Institut für Volkswirtschaftslehre

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Contingent valuation and money attitudes
(2015) Pelz, Sonna; Ahlheim, Michael
The Contingent Valuation Method (CVM) is one of the most frequently applied techniques to assess and monetise the benefits of environmental improvements. This survey-based method aims to elicit individuals’ willingness to pay (WTP) for enhanced environmental quality by means of hypothetical payment questions. Analysts interpret stated WTP as the monetary equivalent of the utility gain an individual expects to experience due to a specific environmental improvement. In spite of its frequent use, the validity of WTP statements is recurrently questioned and analysts have pointed to several sources of bias, such as a poor CVM survey design or certain characteristics of the respondents. This dissertation focuses on respondent characteristics which hitherto have not been examined, namely individuals’ attitudes towards spending money in general. The disposition of a person to spend money is expected to systematically affect and possibly bias stated WTP. While money attitudes have been extensively studied in psychological research, they have never been considered to be of influence in the context of environmental valuation. Given this lack of research, this dissertation investigates, theoretically and empirically, the role of money attitudes in CVM surveys.
Curtailment of civil liberties and subjective life satisfaction
(2021) Windsteiger, Lisa; Ahlheim, Michael; Konrad, Kai A.
This analysis focuses on the lockdown measures in the context of the Covid-19 crisis in Spring 2020 in Germany. In a randomized survey experiment, respondents were asked to evaluate their current life satisfaction after being provided with varying degrees of information about the lethality of Covid-19. We use reactance as a measure of the intensity of a preference for freedom to explain the variation in the observed subjective life satisfaction loss. Our results suggest that it is not high reactance alone that is associated with large losses of life satisfaction due to the curtailment of liberties. The satisfaction loss occurs in particular in combination with receiving information about the (previously overestimated) lethality of Covid-19.
Labour as a utility measure reconsidered
(2017) Pham, Van Dinh; Ahlheim, Michael; Frör, Oliver; Nguyen, Minh Duc; Rehl, Antonia; Siepmann, Ute
In Stated Preference studies for the appraisal of environmental projects in poor countries or regions it often turns out that the stated willingness to pay of people for environmental improvements, which is used as measure of individual welfare changes, is very low. This is often interpreted as the result of extremely tight budget constraints, which make it impossible that people express their true appreciation of an environmental project in terms of their willingness to pay for it. Therefore, it is sometimes suggested to use labour contributions instead of money as a numeraire to measure utility in such studies. In this paper we show theoretically and empirically that this suggestion is not compatible with the principles of welfare theory because of several inconsistencies. We also illustrate the validity of our arguments empirically based on the results of a Contingent Valuation study conducted in a rural area in northern Vietnam.
Non-trading behaviour in choice experiments
(2016) Neidhardt, Jan; Ahlheim, Michael
This paper addresses a methodological problem of choice experiments, namely the problem that respondents sometimes avoid the intellectual effort of thoroughly considering the trade-offs between different alternatives that are the essence of every choice experiment, and tick instead the next best alternative without the necessary deliberation. This kind of behaviour which is called "nontrading" in the respective literature calls into question the validity of choice experiments. In this paper, which is based on an online choice experiment concerned with consumer’s tastes for table grapes with 1,000 participants, we suggest possibilities to identify potential non-traders not only by their answering behaviour but also by some general characteristics we found to be typical of this kind of respondent.
Nonuse values of climate policy : an empirial study in Xinjiang and Beijing
(2013) Pelz, Sonna; Jing, Luo; Jiang Tong; Frör, Oliver; Ahlheim, Michael
Climate policy measures can be roughly subdivided into mitigation measures and adaptation measures. Mitigation policy aims at a reduction of greenhouse gas emissions with the overall goal of slowing down climate change and global warming. Since greenhouse gases like CO2, Methane etc. are global pollutants which have the same effect on world climate irrespective of where they are emitted mitigation policy creates benefits for people all over the world. Adaptation policy on the other hand does not seek to influence the world climate but, instead, is meant to reduce the negative consequences of climate change for a specific region. The benefits created by adaptation policy are, therefore, only of local importance while mitigation policy yields global benefits. This difference has, of course, consequences for the welfare economic appraisal of mitigation policy measures as compared to adaptation policy measures. Since the wellbeing of many more people worldwide is affected by mitigation measures than by adaptation measures the former will always appear more attractive in a cost-benefit analysis than the latter, at least from a global perspective. In this paper we want to show that adaption policy measures are often undervalued in cost-benefit analyses because only their so-called use values are considered, while the nonuse values they create are neglected. The use value of a commodity accrues from a direct utilization of that commodity. In an environmental context the use value of e.g. a beautiful landscape is felt by those people who visit this landscape. Beyond this use value the landscape might also have a value for people who never visit it but still enjoy the knowledge that in their country such a beautiful landscape exists and that endangered animals and plants are preserved there. This value that originates from the mere existence of a (market or environmental) good is often called its nonuse value because it is independent of a direct (and empirically observable) utilization of this good. If it can be shown that some adaptation policy measures in the context of climate policy create also nonuse values in addition to the use values this might lead to a new assessment of such measures and it might increase their chances of being approved in the political decision process. It is obvious that the systematic undervaluation of adaptation policy measures resulting from the neglect of the nonuse values they create might have the consequence that they are declined because they do not pass the cost-benefit test, though they create high nonuse values which are not considered in this test. Of course, the existence of nonuse values depends on the cultural background of the people affected by these measures and of the society they live in. Especially in an emerging country like China many people might still underestimate the importance of climate adaptation measures in comparison with economic policy measures triggering the economic growth of the country, especially if the adaptation measures are conducted in faraway regions of the country. In this study we test empirically the hypothesis that also in a growth-oriented economy like China non-materialistic values like the nonuse values of climate policy are perceived and respected by the population. This should especially hold for the better educated people living in big cities like Beijing. Therefore, we conduct a survey in Beijing where we ask people to assess a climate change adaptation project to be implemented in a faraway region, in this case in the Tarim basin in Xinjiang. In this survey we find that also Beijing citizens feel responsible for the environmental conditions in Xinjiang, especially under the impression of climate change. We find that they are even willing to contribute personally to financing a public project for the improvement of the living conditions in this remote (as viewed from Beijing) region. The rest of the paper is organized as follows: the next chapter focuses on the importance of nonuse values in environmental cost-benefit analyses; information concerning the impact of climate change on the Tarim area is provided in chapter three; the survey method and sampling procedure are introduced in chapter four; in chapter five results of the survey in Beijing are presented and analyzed, followed by some concluding remarks.
Personality-based approach to environmental valuation
(2015) Sinphurmsukskul, Nopasom; Ahlheim, Michael
One methodological shortcoming of the contingent valuation method (CVM) is that it allows for both accidental and deliberate misreporting of individual preferences. In CVM surveys the preferences of people for an environmental improvement are measured in terms of their willingness to pay (WTP) to get that improvement or the project that yields it. The WTP respondents state in CVM interviews is interpreted as the monetary equivalent of the utility they expect from the environmental improvement in question. Myriads of attempts have been made to identify and eliminate those elements of a CVM survey which might induce respondents to deviate from stating their true willingness to pay in a CVM interview. Little attention has been paid, however, to the psychological characteristics of survey respondents, which may as well play an important role in this context. In particular, insights from modern personality psychological research which has already been applied in the recent decades in the field of behavioral economics have not been given much consideration in the context of environmental valuation. Therefore, this study scrutinizes the influence of personality traits on WTP statements from both a theoretical and an empirical point of view. Of special interest is the usefulness of personality traits for detecting biases in WTP answers. Personality traits are fundamental human dispositions, which influence people’s typical behavior, thoughts and feelings. In personality psychology today, it is commonly accepted that personality traits of human beings can be represented by five global personality domains, namely neuroticism, extraversion, openness to experience, agreeableness, and conscientiousness. Neuroticism represents the tendency of individuals to experience negative emotions, such as fear, sadness, embarrassment, and anger. Extraversion represents sociability, energeticness, and the tendency of individuals to experience positive emotions. Openness to experience represents the interest of individuals in the engagement with new experiences and impressions. Agreeableness incorporates the characteristics of empathy, cooperation, and care in interpersonal situations. Conscientiousness represents the tendency of being thorough, reliable, well-organized, and hard-working and hence describes the degree of self-control and purposefulness. These are the underlying concepts of the Big Five personality model (BFM) which forms the theoretical basis for this study. When it comes to the economic valuation of environmental goods, neuroticism and extraversion are suspected to distort respondents’ WTP statements. In this study the following hypotheses are analyzed: Neurotic respondents are expected to report WTP answers which are overshadowed by different sorts of negative emotions resulting in an understatement of their WTP answers. Respondents who score high on extraversion are expected to overstate their WTP responses in comparison to their true WTP because of their optimism and friendliness. Openness to experience and agreeableness, on the other hand, are not expected to cause biases contained in WTP answers. Yet, systematic relationships between the two personality domains and stated WTP are anticipated because these two domains are likely to be related to individual preferences for environmental projects. Positive association between openness to experience and stated WTP is expected because open individuals, who prefer novelty and are more ready to adopt new activities, may expect higher benefits from the project than respondents who score low on the openness scale. Agreeable respondents, who are fundamentally altruists, are expected to value environmental projects higher than respondents with a low level of agreeableness. As a consequence, a positive relationship between agreeableness and WTP answers is expected. Conscientiousness is not expected to influence stated WTP because the tendencies of being well-organized and hard-working appear to be not relevant to the economic valuation of environmental goods. The derived theoretical predictions of the influence of the five personality domains on stated WTP were verified in a practical CVM survey conducted in northern Thailand to assess the social benefits accruing to a lowland community in a watershed in Chiang Mai province from a project aiming at the improvement of their household water supply. The total of 570 personal interviews were conducted. Since the elicitation question format is generally suspected to influence CVM results, the sample was split to test the influence of personality in two elicitation question formats, namely the dichotomous choice elicitation format (DC) where respondents were asked if they would support the proposed project if they had to pay a surcharge of a specified amount on their water bill (N=345), and the payment card format (PC) where respondents were asked to specify the payment interval from a given list that contains their WTP for the project (N=225). In both splits, respondents were asked to complete the NEO-FFI, a 60-item personality inventory designed to assess the five personality domains. Using factor analysis, five factors corresponding to the five personality domains emerged from the dataset indicating that the BFM can describe the personalities of the respondents in this study. However, it was found that that 20 items of the NEO-FFI worked poorly, hence they were excluded from further analysis. Results from probit and tobit regression models revealed a number of systematic relationships between the personality characteristics of CVM respondents and their responses to the WTP question. Openness to experience and conscientiousness exhibited a significantly positive effect on WTP statements for both question formats, whereas extraversion was significantly negatively related to WTP only in the PC format. Surprisingly, neuroticism and agreeableness did not have any effect on WTP responses. When it comes to the influence of the five domains on responses to other contingent valuation questions (socio-demographic household characteristics, lifestyle, general attitudes etc.), neuroticism showed a negative impact on stating extreme responses and a positive effect on protest beliefs. This means that respondents who score high on the neuroticism scale tended to select the middle response options of the Likert scales used in this context regardless of the content of the question. They are also likely to have a strong protest attitude towards the tap water improvement program in question than respondents who score low on the neuroticism scale. Extraversion showed a negative impact on response time, indicating that respondents who score high on extraversion tend to use less time to answer survey questions than low scorers. Conscientiousness displayed a positive influence on stating extreme responses, response time, and protest beliefs. No impact of openness to experience and agreeableness on contingent valuation survey responses was found. Taken together, these results suggest that the personality characteristics of the respondents as measured by the adjusted 40-item NEO-FFI offer new insights into the psychological processes leading to systematic variations in WTP answers and other forms of contingent valuation survey responses. Such new insights give rise to a number of recommendations for further CVM surveys.
Saving the Vietnamese Mekong River Delta - People's attitudes, opinions and willingness to help
(2023) Ahlheim, Michael; Vuong, Duy Thanh
The unique nature and environment of the Vietnamese Mekong Delta as well as its agricultural production and its traditional lifestyle are endangered by a rising sea level and increasing salinization of the ground and surface water. This paper aims at the assessment of Vietnamese people's information on and attitudes towards these problems as well as their respective convictions and beliefs. Imbedded in an online survey with 2000 completed interviews we also conducted a Contingent Valuation study with which we want to assess people's willingness to contribute personally and financially to saving the Mekong Delta as an indication of the benefits they would expect from such a project. We interviewed three different groups of respondents, one of which lives directly in the Mekong Delta, a second lives outside the Delta, but close to it, that is in Ho Chi Minh City, and the third group lives far away from the Delta in Hanoi. With these three subsamples of respondents we wanted to capture not only the use benefits but also the nonuse benefits accruing from such a project. In the course of the interviews, we found that the Mekong Delta is of great interest and importance to all interviewees, no matter in which part of Vietnam they live. They were mostly well informed on the problems there and had strong opinions on the causes of these problems as well as on suitable strategies to fight them. In our Contingent Valuation study, we assessed the willingness of people at the different study sites to contribute financially to a hypothetical project for the preservation of the Mekong Delta and the socio‐economic, attitudinal and psychological determinants of this willingness. Besides these empirical findings, we also obtained valuable insights regarding various methodological aspects of Contingent Valuation studies.
Social capital from an individual perspective
(2018) Neidhardt, Jan; Ahlheim, Michael
Three contributions to the social capital literature are presented in this thesis: Firstly, a concept of social capital that is compatible with the individual perspective prominent in neoclassical economics is identified. Secondly, a new tool to measure individual social capital is developed and applied. Thirdly, results on the distributional effects of a great number of predictors on individual level social capital are obtained and discussed for a representative sample of the German resident population.
The ecological price of getting rich in a green desert : a contingent valuation study in rural Southwest China
(2012) Frör, Oliver; Börger, Tobias; Ahlheim, Michael
The cultivation of rubber trees in Xishuangbanna Prefecture in China?s Yunnan Province has triggered an unprecedented economic development but it is also associated with severe environmental problems. Rubber plantations are encroaching the indigenous rainforests at a large scale and a high speed in Xishuangbanna. Many rare plant and animal species are endangered by this development, the natural water management is disturbed and even the microclimate in this region has changed over the past years. The present study aims at an assessment of these environmental costs of the economic progress in Xishuangbanna. To this end a Contingent Valuation survey is conducted to elicit local residents? willingness to pay for a reforestation program that converts existing rubber plantations back into forest. It is shown that though local people's awareness of the environmental problems caused by increasing rubber plantation is quite high their willingness to pay in order to change things is rather low. It seems that from the perspective of local residents the economic advantages of rubber cultivation outweigh the resulting environmental threats. Another explanation of the low willingness to pay stated in this survey might be the fact that many respondents consider taxes and fees already too high in China so that they are not willing to make any further contributions to whatever purpose.
The influence of ethnicity and culture on the valuation of environmental improvements : results from a CVM study in Southwest China
(2013) Frör, Oliver; Börger, Tobias; Ahlheim, Michael
The provision of environmental goods by government creates social benefits which might vary between citizen groups with different cultural and ethnic backgrounds. These differences as well as the overall extent of benefits should be analysed before the implementation of public projects in order to consider not only the efficiency aspects of such a project but also its distributional effects. In Southwest China we are facing a rapid deforestation for the development of rubber cultivation and at the same time find an ethnically highly diverse population. This Contingent Valuation study tries to assess the short-term and long-term benefits accruing from a public reforestation programme in Xishuangbanna and their distribution among different ethnic groups living in that region. The results show that different ethnic groups value short-term and future benefits of reforestation differently and that these differences can be explained by the different cultural and historical backgrounds of these ethnic groups.
The return of happiness : resilience in times of pandemic
(2022) Ahlheim, Michael; Kim, In Woo; Vuong, Duy Thanh
Many papers have been written about peoples loss of life satisfaction during the first wave of the COVID-19 pandemic in 2020, but not much has been said about their resilience after the first shock had passed. Were people able to return, at least in part, to their original level of life satisfaction? This amounts to the question to which degree people had shown psychological resilience during the first wave of the COVID-19 crisis. In this context, it is also of interest which internal and external factors supported a persons tendency to prove resilient during the crisis. Based on an online survey conducted in August / September 2020 in Germany we try to answer these questions. We find that after a loss of average life satisfaction during the first three months after the outbreak of the pandemic in Germany many peoples life satisfaction increased again. Roughly 60% of the respondents proved resilient in the sense that eight months after the outbreak of the pandemic they had regained the same or an even higher level of life satisfaction as compared to the situation before the COVID-19 crisis. Our results show that besides socioeconomic characteristics like age and income and certain character traits, peoples personal experience during the crisis and their approval or disapproval of government policy during the crisis had an important influence on their chance to prove resilient. Therefore, a consistent and competent crisis communication building up trust in governments crisis management capacity is essential for peoples resilience in a crisis.
Wasted! Resource recovery and waste management in Cuba
(2018) Trastl, Heike; Ahlheim, Michael; Becker, Maike; Allegue Losada, Yeniley
The collection of solid waste and the recovery of recyclable material from waste belong to the many challenges Cuba has been facing over the past years. In this paper, we give a short account of the actual waste situation and analyze the causes of the obvious deficiencies of the waste sector. We conducted a small survey in Havana city in order to assess peoples awareness of the garbage problem, their appraisal of the actual situation and their willingness to contribute personally to an improvement of the waste situation. Based on the insights gained from this survey and from our theoretical analysis of the Cuban waste management we develop suggestions for an improvement of the waste situation in Cuba. These suggestions take into account that the financial means available for a reform of the waste management system in Cuba are severely restricted. Therefore, our suggestions are more focused on organizational and motivational changes than on the introduction of high technology.
WeChat – using social media for the assessment of tourist preferences for environmental improvements in China
(2018) Yu, Xiaomin; Siepmann, Ute; Neidhardt, Jan; Ahlheim, Michael
Environmental valuation studies with tourists have been very popular already over a long period of time. Tourists are an important stakeholder group with respect to the decision if some environmental project in a tourist region should be realized or not. Typically such studies are organized as face-to-face surveys conducted in the respective vacation areas. Tourists are asked their willingness to pay (e.g. in terms of higher entrance fees for certain amenities on site or a mark-up on accommodation prices etc.) for the implementation of an environmental project or preservation measure in that area. Based on theoretical considerations we argue that in the special case of tourist surveys internet-based surveys are preferable to face-to-face surveys under validity aspects as well as under the aspect of the representativeness of the survey results. Based on an empirical valuation study we conducted in Southwest China we illustrate the practical problems arising in the context of internet surveys in developing or threshold countries.

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