Stated preference researchers know that a good's placement among a sequence of goods in a set of valuation questions can have a substantial impact on people's valuations of these different goods. However, the economic consequences of potential order effects stemming from other questions in a survey, prior to the valuation tasks, have received surprisingly little attention. We find that the order used in prior questions may change people's opinions toward various attributes of the good to be valued, and thereby change WTP by a substantial amount.
We explore the relationship between willingness to pay (WTP) for climate change mitigation and distributional preferences, by which we mean individuals' opinions about who should be responsible for climate change prevention and whether the share of climate change impacts borne by the poor is a cause for concern. WTP is higher when larger cost shares are borne by parties deemed to bear a greater responsibility for mitigation, and when respondents believe (and care) that the impacts of climate change may be borne disproportionately by the world's poor.
Risk aversion and time preferences are important sources of heterogeneity in preferences for public policies with near-term costs and uncertain future benefits. Using stated preference data, we first jointly estimate individual-specific risk aversion and discount rate parameters then use these as individual “characteristics” in a separate model to explain preferences for climate change mitigation policies. The more risk-averse the individual, and/or the lower their discount rate, the higher is their willingness to pay.
Debate about the appropriate value for any single social discount rate for public projects stems in part from our lack of knowledge about how individual discount rates vary across people and across choice contexts. We estimate prototype utility-theoretic models concerning private tradeoffs involving money over time that reveal individual-specific discount rates. If researchers estimate aggregate willingness to pay for a public project as a function of heterogeneous individual discount rates, they can then counterfactually simulate of willingness to pay under lower social discount rates argued to be compatible with intergenerational equity.