas covered by traditional grazing marshes and wet meadow; and (3) conserving landscape, wildlife and historic features, especially those contributing to the character of traditional grassland areas. With an uptake rate by farmers of 75% of the eligible area of the Broads ESA scheme, the protection of the landscape in the Broads from the effects of agricultural policy and agricultural subsidies which encourage intensification, has been deemed a success ( M I N I S T R Y OF AGRICULTURE, FOODA N D FISHERIES (MAFF), 1991). The traditional landscape of the Broads is dependent upon the protection afforded by 210 km of tidal embankments. The embankments consist of clay material from the adjacent marshes. The general poor quality of the materials, and the foundations, means that there is continual dctcrioration in the level and condition of the embankment: from settling and through erosion from boat traffic. Thus, the standard of sea defences is decreasing over time, and unless additional money is found, the defences will probably fail in the very near future. Thus, the character of the Broads is maintained through sea and river defences. Defences were traditionally built to a standard providing protection against sea surges and flood events with return periods of 1 in 25 years. Settlement of the defences has gradually reduced the level of protection, so that over large areas it is now less than 1 in 5 years. Moreover, certain areas on the rivers Yare and Waveney, particularly around Haddiscoe Cut, have not been raised to this standard pending the result of a feasibility study for the Yare Barrier, and have been excluded from capital spending since 1977. Consequently, flooding has occurred in this area on several occasions since that date. If sea and river defences are not improved the Broads will look very different in character in the future from that of today, with more areas of mud flats and wider tidal estuaries, and salt water reaching much further inland with consequential changes in fish stocks, bird populations, plants and types of recreation on the Broads. The full extent of the flooding could take up to 50 years to develop fully,

Consistency Between Contingent Valuation Estimates but in some areas flooding over the next year or two years would be extremely likely. The present study evaluates the benefits visitors derive from the current Broads landscape compared to what would occur if sea defences were not maintained. These are compared with benefit valuations derived in the Yorkshire Dales for landscape preservation.

ECONOMIC METHODOLOGY Estimating the monetary value of any change in the landscape, wildlife and cultural character of the Broads, necessitates measuring how the change will affect the utility of individuals. This welfare gain or loss can be derived from changes in either: (1) Marshallian consumer surplus; or (2) Hicksian (income-compensated) measures. Marshallian measures may be estimated via the travel cost method (TCM)-see, for example, WILLISand GARROD, 1991b. However, the T C M can only estimate individuals’ direct use values and it is likely that resources such as the Yorkshire Dales and Norfolk Broads may exhibit both use and non-use (e.g. existence) values (PEARCE and TURNER, 1990). The contingent valuation method (CVM) estimates Hicksian welfare measures of an amalgam of individuals’ use and nonuse values. In any welfare change situation there are two possible Hicksian measures:’ 1. Compensating variation (CV): this is the money income adjustment necessary to keep the individual a t hidher initial level of utility (U,) throughout the change in provision. For a potential welfare gain, C V measures the amount of money which individuals are willing to pay (WTP) to ensure the gain occurs. For a potential welfare loss, CV measures the amount of money which individuals are willing to accept (WTA) in order to tolerate the loss. 2. Equivalent variation (EV): this is the money income adjustment necessary to maintain an individual at hidher fmal (post-change) utility level (Uo).For a proposed welfare gain the EV measure shows how much an individual is WTA to forgo the gain. For a welfare loss the EV measure shows how much an individual is WTP to prevent the loss. CVM employs an expressed preference approach to the direct estimation of these measures by asking individuals to state their WTP/WTA for welfare gains/losses as appropriate. The choice of WTP or WTA scenario for a particular welfare change is crucial in this approach. Theory shows that some difference should be expected in the sum stated according to whether a WTP or WTA scenario is adopted (see

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Fig. 1). In his seminal article, WILLIG, 1976, shows that, for private market priced goods, this difference should be minimal. However, some recent commentators (HANEMANN, 1991) claim a theoretical basis for the very wide discrepancy between CVM measures of WTP and WTA for public, nonmarket, quantity constrained goods. Others (e.g. KAHNEMAN and T V E R S K Y 1979; , SAGOFF,1990) challenge whether economic theory can provide a sufficient explanation to account for the observed differences in WTP and WTA measures of value for environmental goods. Bypassing the theoretical uncertainties of the WTP/WTA divergence debate, what is important for this paper is to ensure that any comparison of CVM measures is between theoretically identical measures. Comparison across measures runs foul of the divergence debate and is to be avoided here. The Norfolk Broads study asked individuals for their WTP to prevent flooding, i.e. an EV(WTP) to prevent a welfare loss scenario. However, the Yorkshire Dales study asked respondents to consider eight different scenarios, some of which, from their ranking of landscape preferences (see Table l ) , clearly were considered inferior to the present day (i.e. welfare losses) while others were considered by some to be superior to today’s landscape (i.e. welfare gains). As a WTP methodology was employed throughout this study, this means that the results obtained represent a mixture of EV(WTP) sums (to prevent losses) and CV(WTP) sums (to ensure gains). The only measure which is directly comparable to that for the Norfolk Broads is the EV(WTP) to preserve the present-day landscape of the Yorkshire Dales. Fortunately, such an option was clearly the respondents’ most preferred scenario, although it does have the disadvantage (compared to the Norfolk Broads study) of not having a clearly defined reference scenario, i.e. what the landscape would look like without such payment.

CONTINGENT VALUATION METHODS The contingent valuation method (CVM) is now quite widely accepted as a method of valuing nonmarket environmental goods (see MITCHELL and CARSON, 1989; DOE, 1991; BATEMAN and TURNER, 1992); and although potentially subject to biases (see GARROD and WILLIS,1990), most biases can be controlled by careful questionnaire and survey design (ARROW et al., 1993). Different CVMs procedures are not reviewed here. Rather, comments are restricted to issues in C V M which are of direct relevance to their application in the Norfolk Broads and Yorkshire Dales studies and to judging the comparative results of these two studies. The study employed two variants of the CVM in separate samp1es:j (1) an open-ended (OE) continu-

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Consumption of all other goods X

\

\

X

I I QO

(Budget Line)

I

I 1 Q1

XI

Environmental Good

Good

Fig. 1. Compensated welfare change measures for an unpviced quantity constvained good Souvce: BA TEMAand N TURNER, 1993.

ous W T P format (Norfolk Broads and Yorkshire Dales); and (2) an iterative bidding (IB) format (Norfolk Broads only). The OE format involves the use of a simple direct question to ascertain respondent’s maximum W T P to avert a specified (here a detrimental)4 change to the landscape. The O E question format has been used in many studies including: HAMMACK and BROWN’S, 1974, study of waterfowl and wetlands; the study by B E R G S T R OetMal., 1985, of the amenity value of private land; and the study by WALSHet al., 1984, of use and non-use values for wilderness. Several studies comparing different

elicitation procedures have found that the O E format generates higher levels of non-response and lower levels of respondent estimated W T P than other approaches (see DESVOUCES et al., 1983; SELLER et al., 1985). The advantage of IB as an elicitation method is its ability, through repetition, to give respondents more time to consider their preferences. This has led some authors, including CUMMINCS et al., 1986, to prefer the IB technique to the O E question format. Several studies have tried to elucidate whether the IB technique actually does elicit W T P estimates which are

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Consistency Between Contingent Valuation Estimates Table 1. Yorkshire Dales landscape preferences ~

Percentage of respondents Visitors (1)

Residents (1)

Visitors (2)

Residents (2)

Visitors (3)

Residents (3)

~~~

A. Abandoned Semi-intensive Intensive Planned Conserved Sporting Wild Today’s

B. C. D. E. F. G. Q.

2.6 0.3 7.3 28.7 1.0 12.5 47.2

3.1 0.3 6.8 29.5 2.7 6.8 50.2

5.6 0.7 0.3 31.5 384 4.0 8.6 10.6

5.3 0.7 0.7 34.0 17.3 10.0 12.7 19.0

4.1 0.3 0.3 37.8 36.1 4.1

9.2 7.5

5.2 1.0 1.7 31.6 19.1 9.4 8.7 22.6

~~

Notes: (1) = first choice or most preferred landscape; (2) = second choice or preference; (3) = third choice or preference. Source: Willis and GARROD, 1991a

significantly different from those yielded from the O E approach. C U M M I N G et Sal., 1986, reviewed several studies which compared IB technique estimates with initial bids made directly from payment cards and found that the IB technique estimates were up to 40% greater than the initial bids. Based on this, C U M M I NetGal. S concluded that the bidding procedure was important in eliciting maximum WTP. The IB technique may be subject to starting bias: if respondents interpret the starting value in the bidding game as being indicative of market information, or as representing a typical bid, their final bids may be influenced by the starting point and may not represent their true maximum WTP. Starting point bias has been observed in several studies including ROWE et al., 1980; THOMPSON and ROBERTS, 1983; BOYLE et al., 1985; and REGENS, 1991. The Norfolk Broads study attempted to control for starting point bias in the IB technique format by undertaking a pilot O E survey to provide information on WTP values to alleviate flooding in the Broads, although this method does not provide a 24-carat gold standard of experimental control.

TESTING FOR PART-WHOLE BIAS I N THE CVM: METHODOLOGY CVM may be subject to many potential biases, of which one is embedding or part-whole bias (HOEVANAGEL, 1991; K A H N E M Aand N KNETSCH, 1992). This bias relates to the inability of some individuals to isolate a specific case from overall considerations in the decision-making process, e.g. when respondents are asked to value a specific environmental good they may in fact make that valuation on the basis of a much larger number of goods in that environmental group. Embedding may mean that respondents allocate all of their available resources for one group of commodities to one particular item, in which case respondents may be

observed to be willing to pay as much for a single good as for the whole set of goods from which it is taken. Thus, if a mental account for environmental goods existed, and was used rationally, individuals would allocate any expenditure related to improving some aspect of the environment in relation to their maximum WTP for all environmental goods. That is, they would value any one part of a large set of environmental goods in logical relation to the whole set (however, that is not to say that the sum of values of the parts should be equal to the value of the whole-this result would neglect the existence of the substitution and income effects which consumer theory would lead us to expect). In this way, people would make individual expenditure decisions in a more or less rational manner, taking into account both their overall budget for environmental goods and the relative importance to them of a particular issue. However, as KNEESE,1984, suggests, many people when asked about a specific environmental issue will tend to allocate all or the greatest part of their environmental account to it, neglecting other potential environmental improvements which, if they knew about, they would also value highly. Clearly, this is what was observed by KAHNEMAN and KNETSCH, 1992, when comparing WTP for all of Ontario’s lakes with WTP for just a small proportion of them. Evidence suggests that people responding to questionnaires often fail to take into account the additional information they possess which is necessary for rational decision making ( S ~ o v r c ,1972). Thus, in order to make results more rational, it may be necessary to explicitly introduce mental accounts into CVMs by asking some initial questions about the respondent’s total yearly budget for all environmental issues, including those donations and subscriptions that he or she might already have made. This would take account of TVERSKY and

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KAHNEMAN’S, 1981, point that decision making is highly context sensitive, and once the mental account is made explicit, it should prove easier for the respondent to give a rational valuation of the subject under investigation. This procedure was pioneered in the Yorkshire Dales study (WILLIS and GARROD, 1991a) and subsequently adopted for use in the Norfolk Broads study (BATEMAN et al., 1992).

THE STUDY SURVEYS Since details of the Yorkshire Dales CVM study are reported elswhere (WILLISand GARROD,1991a, 1992) only a brief rtsumC of the sample survey is given below, although more detail is presented regarding the Norfolk Broads study as they are not generally available elsewhere (BATEMAN et al., 1992, being unpublished). The organization of the fieldwork, training and experience of interviewers, quality control, etc., basically followed the British Market Research Society’s code of practice in both surveys.

The Yorkshire Dales study This study sampled both residents and visitors. The sample of residents was based upon a face-to-face survey of 300 households taken from the electoral register of the 12 largest parishes in the Craven district of North Yorkshire and was undertaken during 1990. In addition to this, a total of 300 visitors were sampled on a first-served basis at three car parks in the Dales. All respondents were given details, including artists’ impressions of eight different potential landscape types for the future state of the Dales (including the maintenance of today’s landscape). They were then asked to state their preferred landscape and asked for their maximurn household WTP per annum to ensure the provision of their preferred landscape.

The NoYfOlk Broads study A random sample survey of visitors to the Broads was necessary to ascertain how much respondents were willing to pay in a C V M study to preserve the present environment of Broadland. In the survey, respondents were provided with information about both the present state of Broadland and the changes which were envisaged to take place without any additional flood defence investment in the region. The information was conveyed in two forms: an information board; and a short piece of text read out by interviewers to introduce respondents to the information board and familiarize them with its contents (the constant information statement). The information board described present-day Broadland (the four main habitats of the upper and

middle reaches: the broads, reedbeds, carr woodland and grazing marshes; and the predominant three habitats of the lower reaches: grazing marshes, reedbeds and estuaries) and how they related to each other. The use of Broadland for recreation and tourism was also described. The text was designed to be accurate and concise, allowing easy assimilation. Discussion of future Broadland was indicated clearly by a large Future Bvoadland! title on the information board. Information supplied for this was based upon a ‘do nothing’ scenario, with text describing future impacts which the ‘do nothing’ approach would create in terms of landscape/ecology and recreation/tourism, and also on the basis of upper/middle and lower river reaches. The whole text was supported by colour photographs: seven depicting present-day habitats and seven illustrating changes predicted to take place in a without flood defence expenditure format. Photographs depicting future states, for example, illustrated amongst other things, the change in the lower river reaches to an estuarine environment and increased boat congestion in the upper/middle reaches, both considered likely to occur with increased flooding. Another photograph showed what the transition of alder carr to reedbed might look like. The without flood defence photographs were all taken in present-day Broadland in locations where future habitats already existed as a result of recent changes. As far as possible the with-without photographs were taken from a similar perspective to give the impression that they could be the same location. In addition, all the photographs were taken in similar weather conditions so as to avoid any bias resulting from ‘sunny’ or ‘dull’ impressions of the present or the future. The survey sites, 17 in total, were located throughout the Broadland. Most of the sites were located in the northern part of the Broads system, particularly the River Bure since this area attracts most visitors. However, the survey set out to sample a representative cross-section of Broadland users; and survey sites were chosen from a list suggested by the Broads Authority designed to capture the full breadth of Broads users. The sites comprised: busy towns and villages; quiet villages and rural sites; and nature conservation sites. Because of the size of the information board, the interviewers had to remain static and rely upon interviewees passing them. Site locations tended to be: at the edge of a river to catch boaters; car parks at nature conservation sites; and at information and tourist centres. In early August 1991 a large pilot survey was undertaken comprising some 433 interviews. This pilot tested out three payment vehicles: (1) WTP via a non-specific charitable donation (DONATE); (2) WTP via a special Broadland preservation trust fund (FUND); and (3) WTP via central taxes (TAX).

Consistency Between Contingent Valuation Estimates WTP results from the pilot analysis showed that use of the F U N D vehicle led to significantly greater variance in WTP responses. Both the D O N A T E and F U N D vehicles may exacerbate free-riding tendencies (individuals who state they value the preservation of an area but state a WTP of zero), with the D O N A T E vehicle attracting 46.5% zero bids compared to 23.1% for the F U N D vehicle and just 11.8% for the T A X vehicle. However, it may also be argued that the tax vehicle could exacerbate ‘strategic bias’ since, depending upon tax and income, some respondents would not have to pay any charges raised in this way. Following the pilot survey the main survey covered every day over a one-month period from mid-August to mid-September, spanning highseason and early off-season visitors; and comprising 189 interview days, with a maximum of 11 and a minimum of three sites surveyed in any one day. Survey days were distributed to reflect user intensity, and covered both weekend and weekdays. In total, some 3,206 usable interviews were completed, representing, to our knowledge, the largest study conducted in Europe to date. All pilot questionnaires which had used a different payment vehicle from that used in the main survey were then excluded leaving a sample of 854 who were presented with an O E format WTP question and 2,160 who were presented with an IB questionnaire.

WILLINGNESS-TO-PAY (WTP) RESULTS

T h e Yovkshire Dales study Full results are documented in WILLIS and GARROD, 1991a, 1992. However, for the purposes of this comparative study, interest centres on the EV(WTP) measure, i.e. WTP to preserve today’s landscape. Both residents and visitors had a clear first preference for such an option above all other landscape alternatives (see Table 1). Visitors stated a mean WTP of 222.12 per household per year (standard deviation = 232.21) to preserve today’s landscape while residents stated a mean of526.03 (standard deviation = 557.06). Interestingly, this was the only landscape option for which the resident WTP exceeded that of visitors. As there are good socio-economic reasons why visitors’ WTP might be expected to exceed that of residents, the reversal of this trend underlies the strength of support for the preservation, as opposed to change, option.

T h e N o Y f l k Broads study Table 2 records the willingness-to-pay (WTP) for both the open-ended (OE) and iterative bidding (IB) formats from two separate samples. WTP averaged

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276.74 per household per year in the O E questionnaire sample, with a large standard deviation, and a median and mode of 250. A 95% confidence interval was estimated for WTP with a lower bound of 265.73 and an upper bound of S87.74.

Table 2. OE and I B W T P to preventflooding and to preserve the Broads’ landscape (l1991 prices)

Mean WTP: average Standard deviation Median

Number of observations

IB

QE questionnaire WTP

questionnaire WTP

76.74 154.40 50.00

83.67 134.86 50.00

756

1,835

The IB format produced a maximum WTP value of $83.67 to preserve the present landscape of the Broads and to prevent flooding. The standard deviation was again quite large in relation to the mean; but median and model values of the distribution were again 250, respectively-identical to those of the O E questionnaire sample. A 95% confidence interval was again constructed for the mean IB figure, giving a lower bound of 277.50 and an upper bound of 289.84. A t-test was used to determine whether there was any statistically significant difference between the mean WTP as elicited by the O E and IB approaches. The test revealed no significant difference between the two figures at any reasonable significance level, leading to the conclusion that both the continuous O E and the IB formats produced the same results. Trimming a sample by removing a fixed proportion of both the highest and lowest WTP bids is a common practice where some level of strategic behaviour or free riding is thought to have occurred. This practice removes extreme bids at either end of the scale, which might otherwise have biased mean WTP. Although there was no evidence of either free riding or strategic bias in the sample, removing the top and bottom 5% of WTP bids gave a trimmed mean of S55.90. This figure is closer to the median and mode than the untrimmed mean, as might be expected with this technique. However, as both the lowest and highest range of bids were thought to be mostly legitimate in this study, the original untrimmed mean WTP should be regarded as closer to the ‘true’ mean. A number of tests were made to ascertain if the WTP results were subject to bias. Table 3 shows that 85% of respondents were willing to incur extra taxes to preserve the present character of the Broads. Only 14% were not willing to incur additional taxes, whilst approximately 1o/‘ were undecided. Note that the percentage of respondents in each category was

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Table 3. Willingness to incur increased taxes and spending to prevent flooding Percentage responses ~

Willing to incur an increase Not willing to incur any increase Don’t know

OE questionnaire

IB questionnaire

85.4

85.2

13.7

14.0

0.9

0.8

N = 854

N = 2,160

Notes: O E = open-ended formats; 1B = iterative bidding format.

practically identical in both the continuous OE format and the IB variant. Respondents unwilling to incur additional taxes to prevent the Broads from flooding were asked the reason for their decision. The greatest percentage of zero bidders (approximately 30%) suggested it was someone else’s responsibility (Table 4). This may suggest some degree of free riding; but the number of respondents involved in absolute terms is small in relation to the total sample size. Hence, free riding did not appear to be a significant feature in the CVM survey. Some respondents recorded a zero bid because they thought their taxes were already too high (approximately 24% of those refusing to pay), whilst others reported inability to pay, because their income was too low. A small number of respondents preferred a flooded state in the Broads. Thus, most respondents had genuine reasons for recording a zero bid, rather than merely free riding. Overall, the number of respondents who indicated a zero W T P was quite low: 10.4% for the O E question format and 11.2% for the IB sample.

Table 4. Reasons for zero donations preserve the Broads -

or

zero W T P to

~

Percentage responses

Reason Income too low Zero valuation Prefers flooded state Refuses to value Someone else’s responsibility Taxes too high already Other Number of observations o/‘

of sample

OE questionnaire

IB questionnaire

11.2 10.2 7.9 1.1 29.2

4.5 23.1 5.8

24.7

23.1

5.6

6.6

4.5 32.2

89

242

10.4

11.2

VALIDITY OF THE OE W T P RESULTS T h e Yorkshive Dales study Validation of these results is extensively discussed in WILLISand GARROD,1991a, 1992, and attention here is confined to reproducing the estimated bid curve for visitors (Table 5). This bid curve function is generally consistent with theoretical expectations, with correct signs on variables for income, number of children, rating of scenery, etc. The variable for walking is positive, consistent with the high quality/ quantity of walking opportunities offered in the Dales. This is also true of the cycling variable. The negative sign on perception of the area as a national park is unusual; however, WILLISand GARROD, 1991a, reflect that this may represent protests by those who feel such goods should be provided free of charge. They also observed that the sign on visitor days could arguably be positive or negative reflecting either increased or declining marginal value.

T h e Novfolk Broads study There is no ‘gold standard’ against which to assess the ‘truth’ of the value of the landscape of the Broads as estimated by the O E C V M format. The accuracy, robustness or ‘truth’ of a C V M estimate can only be judged in terms of the validity of one or more of the following:

1. Content validity: a subjective judgement about the soundness of procedures and assumptions underlying the CVM study and survey 2. Criterion validity: a comparison of C V M estimates with real payments for the environmental good 3. Comparative validity: a comparison of C V M estimates with those from other benefit estimation techniques 4. Theoretical validity: a comparison of observed results with these expected in theory. Content validity can be judged from the questionnaire survey format and from the results. The questionnaire was designed by drawing upon knowledge of the approaches adopted by a large number of C V M studies, and from the personal exprience of the authors in conducting previous CVM studies of the value of wildlife conservation, green belts, open access non-priced recreation associated with forests, botanic gardens, canals and inland waterways, as well as the Yorkshire Dales C V M study. The questionnaire was extensively tested in pre-trial samples of visitors to the Broads, and questions fine-tuned in the light of respondents’ answers, reactions and feedback. The soundness of the procedures can be judged by the very high response rate to all the questions: even questions on personal household details, such as income, had very few non-responses, i.e. missing answers (less than 6% non-response for the

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465

Table 5. Visitors W T P bid curve to preserve the present Yorkshire Dales landscape Independent variables

Coefficient

F

Prov > F

LNINC

0.56229 (0.11787) 0,35883 (0.14438) 0.26623 (0.13365) 0.66720 (0.27389) 0.29098 (0.19163) -0.61760 (0.30331) -0.01237 (0.00507) -3.84284 (0.11781)

22.78

04JOO1

6.16

0,0137

3.97

0.0474

5.93

04155

2.31

0.1300

4-15

0.0427

5.94

04155

LNKIDS SCENERY WALKING CYCLING N A T I O N A L PARK VISITOR DAYS INTERCEPT

DependeMt variable: Willingness-to-pay for today’s landscape per year whether today’s landscape is first choice or not, RZ=0,1816 DF (total) = 238 F = 8.75 (Standard error in parentheses) L N I N C = natural log of household income LNKIDS = natural log of number of children in household SCENERY = category variable: households who rate the scenery highly W A L K I N G = category variable: households who participate in walking C Y C L I N G = category variable: households who participate in cycling N A T I O N A L P A R K = category variable: households aware of national park status V I S I T O R D A Y S =number of days spent in Yorkshire Dales per annum Source:

WILLISand GARROD. 1991a.

income question and less than 2% for most of the others). Content validity can also be demonstrated by comparing the answers from different sections of the questionnaire. W T P (from the OE C V M format) was consistent and logical in the light of people’s preferences and activities undertaken whilst in the Broads: W T P by those using their own boat exceeded W T P by those hiring boats; W T P for bank fishing, which is often competition fishing, exceeded that for boat fishing; WTP by those engaging in long-distance walking was lower than that for households engaging in other activities (the Broads is not notable walking country); whilst the W T P by those engaging in specific activities was generally greater than W T P for those just relaxing. Since there are no real markets or payments to prevent flooding in an area by both visitors and residents, no judgement can be made on criterion validity. Data on insurance premiums for houses and other property should, in theory, be an indicator of residents’ W T P . But apart from problems of access to this commercial data, there is the problem of disaggregating the flood element from other risk elements covered by the insurance premium,’ as well as identi-

fying the amount paid to satisfy preference from that due to pure risk aversion. Moreover, insurance premiums measure W T P to offset the consequences of small changes in the probability of an event occurring. Thus, as a measure, insurance premiums would almost certainly undervalue the consequences of flooding in the Broads, given the ever increasing probability with time, the irreversible loss in some areas and the complete change in the character of the Broads. Similarly, comparative validity of the O E C V M estimates cannot be judged from benefits estimated from other techniques such as travel-cost models (TCMs) and hedonic price techniques (HPMs). T C M s and H P M s are revealed preference techniques which derive Marshallian consumer surplus benefit estimates from people’s observed behaviour in relation to some environmental amenity. Since flooding has not yet occurred to the extent which would be reached over the next 50 years, current visitor and resident behaviour and hence valuation will not reflect that which will occur when the Broads are irreversibly flooded. Moreover, after flooding, the Broads may attract a different type of recreational visitor to those who currently visit the

I a n Bateman, K e n Willis and G u y Gavvod

466

Broads. T C M has no means of identifying these visitors, except by a comparative study of another area similar to that which the Broads would attain 50 years from now. But which area? Both T C M and HPM estimate the gross benefits from current consumption of an environmental good: the Broads without flooding. However, the utility loss from flooding is the net difference or benefit without compared to that with flooding. This also requires a second comparative landscape to be identified. T C M and HPM have difficulty in identifying the withwithout position with respect to environmental goods and landscapes which have not yet arisen, and therefore are generally not suitable techniques to value future landscapes (see also WILLIS and GARROD, 1992). Thus, comparative validity is not a good check on CVM results for the environmental good in this study. Theoretical validity involves assessing the extent to which the findings are consistent with theoretical expectations; interest focuses on the determinants of the WTP amounts of individuals. Theoretical validity was assessed by regression of the OE WTP amount of independent variables believed to be theorctical determinants of individuals’ WTP to preserve the Broads’ landscape. A pviovi, WTP to preserve the Broads from flooding might be expected to be a positive function of income, membership of environmental organizations as a proxy for environmental preferences, frequency of visits to the Broads and participation in those activities typically associated with the Broads. Various functional forms were fitted to the data to predict WTP: linear; semi-log (dependent); semi-log (independent); double-log; and certain variations including quadratic transformations of variables. The preferred model based on the double-log form is reported in Table 6. Even for this model the R2 value

is low. This is not unusual and is typical of models seeking to explain individual household behaviour. The R2 is slightly lower than those obtained for the Yorkshire Dales study (WILLIS and GARROD, 1991a, 1992), but higher than that derived by COBBING and SLEE,1991, in their study of visitors to the Mar Lodge area of the Cairngorms. The signs and size of coefficients on the variables in the model are evidence of consistency between WTP responses of respondents and theoretical expectations. Income is a positive, highly significant and large determinant of WTP, as expected, but in a non-linear (log-linear) way. WTP decreases if the current visit is the households’ first visit to the Broads. WTP is positively related to frequency of visits; with a much greater influence, as might be expected, for holiday visits than for day visits. Activities undertaken also affect WTP in a highly statistically significant way and also one which has an important impact on the magnitude of WTP. Membership of an environmental or countryside organization increased WTP to prevent flooding in the Broads by an average of 21.24 per household per year, cetevis pavibus. Generally relaxing and enjoying the landscape (including nature watching) as an activity was also positively related to WTP, increasing it by S1.98. However, where walking was an activity, this resulted in a lower WTP. Other activities such as boating, whilst positively related to WTP, were not a statistically significant determinant of WTP and hence are not reported. Overall, the O E WTP results appear to be valid in theoretical terms.

TESTING FOR PART-WHOLE BIAS: RESULTS Part-whole bias or embedding occurs when some individuals are unable to isolate a specific case from

Table 6. Double-log model of O E W T P bids for Broads’ landscape Variable

Coefficient

t value

INTERCEPT Ln (AGE) Ln ( I N C O M E )

0.5632 -0.3133 0.3299 -0.2391 0.2217 -0.3525 0.6866 0.1812 0.3294

-1.56 3.36 -1.57 1.72 - 1.63 2.42 2.73 2.28

FIRST ElVV WALKER RELAXER Ln ( T R I P S ) Ln ( H O L I D A Y S ) Dependent variable: Ln ( O E W T P ) RZ= 0,071 F value 5.531 Prov > F:0.0001

0.41

Label intercept term natural log of age of respondent natural log of household income first visit (0-1) member of environmental group (0-1) visit Broads to walk (C-1) visit Broads to relax, etc. (0-1) natural log no. of day trips in 12 mths natural log no. of holidays in 12 mths

Consistency B e t w e e n C o n t i n g e n t V a l u a t i o n Estimates overall considerations of that environmental good in the decision-making process. This bias occurs when respondents are asked to value a particular environmental good (e.g. the Broads’ or Dales’ landscapes) in fact report a valuation on the basis of a much wider consideration or value of landscapes to themselves (e.g. the loss of all East Anglian landscape, or the lost of all protected and designated landscape in Britain). The idea that individuals might allocate utility to groups of goods rather than to an individual commodity can, arguably, be traced back to STIGLER, 1945. In the context of the present study it may mean that respondents allocate all their available expenditure for one group of commodities to one particular item, in which case respondents may be observed to be willing to pay as much for a single good as for the whole set of goods from which it is taken. A recent study by K A H N E M Aand N KNETSCH, 1992, of WTP for environmental services found that WTP was approximately constant for public goods that differed greatly in inclusiveness; and that the inevitable consequence of the insensitivity of WTP to inclusiveness was that estimates of WTP for the same particular good differed by a factor of 16 for medians and 8 for means, depending on the scope of the initial question. Thus, a simple OE or IB format may result in respondents purchasing moral satisfaction rather than the purchase of a particular quantity of a specific public good. Part-whole bias or embedding can be eliminated or minimized by a sequential budgeting approach in the questionnaire. Indeed, the phenomenon of partwhole bias can be explained by the hypothesis that people allocate budgetary resources in terms of some form of mental account. Mental accounts can be related to the theory of two-stage budgeting (see DEATON and MUELLBAUER, 1980) in which total expenditure is first allocated to broad categories such as food, clothing, housing and recreation and then each allocation is divided up amongst specific items in each category. Thus, if mental accounting is used, individuals will allocate any expenditure on an environmental good in relation to their maximum WTP for all environmental goods. In this way individuals would make expenditure decisions in a more or less rational manner, taking into account their overall budget for environmental goods and the relative importance to them of a particular issue. Evidence suggests that people responding to questionnaires often fail to take into account the additional information they possess which is necessary for rational decision making (SLOVIC, 1972). Thus, in order to make the WTP bids more rational, mental accounting was explicitly introduced into the Dales and Broads CVM questionnaires by asking some initial questions about the respondent’s yearly

467

budget for donations to, or expenditure on, countryside preservation, trips to and holidays in the British countryside. Thus, individuals were asked to calculate their countryside budget-the amount spent by their household each year on a voluntary basis on access, enjoyment and preservation of the countryside. This provided respondents with some frame of reference before answering the O E and IT WTP questions. Respondents were asked to recall how much their household spent each year on enjoyment and preservation of the countryside, such as the costs of day trips to the countryside (petrol, admission, fees, etc.), donations to countryside causes and membership of countryside organizations (their total countryside budget).

T h e Yorkshire Dales study The countryside budget question was asked of all visitors in the survey (n=302) and to half of the sampled resident households (group A: n = 147) with the other half used as a control group (group B: n = 147) and receiving the same questionnaire without the budgetary question. Respondents were then aked how much they would be willing to pay to preserve today’s landscape. The resulting mean WTP estimates were then compared with mean countryside budgets to give some indication of the presence of part-whole bias. Table 7 summarizes the mean estimates of countryside budget and WTP. When mean WTP is compared with the total countryside budget both for visitors and for group A in the household survey, there is a statistically significant difference between them at the 1% significance level, suggesting that neither part-whole bias nor strategic bias was a serious problem in either the household or the visitor surveys. However, when the mean WTP figures for today’s landscape for the two groups of households are compared statistically, there is no difference between them at the 1% significance levels.

Table 7. Total expenditure on preservation and enjoyment of countryside and W T P to preserve today’s Dales’ landscape (& p.a., 1990 prices)

Total countryside budget W T P to preserve Today’s landscape % of budget

Visitors

Residents: group A

126.18’ (225.16) 24.56’ (42.93) 19.5

59.202 (130.87) 23.55* (5741) 39.8

Notes: 1. Based on 302 respondents.

2. Based on 147 respondents. Standard deviation in parentheses.

Residents: group B -

24.552 (54.44)

468

Ian Bateman, Ken Willis and Guy Garrod

Thus, while there seemed to be little evidence to suggest that part-whole bias was a problem in the sample survey there was also no evidence that the countryside budget question significantly altered W T P responses. This led to the conclusion that while part-whole bias might be a problem when a non-market good is unfamiliar or ill-defined, it could be negligible in cases where respondents have a first-hand and current experience of the good. Following the experience of the Yorkshire Dales study, mental accounting was introduced in all of the samples in the Norfolk Broads study in order to minimize embedding or part-whole bias.

The Novfolk Broads study Following WILLISand GARROD, 1991a, all respondents in the Norfolk Broads study were asked to state their total annual countryside budget prior to stating their WT P . Results from both of these questions are compared in Table 8.

Table 8. Total annual countryside budget and W T P to preserve the Noyfofk Broads (& p.a., 1991 prices) 013 questionnaire

IB questionnaire 516.73 (1,32264)

Median annual budget Observations for above

461.61 (748.50) 250.00 692

Mean WTP % of budget Observations for above

76.74 16.6 756

Mean annual budget

2504)O 1675 83.67 16.2 1835

A number of interesting points arise from Table 8. While certain respondents appear to have had some difficulty answering the budget question, overall response rates appear good. Furthermore, the absolute level of mean annual budget for Broads visitors is significantly higher than that for the Dales. This is not surprising given the relative secluded nature of the Broads, remote from large urban centres and catering for specialist (particularly water-based) recreationalists. Average annual countryside budget for those interviewed in Broadland was estimated to be 2461 per household per year for those in the O E W T P sample; and 2516 per household for those who received the IB W T P question; although the median value was 2250 in either case. A t-test revealed no significant difference between the budgets for the two groups at the 5% significance level. As for the Dales, W T P was very significantly different from annual budget, being approximately 16% of the latter for both O B and IB questionnaires.

These results provide considerable evidence that part-whole bias was not a significant problem here.

COMPARISON OF T H E NORFOLK B R O A D S A N D YORKSHIRE DALES CVM STUDIES: SUMMARY While the Yorksire Dales C V M study elicited a variety of C V ( W T P ) and EV(WTP), the Norfolk Broads study only examined an EV(WTP ) to-avoidloss scenario. Consequently, only E V (WTP) measures are compared. Furthermore, while the Yorkshire Dales study employs an open-ended question format throughout, the Norfolk Broads study uses open-ended (OE), iterative bidding (IB) and dichotomous choice (DC) formats (the latter are not discussed here for comparative reasons). Again, to facilitate comparison this paper concentrates upon the O E format which was common to both studies (although IB results for the Norfolk Broads have been reported). Both studies use significant sample sizes. The Yorkshire Dales study is notable for taking specific subsamples of both visitors and residents. The Norfolk Broads study adopted a first-served basis sampling of residents and visitors in proportions dictated by user intensity. Within this, the study is notable both for its large pilot sample and its extensive main sample size, being the largest used in a European C V M survey to date. The Yorkshire Dales study records mean W T P to preserve today’s landscape of 226.03 for visitors and 222.12 for residents. This compares with an overall mean (OE) W T P of 276.74 to preserve the Norfolk Broads from flooding. There appear to be a number logically contributing to this differential: of factors 1. The Norfolk Broads is a truly unique resource. Its complex and extensive system of small rivers and lakes (the Broads themelves) is recognized to have no equal throughout Europe let alone the U K . As such, with regard to many activities carried out in Broadland, there is n o available substitute location. This cannot be said of the Yorkshire Dales: while the quality of the mainly walking/ landscape resources offered by the Dales is clearly of the highest order, other similar substitutes do exist. 2. Partly as a result of the somewhat specialist nature of the Broadland resource (and its relative inaccessibility) the characteristics of visiting households are somewhat different from those of visitors to the Yorkshire Dales. Notably, household income and in particular recreation annual budgets are significantly higher in the Broads. 3. The nature of the physical change contemplated in the Norfolk Broads study is of a more fundamental and far less reversible nature than that con-

Consistency Between Contingent Valuation Estimates sidered in the Yorkshire Dales where it is feasible that a subsequent change in policy could reverse (at least at a perceptual level) any alteration in the landscape. From the estimated bid functions for the two studies a general level of consensus can be seen. Income variables are both positive and clearly significant in both studies. Similarly, the related S C E N E R Y and E N V variables are both positively signed. The conflict of signs regarding the common W A L K E R variable is interesting and logical given that the Yorkshire Dales (positive relationship) is renowned for the quality of walking whilst the Norfolk Broads (negative relationship) provides only very restricted opportunities for walking and very few long-distance paths; indeed, the sitting-admiring characteristics of the Broads are better shown up in the positively signed R E L A X E R variable. Other variables are all as expected apart from the apparent conflict regarding the visit frequency variable. While BATEMAN et al., 1992, explain its positive sign in the Broads study as showing that frequent visitors are W T P more to preserve the area, WILLISand GARRO D,1991a, explain its negative sign in the Yorkshire Dales study as indicating a downward-sloping demand curve between value and quantity consumed. A comparison of the two studies led to the conclusion that part-whole bias was not a serious problem in either study. It is interesting to note the similarity in the relationships of mean W T P to overall countryside budget for the Broads sample and for visitors to the Dales (16% and 19%, respectively). This could indicate one of two conclusions; either that the experiment was a success in minimizing part-whole bias; or that respondents gave a roughly similar percentage of annual budget as their W T P statement irrespective of the good in question. Three factors cast doubt on the latter explanation:

469

et al., 1986; MITCHELL and CA RSON, 1989; WALSH et al., 1989; and SMITHand K AORU1990), , there is now an increasing European literature (see B A R D E and PEARCE,1991). In all cases it is important to ensure that like is compared with like (e.g. survey of user values), using the same elicitation methods (because of recognized elicitation bias). Indeed, the WA LS Het al., 1989, and SMITHand KAORU,1990, meta-analysis studies were specifically addressed to the problem of information transfer (the possibility of adjusting past studies to estimate benefits for longrun policy analysis) and developing an understanding of the variables that explain the observed differences in benefit estimates. Standardizing for the latter differences should result in a valuation due to the characteristics of the good under investigation and the change in the quantity of provision of that good. Considering the characteristics of the Norfolk Broads we can see that: 1. It is a unique good, for which there are no perfect substitutes, although, of course, imperfect substitutes are available 2. The change in provision is a non-marginal change, which will fundamentally alter the nature of the area.

On the basis of these characteristics, the only completely comparable studies are a number undertaken in the U S A (e.g. the study of the Grand Canyon by TOLLEY and RANDELL, 1983). Given the problems of transferring benefits across international (and thereby socio-economic) boundaries, such comparison is avoided. There are also problems of comparability with the results of other C V M studies carried out in the UK, because of such issues as:

1. Mail surveys compared to personal interview approaches. 2. Differences in populations of reference: values held by users will be different from those held by non-users. 3. The number of benefits issues estimated in the study: studies of coastal defences, for example, typically assess not only user recreation and environmental preservation benefits but also values for the preservation of users’ property, etc. (see TURNER and BROOKE,1988; GREENand TUNSTALL, 1991a). These are different from the recreation and environmental preservation benefits elicited in this study. We now extend our comparison of mean W T P sums 4. The elicitation format: although the D C approach to consider other U K C V M studes. has been widely used in the USA, this study of the Broads is its first application in the U K . Thus, COMPARISON WITH OTHER SIMILAR comparability of the results is restricted to the O E STUDIES and IB formats. 5. Uniqueness of good: no U K C V M study to date, Although the majority of C V M studies have been with the exception perhaps of H ANLEY, 1991, has undertaken in the USA (see reviews by CUMMINGS

1. The variation in the absolute mean W T P across studies of different goods (reviewed in more detail subsequently) 2. The fact that, in the Yorkshire Dales study, those who were not asked to state their annual countryside budget stated very similar mean W T P to those who had been given the budget question (see Table 7). 3. The significantly higher W T P as a percentage of countryside budget stated by residents as opposed to visitors in the Yorkshire Dales: such a relationship is logical.

470

Ian Bateman, Ken Willis and Guy Garrod

evaluated a good of the same scale with the same characteristics of uniqueness and major change in provision. Nevertheless, bearing in mind these caveats, by examining otherwise comparable U K CVM literature, the effect of decreasing substitutability and increasing change in provision upon valuation can be detected. Table 9 lists for the UK as many CVM investigations that could be documented by the authors of studies of values using O E or IB formats on WTP questionnaires. The current Norfolk Broads study clearly has a much larger sample size than any other study. Other studies do not consider a change in the quantity/quality of a good of such magnitude as that considered in this study. All of the studies listed consider goods for which substitutes exist to a greater or lesser extent. Examining the level of valuation across studies in conjunction with the level of substitutability of the good under investigation reveals an interesting trend. Where many substitutes exist in the local area (this was true of the beach preservation studies reported; FLOODHAZARD RESEARCH CENTRE (FHRC), 1989; et al., 1990b) then low WTP valuations are GREEN elicited (mean WTP ranging from 22 to 25 p.a.). As the number of available local substitutes falls (but some substitutes do still exist as in the river improvement, heathland and woodland preservation studies: et al., 1989; GREEN et al., 1990b; GREEN and COKER et al., 1991; BATEMAN TUNSTALL, 1991b; HANLEY et al., forthcoming, then W T P valuations rise significantly (mean WTP ranging from 210 to 219 p.a.). Most interestingly, where there are no local substitutes, and where the landscape would change in a significant way but not disappear entirely as in the Broads, then WTP valuations rise again by a further significant amount (mean WTP ranging from &27to 235 p.a.). The Yorkshire Dales study (WILLISand GARROD, 1991a, 1992) falls into this category having only national rather than local substitutes. By contrast, the Norfolk Broads is a truly unique resource (both nationally and internationally) for which there is no substitute and for which change will be effectively irreversible. This factor, together with the major nature of provision change considered (outweighing that of any of the comparative studies), gives strong backing for the estimated absolute level of valuation derived in this study. Acknowledgements- The authors gratefully acknowledge the encouragement and advice provided by Kerry

Turner, of the University of East Anglia (UEA), in this study. We are also grateful to Sylvia Tunstall of Middlesex University, who provided advice on the design of the questionnaire for the Broads study; and Peter Doktor who ably organized the CVM survey in the Broads. Chris Wood of the Yorkshire Dales National Park, and Tim O’Riordan (UEA) provided advice and support with respect to the Dales study, for which we are also grateful. Our final thanks go to the interviewers for their unstinting efforts; and to respondents for giving their time and without whom the studies would not have been possible. The usual caveats apply: the views expressed in this paper are those of the authors alone and do not represent the views of any organization.

NOTES 1. Questionnaires used in both studies are available from the authors. 2. Strictly speaking, for non-priced discrete quantity goods such as those under discussion, we should refer to Compensating and Equivalent Surplus measures (HICKS, 1943). These are not equivalent to the continuous quantity variation (CVIEV) measures although they are similar for marginal changes. For a recent review, see BATEMAN and TURNER, 1992. et al., 1992) also 3. The Norfolk Broads study (BATEMAN employed a separate dichotomous choice methodology (see GARROD and WILLIS,1992). This latter approach was recommended as best-practice in the recent N O A A e l al., 1993) as it minimizes the strategic report (ARROW bidding opportunities recognized as present in the O E and IB approaches. However, to date the Norfolk Broads study is the only major UK study to adopt a dichotomous choice approach. As the purpose of this paper is to examine consistency across UK studies, its remit is therefore necessarily confined to O E and IB experiments. As such it should be noted throughout that we are investigating the consistency, rather than absolute validity, of findings. 4. Only 1% of the Norfolk Broads sample of respondents actually preferred the flooded to the current state of the landscape. 5. Most insurance companies use post sector codes to structure the probabilities of hazards (theft, etc., for contents, and fire, subsidence and flood risk for buildings) by areas. Over the country as a whole flooding forms one of the smallest risk elements to buildings, although it is significant in some particular localities which insurance companies take into account in setting premiums if they are aware of the hazard. Properties with a large value are insured through Lloyds in which cases an assessment of the risks to each individual property insured is made. 6. Despite this statement all three authors have a personal preference for the landscape of the Yorkshire Dales!

Consistency Between Contingent Valuation Estimates

471

Table 9. Applications of C V M to recreation value in the United Kingdom Sample size

Sample “IPe

Amenity use for inland waterways

637

Visitors

1975

Beach recreation

1,476

1985

SSSI’s and naNre reserves

400

1986

SSSI’s and nature reserves

1,100

1987

Forestry recreation

1.148

Visitors

1987

Forest recreation

1,780

Visitors

1987

River water quality improvements

873 at 12 sites

Visitors

River water quality improvements

303 residents at 9 sites

1987

River water quality . . improvements

319 residents at 7 Houscholds living at Bidding gamc sites least 2 km from a river corridor

1987

Recreational benefits 187 coastal cliffs

Visitors

Open question

None

1988

Value of nature rererves/wildlife 3 sites

145+ 240+

Visitors

Payment card interviews

Entry feel membership fee to RSPB

WTP = Sl.18 to S2.53

1988

Recreational benefits of beaches in 4 conditions Recreational bcnefits of beach

247

Visitors

Enjoyment pcr adult visit

None

Valueladult visit f7.72, f6.57. u.86,s11.46

Open question

Enjoyment per visit

S15 local user. €18

Improvement to river corridor: 2 options

242

Enjoyment per adult visit

Enjoyment pet visit

Valueladult visit €0.82. €1.03

Open question

Rates and water rates

Enjoyment per adult visit

Enjoyment per visit

WTP =f13.90, S16.u) year1 household Valueladult visit €7.76

Bidding game

Rates and

Year

Good

197415

1987

1988 1988

Values

Reference/ researchers

Entry fee

WTP = €0.10 (visit)

STABLER and ASH. 1978

Beach users

Admission fee

Valuelgroup visit = f0.2

SIMMONDS. 1976

IOB + BES members

Trust fund

S4.541head

WILLIS.1990

Option price including use and non-use values

Houscholds up to

Trust fund

S0.82lhead

WILLIS,1990

Entry fee

WTP = f1.25 (visit)

HANLEY. 1989

Option price including use and non-use values Bid curves estimates

Admission charge

€0.33/head

WILLIS 11 af.. 1988

Enjoyment per adult visit

Enjoyment per visit

f0.51. S0.60, €0.52

GREEN and TUNSTALL. 19912

Opcn question

Lump sum for improvements to three standards

f546, S562. Ed32

GREENand

(household)

TUNSTALL. 1990

Includes non-use value?

Water rates

WTP=S13.59 (non-visitors) WTP = S15.56 (visitors) Yearlhcad with €6.00 S.P. WTP=S1.45. S1.81 (non-visitors) WTP=Sl.41, S2.01 (visitors) Monthlhud with 5Op and S1.00 S.P.

et GREEN 19901

Includes non-use value

Households living adjacent to a river corridor

c. 8W

Residents

Visitors

Woodland recreation 200

Visitorslschool

1989

Canal and waterway 1,502 recreation Yorkshire Dales’ 600 landscape 387 in 5 towns Coast protection

Visitors

Recreational benefits 603 at 4 sites of beaches

Visitors

1989

1989

1990

Heathland conservation in Dorset

735 at 6 sitcs

Visitors

1989

1989

Payment card

186

1988

1988

Payment vehicle

Notes

200 km from sites

Recreational enjoyment of visit to beach Recreational hcnefits of cliff tops Forest recreation

1988

CVM format

214

1.843

237

Residents

Open questions

residents Residents

Visitors

taxes

non-local user

W T P = f1.83, €2.83 yearlhead with 50p and fl.OO S.P. f0.531hud

Entry feelshare purchase Car parking or access charge Donation

nla

Bidding game

Rates and taxes

Enjoyment pcr adult visit

None

Bidding gamc

Rates 2nd taxes

?

Entry feelannual permitltrust fund

WTP = f25.16. S21.90 yeadhead with 50p and 2Op S.P. Valuc/adnlt visit s7.55, s7.12, u.74. S9.18 WTP = S4.90, €7.22 yearlhead with 50p and 20p S.P. f0,74/virit f9.731ycar S25.571once off

Vhiton and

of.,

FHRC

Admission charge

Visitors

valucladult visit Headlmonth

S0.36/hcad

Range depending on l a n d l a p s

H A N L E Y1989 ,

PENNING-ROWSELL el al., 1989

T U R N Eand R BROOK.1988 COKEP.et

a/.,

1989

PENNING-ROWSELL 1989

et af..

PENNING-ROWSELL et af., 1992

WILLISand BENSON.1988 BISHOPand STABLER, 1991 WILLISand GARROD.1991 WILLISand GARROD.1991. GREEN and TUNSTALL, 1991c

Includer non-nre value? Includes non-usc value

GREENcf d..1990

HANLEY. 1991

Impact of 4 different information sets tested

Ian Baternan, Ken Willis and Guy Garrod

472

Table 9. continued Sample

Sample

Year

Good

size

type

CVM format

Payment vehicle

1991

Benefit of flood alleviation scheme

793

Households

Open question

Community Charge and fund

1991

Landscape improvement

1.803 over 6 sites Visitors

1992

Coast protection Hurst Spit

550

Values

Reference1 researchers

W T P = €3 69lyear

POSF~RII

Notes

DUVIVIER ENVIRONMENT. 1991

1992

1991

River restoration

Norfolk Broads

714

0E=854

Visitors

Residents and users

Viritonlraidcntr

IB = 2.160

1991

Thetford Forest, Norfolk

7 samples of 50

Bidding game

Taxes

Enjoyment per

Enjoyment per

visit

VLSlt

Enjoyment per adult visit open question

None

Open-ended

Tax

plus iterative bidding Separate user and non-user samples

HANLEY 1992 ,

Protest bids excluded

WTP=E9.2. €40.6 yeadhead with 25p and €32 S.P. f3.72lvirit loss following erosion

FOUQUETel al.. 1991

Includes values

Valueladult visit €0 95 users 50.75 residents

TAPSUL ef el..

OE = s n p IB = E84pa (per household)

BATEMAN 61 al.,

Trust fund

Opcn cnded

Entrance feel

general taxesipoll tax

non-use

1991

lWZb

€1.21 to 27.09 B A T E MAeNl al. depending on user1 (fnrthcoming) non-user and vehicle

Dichotomous choice also employed Tests various bases

Sourre: Adapted from BATEMAN el af., 1991

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