A comparison of stated preferences methods for economic valuation of ecosystem services (case study: Qeshm mangrove ecosystems)

Document Type : Original Article


1 Department of Environmental Sciences, Faculty of Natural Resources, University of Tehran, Karaj, Iran

2 Department of interdisciplinary economics, Faculty of economics, University of Tehran, Tehran, Iran


Stated preferences methods are a set of economic valuation of environmental goods and services methods which elicit the individual preferences for goods and services using hypothetical market behavior situations. They include contingent valuation (CVM) and choice experiment (CE) methods which share a common theoretical basis in explaining the behavior of choice. Based on neoclassical economic theory, WTP/ WTA estimates derived by the CVM and CE should be the same. However, several recent studies have shown that they differ. The goal of this article is to compare the ability of the CVM and the CE to elicit WTA for conservation and environmental status improvement of Hara forests.
Materials and methods:
To achieve this goal, the WTA of local communities living in the areas adjacent to these forests was evaluated based on data derived from questionnaire surveys. The CE and CVM questionnaires with dichotomous choice format were carefully designed with WTA measure and local people were asked about their preferences for reduction of access to Hara forests under hypothetical scenarios in which they would receive monetary compensation for lessening or forgoing forest utilization. The collected data were analyzed using conditional logit and binary logit models.
Results and discussion:
The results showed that when people are faced with different formats hypothetical questions, show a different behavior. The results of conditional logit model showed that more than half (57.75%) of local respondents tend to receive compensation for increases in environmental risk associated with conservation programs. They prefer recreational opportunities to other two attributes (Hara cutting and fishing) with a compensation of 233940 IRR day-1. The results of binary logit model for CVM survey data showed that 99 percent of respondents willing to accept a reduction in their forest utilization and participate in the protection programs. The mean WTA estimated 331411 IRR/household/day (9942330 IRR/month). Then the welfare values estimated by the two methods were compared. The findings from this comparison showed that welfare value estimated through the CVM (331411 IRR/household/day) is much smaller and approximately one-sixth those obtained by corresponding CE (1959000 IRR/Day). The results also suggest that the CE method has a greater capacity to explain the choice made by consumers. This is because in the CVM only a single attribute, price, is used to describe the interested good and the choice of individuals is affected only by the bid amounts and socioeconomic variables, while in CE, the multiple attributes are used for describing the good and environmental change alternatives which causes the choices of people affected by interaction with the socioeconomic characteristics of respondents. Meanwhile, the CE method is effective for estimating welfare changes at different levels of environmental change, while the CVM method estimates the value of a change in a single level, which is also a high level of protection.
Due to the divergence of the results, it is impossible to say which method is more credible. It can only be acknowledged that the CE method can help decision makers and policymakers to prioritize different aspects of decision-making by gaining useful information about the final WTA of community members for the various attributes that improve on the project or the proposed design.


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