Alternatives for Environmental Evaluation (Routledge Explorations in Environmental Economics)

Alternatives for Environmental Valuation

Environmental cost–benefit analysis was developed by economists in the belief that monetary valuation of the environmental repercussions of economic activity is essential if the ‘environment’ stands any chance of being included in governmental and business decisions. This volume examines the limitations of this monetary approach, and considers the alternatives. Three broad angles from which to view environmental values are presented: applying social psychology concepts which challenge standard approaches; introducing multidimensional and non-monetary techniques; and examining vested interest group and citizen participation in processes of environmental valuation. Combinations of these approaches are also covered. The contributions presented are a valuable resource for both environmental and ecological economists. This authoritative book will also prove useful for those with a general interest in the environment, including policy-makers and nongovernmental organizations. Michael Getzner is Associate Professor of Economics at the University of Klagenfurt, Austria. Professor Clive L. Spash holds the Research Chair in Environmental and Rural Economics at the University of Aberdeen, UK. He is head of the Socio-Economic Research Programme at the Macaulay Institute and President of the European Society for Ecological Economics. Sigrid Stagl is Lecturer and coordinator of the Ecological Economics MA Programme at the School of the Environment, the University of Leeds, UK. She is Vice-President of the European Society for Ecological Economics.

Routledge Explorations in Environmental Economics Edited by Nick Hanley University of Glasgow

1 Greenhouse Economics Values and ethics Clive L. Spash 2 Oil Wealth and the Fate of Tropical Rainforests Sven Wunder 3 The Economics of Climate Change Edited by Anthony D. Owen and Nick Hanley 4 Alternatives for Environmental Valuation Edited by Michael Getzner, Clive L. Spash and Sigrid Stagl

Alternatives for Environmental Valuation

Edited by Michael Getzner, Clive L. Spash and Sigrid Stagl

First published 2005 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN Simultaneously published in the USA and Canada by Routledge 270 Madison Ave, New York, NY 10016 Routledge is an imprint of the Taylor & Francis Group This edition published in the Taylor & Francis e-Library, 2005. “To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.” © 2005 Michael Getzner, Clive L. Spash and Sigrid Stagl for selection and editorial matter; the contributors for individual chapters All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data A catalog record for this book has been requested ISBN 0-203-41287-7 Master e-book ISBN

ISBN 0-203-34079-5 (Adobe eReader Format) ISBN 0–415–31012–1 (Print Edition)

Contents

v

Contents

List of figures List of tables List of contributors Preface Acknowledgements List of abbreviations 1

Exploring alternatives for environmental valuation

vii ix xi xiii xiv xv 1

C L I V E L . S PA S H , S I G R I D S TAG L A N D M I C H A E L G E T Z N E R

PART I

Extending the environmental valuation approach 2

A framework for valuing nature: regional biodiversity

21 23

MICHAEL GETZNER

3

Non-use values and attitudes: wetlands threatened by climate change

51

J Ü RG E N M E Y E R H O F F

4

Modelling environmental behaviour: socio-psychological simulation

69

H A N S - J OAC H I M M O S L ER

PART II

Taking multiple criteria into account 5

Assessing the quality of different MCDA methods A N D R E A D E M O N T I S, P A S QUA L E D E T O RO, B E RT D RO S T E - F R A N K E , I N E S O M A N N AND S I G R I D S TAGL

97 99

vi Contents 6

MCDA and stakeholder participation: valuing forest resources

134

WENDY P ROCTOR

7

Confronting risk with precaution: a multi-criteria mapping of genetically modified crops

159

A N DY S T I R L I N G A N D S U E M AY E R

PART III

Deliberation, participation and value expression 8

Consumer valuation and citizen deliberation: towards a comparison

185

187

JONATHAN ALDRE D

9

Three approaches to valuing nature: forest floodplain restoration

209

W E N DY K E N YO N A N D N I C K H A N L E Y

10

Deliberation and economic valuation: national park management

225

R O S E M A RY F. J A M E S A N D R U S S E L L K . B L A M E Y

11

The challenges of stakeholder participation: agri-environmental policy

244

K AT JA A R Z T

12

Preference transformation through deliberation: protecting world heritage

263

S I M O N N I E M E Y ER

Index

290

List of figures vii

Figures

2.1 3.1 3.2 3.3 4.1 4.2 4.3

The ‘standard’ and ‘extended’ model of valuation A conceptual model of WTP determinants Tree diagram for non-users Tree diagram for users Framework model of behaviour toward the environment Representation of the ‘processing of group influences’ Change in average attitute due to various group-oriented interventions 4.4 Representation of ‘processing of observed behaviour towards the environment’ 4.5 Average population behaviour with differing interventions based on observational learning 4.6 Representation of ‘processing of information on the collective use of a resource’ 4.7 Use of an environmental resource 4.8 Representation of ‘processing of communicative influencing under conditions of knowledge and environmental concern’ 4.9 Information campaign experiments without environmentally relevant communication 4.10 Experiments with multiplicators 6.1 Hierarchy of objectives, criteria and indicators for the Southern Region RFA 6.2 Preferences of criteria 6.3 Preferences of environmental criteria 6.4 Preferences of economic criteria 6.5 Preferences of social criteria 6.6 Overall ranking of options 6.7 Priorities of broad criteria 6.8 Range of individual priorities 6.9 Environmental preference 6.10 Economic preference 7.1 Risk, uncertainty, ambiguity and ignorance defined

25 57 62 62 73 77 79 80 82 84 86 88 90 92 145 146 147 147 148 153 153 154 154 155 163

viii 7.2 7.3 7.4 7.5 7.6 10.1 10.2 10.3 10.4 11.1 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 12.9

List of figures Ambiguity of ordering in risk assessments A model of the relationships between risk, science and precaution The multi-criteria mapping process Final individual rankings for the basic options Diverse options mixes favoured by individual participants CJs applied to non-market valuation Spending on parks excluding salaries Process for decision making under ‘charge 1’ Process for decision making under ‘charge 2’ Participants at the first six meetings of the AEF The Bloomfield Track Juror loadings on factor 1 ‘preservation’ Juror loadings on faction 2 ‘optimism’ Juror loadings on factor 3 ‘pragmatism’ Juror loadings on factor 4 ‘symbolism’ Changes to preference factor loadings before and after deliberation Changes to loadings on ‘preservationist’ and ‘close road’ factors Changes to loadings on ‘pragmatist’ and ‘status quo’ factors Changes to loadings on ‘optimist’ and ‘status quo’ factors

166 168 175 179 181 230 232 234 235 253 267 274 275 277 277 280 281 282 283

List of tables

ix

Tables

2.1 2.2 2.3 2.4 2.5 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 5.1 5.2 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10 6.11 6.12 7.1 7.2 7.3

Consumer vs. citizen and students’ perspectives Epistemological problems of WTP surveys WTP regression model variables Logit model estimated coefficients for WTP1 Log-normal OLS estimated coefficients for WTP2 Distribution of interviews and in-principle WTP Summary statistics of the WTP (in DM) for users and non-users Attitudes towards nature Attitudes towards climate change Attitudes towards nature and WTP Attitudes towards climate change and WTP Relationship between attitudes towards money and mean WTP Potential explanatory variables OLS results of non-user group OLS results of user group List of quality criteria for MCDA methods Summary of method comparison The AHP intensity of importance scale Example pairwise comparison Normalized matrix example Pairwise comparison of environmental criteria Overall ranking example Impact table for forest use options Pairwise comparison of options under environmental criteria Priority of options in terms of environmental criteria Pairwise comparison of options under economic criteria Priority of options in terms of economic criteria Pairwise comparison of options under social criteria Priority of options in terms of social criteria The definitions of the ‘basic options’ appraised by all participants The participants Additional options defined by participants

36 37 38 39 41 55 56 58 58 59 59 60 61 64 64 101 126 141 143 143 143 143 149 150 150 151 151 152 152 173 174 176

x List of tables 7.4 8.1 9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 10.1 10.2 11.1 11.2 12.1 12.2 12.3 12.4

Broad groupings of criteria defined by participants Possible advantages of discussion Descriptive statistics for WTP for the Ettrick project Positive issues identified with the forest floodplain project Jury suggestions measuring environmental project success Original and revised bids with reasons for change WTP descriptive statistics for initial valuation WTP descriptive statistics for final valuation Good aspects of the Ettrick project Project problems, solutions and the importance of bad aspects Charge 1: CJ group preference among three options Charge 2: introducing Option 4 Variables feeding into trust, reciprocity and reputation Proceedings at the agri-environmental forum Statement scores for Q attitudinal factors Rank ordering of preferences for management options Factor scores for preference ranking Correlation between preference and Q factors loading

177 191 214 216 217 218 219 219 219 220 231 231 251 254 272 278 279 279

List of contributors

xi

Contributors

Jonathan Aldred, Department of Land Economy, Cambridge University, UK, email: [email protected] Katja Arzt, Department of Agricultural Economics and Social Science, Chair of Resource Economics, Humboldt University of Berlin, Germany, email: [email protected] Russell K. Blamey, Programme Visitor, Research School of Social Sciences, Australian National University, Canberra, Australia, email: russell.blamey@ anu.edu.au Andrea De Montis, Dipartimento di Ingegneria del Territorio, Sezione di Urbanistica, Università di Cagliari, Cagliari, Italy, email: ademonti@ vaxca1.unica.it Pasquale De Toro, Dipartimento di Conservazione dei Beni Architettonici ed Ambientali, Università di Napoli Federico II, Naples, Italy, email: [email protected] Bert Droste-Franke, Institute of Energy Economics and the Rational Use of Energy, University of Stuttgart, Stuttgart, Germany, email: [email protected] Michael Getzner, Department of Economics, University of Klagenfurt, Klagenfurt, Austria, email: [email protected] Nick Hanley, Department of Economics, Adam Smith Building, The University of Glasgow, Glasgow, UK, email: [email protected] Rosemary F. James, Centre for Resource and Environmental Studies, Australian National University and CRC for Weed Management Systems, Campbell, Australia, email: [email protected] Wendy Kenyon, Socio-Economic Research Programme, Macaulay Institute, Aberdeen, UK, email: [email protected] Sue Mayer, GeneWatch UK, Tideswell, Buxton, Derbyshire, UK, email: [email protected]

xii

List of contributors

Jürgen Meyerhoff, Institute of Management in Environmental Planning, Technical University Berlin, Berlin, Germany, email: [email protected] Hans-Joachim Mosler, Department of Psychology, Division of Social Psychology, University of Zürich, Zürich, Switzerland, email: mosler@ sozpsy.unizh.ch Simon Niemeyer, Social and Political Theory Group, Research School of Social Sciences, Austalian National University, Canberra, Australia, email: [email protected] Ines Omann, Department of Economics, Karl-Franzens University, Graz, Austria, email: [email protected] Wendy Proctor, Centre for Resource and Environmental Studies, Australian National University, Canberra, Australia, email: [email protected] Clive L. Spash, Socio-Economic Research Programme, Macaulay Institute, Aberdeen, UK, and Geography and Environment Department, University of Aberdeen UK, email: [email protected] Sigrid Stagl, School of the Environment, University of Leeds, Leeds, UK, email: [email protected] Andy Stirling, Science Policy Research Unit (SPRU), University of Sussex, Brighton, UK, email: [email protected]

Preface

xiii

Preface

This book arose from on-going debates occurring amongst European ecological economists who have been reflecting upon extensions of the ‘standard’ economic model of environmental valuation. Such extensions try to account for citizens’ attitudes, institutional framing and social context as they affect any given environmental change being valued. Three broad approaches to valuation can then be identified and are pursued here. First, economists have been looking to learn from social psychology. Thus, for example, the concept of reasoned action has been one way in which qualitative and quantitative factors have begun to be linked in some contingent valuation studies. At the same time the process of learning from social psychology challenges standard approaches and requires that new alternatives be developed. A major set of alternatives to environmental cost–benefit analysis, which form the second broad approach, focus upon multiple criteria for understanding and improving decisions. The work reported here explores both the potential, as well as the pitfalls of multidimensional and non-monetary techniques. The final approach deals with innovation in the area of vested interest group and citizen participation in processes of environmental valuation. One focus of research in this area has been in terms of combining economic valuation and participatory deliberative approaches arising from political science. Work is presented comparing citizens’ juries and contingent valuation and reflecting upon potential combinations termed deliberative monetary valuation. Stakeholder or vested interest group participation is more common than trying to represent the general public but, as discussed, can also prove difficult. Overall, this book shows a range of approaches being explored by ecological economists and how they are open to interdisciplinary critiques, often dismissed by narrowly focused disciplines. In particular, European ecological economists have been engaging with traditional economics approaches while also learning from applied philosophy, geography, political theory, social psychology and sociology.

xiv Acknowledgements

Acknowledgements

Michael Getzner would like to pay tribute to Professor Egon Matzner (Vienna), who sadly passed away prematurely in October 2003, and who he will miss as both an outstanding teacher and a colleague. We all acknowledge our debt to the European Society for Ecological Economics which has provided an active forum for discussion on such matters as are covered in this volume. There is now a great deal of networking that takes place across Europe amongst those addressing the socio-economic aspects of ecological problems. This includes both those involved in policy processes and academics. The area of science and society interactions is a general and key concern with specific realisations in new technologies. Friends and colleagues who have stimulated our thoughts in these areas with respect to the topics in this volume include: Anders Biel, Jacquie Burgess, Claudia Carter, Mick Common, Silvio Funtowicz, Colin Green, Alan Holland, Sybille van den Hove, Joan Martinez-Alier, Martin O’Connor, John O’Neill, Ortwin Renn, Peter Söderbaum and Arild Vatn. There are also several people outside Europe with whom we interacted and acknowledge as active in these debates including: Edmundo Claro, John Gowdy, Jack Knetsch, Michael Lockwood, Dick Norgaard, Bryan Norton and Sabine O’Hara. Of course as editors we also thank all the contributors to this volume.

Abbreviations

AEF AHP CBA CJs CVM DMV EU Evamix GM GP MAUT MCA MCDA MCM MOP NAIADE NGO NOAA UK USA WTA WTP

agri-environmental forum analytic hierarchy process cost–benefit analysis citizens’ juries contingent valuation method deliberative monetary valuation European Union evaluation matrix genetically modified goal programming multiple attribute utility theory multiple criteria analysis multiple criteria decision analysis multi-criteria mapping multi-objective programming novel approach to imprecise assessment and decision environments non-governmental organisation National Oceanic and Atmospheric Administration United Kingdom United States of America willingness to accept willingness to pay

xvi List of abbreviations

Exploring alternatives for environmental valuation

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1

Exploring alternatives for environmental valuation Clive L. Spash, Sigrid Stagl and Michael Getzner

Introduction The method of inclusion of environmental resources and ecosystem services in decision processes determines how far they are taken into account with results affecting the quality of our lives and those of future generations. A persistent argument has been that monetary valuation is essential if the ‘environment’ is to have any chance of being included in government and business decisions. Environmental cost–benefit analysis (CBA) was developed by environmental economists in order to achieve this monetisation of environmental entities so that the prices in market economies might be adjusted. A range of methods were developed including travel cost, hedonic pricing, production function analysis, contingent valuation and choice modelling (see Hanley and Spash 1993; Spash and Carter 2002). The overall aim has been to select project options on the basis of their welfare impacts and to support government taxes which reflect the social costs of environmental degradation. This approach has met with some success in that various national and international agencies have been interested in performing monetary valuation exercises as part of their overall assessment of projects. The idea of environmental taxation has also risen on the political agenda if remaining limited in practice.1 However, there has also been criticism of environmental CBA, or more specifically of some of the studies conducted under that guise. Critiques can be broadly grouped into those concerned with the theoretical foundations of economic values, and those looking at the validity of specific numbers being produced and the tools employed. In the former case, Kapp (1950) provides an isolated early example which shows the limits to monetary as opposed to other values in society. More recently, environmental philosophers have produced a whole body of literature showing the narrowness of value theory typically expressed by economists and the failure of economic training to place this theory in the context of wider social values (see O’Neill 1993). Reflecting upon this literature requires realising that most economics concerns consequentialism using a form of preference-based utilitarianism, which is a very specific philosophy of value rather than a generally accepted meta ethic which can be universally applied. In trying to address the environmental problems of the 20th century, economic value theory has shown

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itself lacking in several areas, such as the treatment of time, complexity, strong uncertainty, political systems, rights and social norms. The enhanced Greenhouse Effect raises all these issues and exposes the failures of discounting, partial equilibrium analysis, risk assessment and assuming that efficiency is the key social goal (Spash 2002b). The other area of critical analysis abstracts from the first set of problems and tends to be a debate on validity which has been largely internal to the economics profession (although implications of the value debate are also related via theoretical foundations). Validity concerns result in specific applications being criticised for their failure to respect microeconomic and welfare theoretic constraints. Those working within decision making government institutions, such as environmental protection agencies or the treasury, may see such theoretical restrictions as academic and going beyond what is required for practical policy making (for example, see comments by Burney 2000). However, once valuation becomes divorced from its theoretical roots, numbers can be produced which have little content or meaning, and are defensible only in terms of their political role rather than their theoretical basis. In this respect the popularisation of environmental CBA has been a problem as studies proliferate, numbers are transferred out of context and applications seek to meet policy desires. Excessive aggregation is exemplified by attempts to value regional, national and even the world’s ecosystems, although what is meant by a trade price in these contexts is mystifying, and asking who might be the ‘seller’ and ‘purchaser’ exposes the fallacious use of economic value theory. Furthermore, the range of reasonable numbers stemming from monetisation exercises is often very broad, which facilitates the arbitrary use of valuation results. The contingent valuation method (CVM) has become the most widely conducted CBA tool. The main advantage attracting this attention is the ability of CVM to estimate what are termed option, ‘existence’ and bequest values in addition to direct use values. These are amounts reflecting: the preservation of an option to use a resource in the future, the maintained existence of a resource or entity regardless of personal use, and the desire to pass the resource to one’s descendents. The sum of these indirect or passive use values can be large compared with the direct use values associated with non-market goods to which the other CBA methods are solely restricted. The popularity of the CVM is also based upon the apparent simplicity of asking members of the general public the maximum they are willing to pay (WTP) for an environmental improvement or, less commonly, the least they would be willing to accept (WTA) in compensation for environmental degradation. Considerable research energy has gone into refining CVM and related stated preference approaches. The result has been to increase the complexity and cost of conducting a CVM if it is to attain the highest standards of validity. In the United States of America this is the legally defensible standard which can cost millions of dollars for a nationally representative random sample including a range of pretests, focus groups and internal consistency and validity checks in the survey, as well as several variations on survey design. The litigation surrounding the oil spill from the tanker Exxon Valdez led to a set of such standards being produced by a panel of experts commissioned by the

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National Oceanic and Atmospheric Administration (NOAA). This panel consisted of a number of famous economists, such as Nobel Prize winners Kenneth Arrow and Robert Solow. The panel was also asked to investigate the concept of ‘existence’ value. The panel’s report gave a qualified support for the CVM (NOAA 1993). The panel stated that ‘existence’ values are a theoretically meaningful aspect of value. As regards the ability of the CVM to estimate such values, the panel noted five main problem areas: inconsistency of responses with economic models of rational choice; mental account bias, especially when respondents are inadequately informed as to substitutes; aggregating benefits; providing information; and warm glow effects. However, the panel felt that so long as certain guidelines were followed, CVM results could be judged as both meaningful and useful indicators of natural resource damages. These guidelines are that (i) WTP should be used in preference to WTA; (ii) mail surveys should be avoided; (iii) respondents should be given full information on the resource change (including information on substitutes), and be asked how well they understand this information; (iv) open-ended responses should be rejected in favour of closed-ended referendum formats; (v) a random population sample is required; (vi) respondents should be reminded about the need to reduce expenditure on some item of their budget in order to be able to pay their stated bid; and (vii) careful pre-testing should be carried out. Such rules tend to be excessively prescriptive and ignore the specific context in which a valuation exercise must take place. There are certainly general design features in any contingent valuation study which are desirable. These include clear description of the institutional context, explaining the consequences and expected benefits of payment, being aware of various biases which can be introduced in design, such as use of a contentious bid vehicle, and generally producing a realistic scenario. Without addressing such issues any research which claims to be relevant to the economic debate will be seen as inadequate and may also be misleading. However, employing rules which prevent hypothesis testing and experimental design is more worrisome. The NOAA Panel holds an implicit belief in a single universal standard of best practice which ignores cultural, legal and institutional variation. People trade differently in different countries (e.g. haggling vs. accepting the stated price), property rights vary (WTP vs. WTA), areas of trade which are taboo differ, and truly random sampling is difficult at best and impossible in industrially developing countries. A serious concern here is the extent to which research designs which fail to conform to the rules are branded as poor practice when they may be valid research aiming to question the underlying tenets of the model. Blind use of highly specific guidelines can remove the room for original research, especially in the areas of economic psychology and human behaviour. CBA, along with mainstream microeconomics, has been increasingly criticised for building upon an unsound theoretical base in terms of human behaviour and the CVM has made this even more evident. That is, the microeconomic axioms of choice make assumptions which are at best inconsistent with theories of modern psychology and empirical evidence. In the valuation area, Kahneman and Tversky’s (1979) prospect theory revealed that people value gains and losses asymmetrically and this can explain the observed gap between WTP and WTA measures. Knetsch

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(1994, 1995, 1999; also Knetsch and Sinden 1984) has shown the frequent occurrence of behaviours which are inconsistent with accepted economic norms but commonly dismissed by economic models. The refusal to make trade-offs has been shown to arise in CVM studies both amongst those who protest against the use of monetary valuation of the environment and also those prepared to make a contribution (Spash 2000b, 2002a, 2002c). The results can be linked to rightsbased beliefs which contrast with those of the economic utilitarian (Spash and Simpson 1994; Spash 2000c). In terms of the economic model, the only way in which such behaviour can be characterised is as lexicographic preferences which are deemed, at best, to be held only by a strange minority (Spash 1998, 2000a; Spash et al. 2000). A range of techniques is therefore required to understand human psychology in terms of the attitudes, ethical beliefs and social norms which motivate behavioural responses. Concerns raised about the practice of attaching monetary values to all dimensions of socio-economic and biophysical systems have led to the call for alternative valuation methods (Martinez-Alier et al. 1998). There has been a powerful argument for shifting away from the sole focus on outcome towards the quality of decision processes (Funtowicz and Ravetz 1990; O’Connor et al. 1998). In particular, multiple criteria assessment has become a more widely used method, offering the potential for the integrated assessment of local, national and international policies and as a means for combining different perspectives associated with sustainability goals. Sustainability raises a set of issues based on civil rights of current and future generations as well as respect for ecological systems. Understanding that biophysical as well as human systems are complex, and will never be fully understood, has led to the development of approaches which favour adaptive behaviour and learning processes over optimal solutions. Closely linked to this view is the acknowledgement of uncertainty of future events and their impacts on human and non-human systems. All these factors redefine the role of experts, the meaning of knowledge and how decision processes need to be designed to make more effective policy. In the environmental policy arena, and elsewhere, there has been a push for greater public participation, e.g. in Europe the Aarhus Convention (European Commission 1998), and the inclusion of non-governmental stakeholders in project appraisal. Researchers are meeting this challenge both through interdisciplinary discourse and also by contributing to the formation of novel democratic institutions. There is both innovation in traditional environmental CBA and in terms of new political institutions for addressing valuation issues. In the former case are the range of techniques termed deliberative monetary valuation (Spash 2001), and in the latter such tools as the citizens’ jury. Research into the operational criteria for effective public participation is at an early stage of development. The search for validity in applying CBA methods has lead to a variety of appeals to interest groups and/or members of the public in an attempt to supplement the normal information content of prices placed on the environment. Thus, the travel cost method may be combined with an interview approach in order to sustain assumptions of how individuals behave, value time and relate to the environment.

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Hedonic pricing has sought corroboration from estate agent valuations as representing ‘informed’ preferences. Focus groups have been used in conjunction with the CVM to test survey design on the basis that group deliberation could validate the information content and help identify design biases. This last approach is most clearly where deliberative practices have begun to enter. For example, the largest CVM study in the UK was conducted on environmental impacts associated with aggregates (Department of the Environment, Transport and the Regions 1999). An interesting feature of this work in the current context was the informal use of vested industrial interests (stakeholders) in the first part of the study and the use of public focus groups in the design stage of the second, although the feedback from the public proved problematic by diverging from economic assumptions (e.g. the expressed desire for community compensation unrelated to the individual), and neither process was formally reported. Thus, two broad approaches to combining deliberation and monetary valuation can be identified. The first regards monetary valuation as basically sound but being able to benefit from supplementary, and often informal, processes borrowing elements of deliberation. The second sees the use of deliberative approaches as a new method allowing the (collective or individual) production of a monetary valuation for environmental goods and services. Under the first approach a variety of alternatives exists, and monetary valuation may be either followed or preceded by some element of deliberation. Stakeholder participation, as mentioned above, may be employed to validate outcomes. The implication being that ex post deliberations can be used in some way to adjust valuation results or their presentation. Deliberative processes and environmental valuation may also be sequential, e.g. selecting a sub-sample of participants from a CVM survey for a citizens’ jury on the same environmental issue. Ex ante deliberation has been employed in designing CVM surveys with the use of focus groups to test the wording and respondents’ understanding of survey questions. Deliberation is then regarded as useful in providing insight into the processes by which respondents produce their WTA or WTP bid. This may be extended to allowing a deliberative process to determine the options or institutional context to be valued in the survey. The second approach is what Spash (2001) has termed deliberative monetary valuation (DMV) as advocated by, for example, Brown et al. (1995), Jacobs (1997), Ward (1999) and Kenyon et al. (2001). DMV is the use of formal deliberation concerning an environmental impact in order to express value in monetary terms for policy purposes, and more specifically as an input to CBA. For example, consider a proposal to build a new road through a wilderness area and so destroy the habitat of a number of rare or threatened species. A group of citizens would be selected and meet to discuss information about these environmental damages associated with the development. Known costs and benefits (discounted) would be presented, while those pertaining to environmental damages would be deliberated. The citizens would form a jury aiming to provide a monetary value for environmental damages which might be in terms of an individual WTA to allow the project to proceed. The result would then be incorporated into a net present value calculation to determine the viability of the project.

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The meaning of such values remains contentious, as they are mediated individual values. In order to address the increasingly evident fact that preferences are formed and that there is a lack of arbitrage in valuing environmental goods and services, economists are appealing to methods from political science. However, approaches such as citizens juries and contingent valuation, or more generally deliberative forums and monetary valuation, differ in fundamental ways. This has been pointed out by Niemeyer and Spash (2001) as involving the approach taken to theoretical factors (individual and social ontology, preference basis, rationality theory), practical factors (justification, framing, value representation, institutional setting), and political factors (manipulation, representation, social impact). The variation between approaches to each of these factors means the very concept of DMV is brought into question. In simplified terms, can DMV take the best of both monetary and deliberative methods as advocates hope or does it merely create a messy confusion as to the values being expressed? Clearly, research into valuation needs to span different disciplines such as social psychology, applied philosophy, political theory and economics. While interest in doing so seems to have increased, the quality of the applications can be questionable (Spash 2000b). Part of the problem is for economists to understand the requirements of other disciplines, while practitioners in those other disciplines must similarly have a good practical knowledge of what economists are trying to do. Thus, applying attitudinal measures from social psychology may prove insightful with respect to WTP, but only if researchers also understand welfare economics and CBA tools so that their work can address the economics literature. This is a challenging research agenda but one which, as several contributions in this volume show, is now being taken on at several different levels.

Contributions to the debate in this book The book is organised around three major drivers influencing the field of environmental valuation, namely attempts at: understanding the results from environmental CBA and the foundations of economic behaviour, taking multiple values into account, and exploring the role for inclusive deliberation in valuation processes. The chapters reflect the debates over method development which are on-going in the valuation community. Clearly, all methods have advantages and disadvantages and there is no pretence on the part of the editors that any one approach offers a panacea. What the reader will find is the presentation of a range of attempts to learn from different disciplines in order to achieve practical approaches which can improve our understanding and expression of environmental values. Economic values and the psychology of behaviour Getzner begins the book by exploring epistemological and other theoretical problems in understanding economic values with a specific focus upon the CVM. What might be regarded as specific validity issues are addressed (i.e. hypothetical

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bias, framing of questions), but a different perspective is gained by placing these issues within the context which the social role respondents adopt when answering CVM surveys. The refusal to trade money for environmental change is raised as an important behaviour and related to the literature on lexicographic preferences (see for example Spash and Hanley 1995; Spash 1998; Spash et al. 2000). In addition, some of the literature on the supposed dichotomy of individuals as political citizens and economic consumers is discussed. This then provides the background to a range of variables for inclusion in bid curve analysis. The empirical test presented uses WTP for a nature preservation programme in Austria stated to be able to secure the survival of certain species and ecosystems. A convenience sample of 189 university students form the database. The results on answers consistent with lexicographic preferences are mixed. While 94 per cent of respondents claimed species protection should be undertaken regardless of the cost, only just over 7 per cent rejected WTP questions because they regarded species could not be valued in monetary terms. This implies the need for careful probing of interviewees in order to understand their responses (Spash 2000b). The explanatory power of the model is greatly enhanced by what can be regarded as non-economic variables or at least non-standard ones. These factors are interpreted by Getzner as showing the importance of social and institutional context. A strong influence of variables related to charitable giving is revealed, which supports claims by others that CVM fails to measure a trade price as is assumed by practitioners (see Spash 2000b). A clear implication of this type of work is the need to probe more deeply into the motives behind stated preference behaviour. Meyerhoff follows up on this challenge by focusing upon the importance of attitudes as explanatory motives for WTP to improve environmental quality. A key contention here has been the claim by some social psychologists that the results of CVM are merely poor measures of attitudes. One method of testing this hypothesis is to conduct bid curve analysis and probe which variables best explain WTP or WTA. Meyerhoff focuses on the difference between non-users and users with the expectation that non-users only express indirect or passive use values (sometimes erroneously termed non-use values) and that these are related to non-economic factors. Indeed, Westra is cited as showing the relationship of such values to attitudes. Meyerhoff uses WTP for protection of the nature and landscape of the German Wadden, a coastal wetlands ecosystem, against threats from climate change. A total of 1412 semi-random interviews were conducted face to face. The data analysis proceeds by excluding ‘protest bids’ which are zero bids for reasons regarded as inconsistent with placing a zero value on the environmental improvement, e.g. protesting against the use of taxes to achieve this. The practice is highly questionable as Meyerhoff notes but he proceeds to use follow-up questions to exclude 56 per cent of the sample. How this may have affected the results is unclear. Among the remaining sample a higher WTP is found amongst those accepting money as a measure of environmental value, although interestingly rejection of money as a measure does not mean all such respondents give a zero WTP. This is consistent with other findings where those rejecting an economic rationale for valuing the environment (e.g. rights based) have been found to have a

8

Clive L. Spash, Sigrid Stagl and Michael Getzner

positive WTP; although, in apparent contrast with the results here, WTP has also been found to be higher amongst such groups than amongst those favouring economic trade-off justifications for their WTP (Spash 2000a). A key finding by Meyerhoff is that non-users’ WTP is explained by attitudinal and economic variables while only attitudinal variables prove significant for the user group. This would seem to imply that users have a stronger non-economic value orientation. In discussing attitudes, Meyerhoff notes the difference between measuring general attitudes which are related to ethical beliefs, and basic values, and those attitudes which are specific to a behaviour. The latter category and correspondence between the level of attitude framing and behaviour are recommended if attitudes are to be expected to predict behavioural intentions. His measures of attitudes towards Nature and climate change fall closer to the former category in terms of their generality, i.e. they are related to but unspecific in terms of the WTP scenario being valued. The results show there are clearly strong statistical relationships between CVM results and underlying attitudes. What remains unclear is the extent to which these motives are driven by social norms and ethical beliefs and how far the type of environmental entities currently being subject to CVM surveys fall outside the economic realm of value. Mosler is also concerned with the mix of economic and non-economic motives for human behaviour. He pursues a model of behaviour which includes social and personal factors which he differentiates from those which are purely economic. However, his emphasis is on how the psychology of the individual can be modelled to explain social decisions rather than narrowly defined values. The agent based social simulation model he develops is explained carefully along with a series of definitions and feedback loops which aim to characterise human resource use and environmental impacts. Amongst the factors included as explanatory of human behaviour are attitudes, subjective norms, behavioural control, weighing costs and benefits, and sustainability motives (combining a value and norm orientation). The CBA component is regarded as encapsulating economic considerations via personal returns from a given action. The sustainability motive is strongest where an individual values the environment highly and the gap between actual and sustainable patterns of use is small (on the basis that a large gap is demotivating due to the difficulty of closing it). Mosler examines the conditions necessary for a collective reorientation towards environmentally sustainable behaviour. His simulation modelling shows the role which can be played by the environmentally friendly behaviour of some ‘pioneer’ individuals and how policy might be developed to increase the number of persons joining ranks with such pioneers. Sustainability requires such an increase to build its own momentum leading to a large-scale ‘turn-around’ of previous environmentally harmful patterns of behaviour. The aim of the simulation approach is to indicate means by which policy instruments, such as environmental campaigns, can be implemented most effectively. One aspect of the model is how people process information and whether they become engaged and find an argument persuasive. This has also been raised as an issue for CVM because central processing means deep evaluation while peripheral processing means being led by comparatively insignificant factors. Indeed, for example, ethical

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beliefs have been cited as such a peripheral factor (Ajzen et al. 1996), but empirical evidence shows those entering central processing mode tend to rely on their ethical beliefs as well as scientific information (Spash 2002c). As Mosler notes, there is scope for the interaction of simulation modelling and empirical studies which would seem essential for increasing understanding of complex systems. Taking multiple values into account Multiple criteria analysis (MCA) was initially developed for production planning and methods were also applied in the field of financial management. The field has since expanded dramatically and a great number of algorithms are now available for weighting, comparing and combining information. Since they were developed with different problems in mind, researchers and policy-makers in the environmental field need some way to distinguish between the different algorithms. De Montis, De Toro, Droste, Omann and Stagl develop a framework for the comparison of MCA methods. They set out to identify a list of criteria referring to issues of particular relevance for the analysis of questions concerning sustainable development such as uncertainty, stakeholder involvement and non-substitutability between criteria. This framework is then employed to analyse and compare seven MCA methods frequently used for integrated assessment, namely: multiple attribute value theory (MAUT), analytic hierarchy process (AHP), evaluation matrix (Evamix), Electre III, Regime, Novel Approach to Imprecise Assessment and Decision Environments (NAIADE), and Multi-Objective-Programming (MOP)/ Goal Programming (GP). The results highlight the types of issues for which the respective methods are most suitable as well as problems that cannot be addressed by any MCA method. Thus, MAUT requires adherence to welfare theory, NAIADE and AHP are useful where there are value conflicts, MAUT and AHP are useful as learning tools; where constraints are important Electre III and MOP/GP are best, the latter also serve to address cases lacking discrete alternatives, and for ranking alternatives MAUT, AHP, Evamix and Regime are suitable. Each approach has its own context within which it can work best but the analyst is then responsible for selecting the most appropriate tool and justifying that choice. When first developed, MCA methods were meant as tools for optimising production processes and for identifying Pareto optimal outcomes of planning tasks. Since identifying an optimal solution is impossible for problems in complex systems, MCA methods have more recently been combined with processes of public and/or vested interest (stakeholder) participation. This allows the analyst to gain legitimacy for the analysis but also adds to MCA the aspect of a learning tool, i.e. allowing participants to explore the values and qualities of the problem. Proctor addresses the Comprehensive Regional Assessments of Australia’s forests which aimed to ensure sustainable management. Planners faced the task of integrating different forest values in order to designate areas as reserves. Proctor uses a case study, outside the official assessment, which shows how MCA can be applied to the problem. She makes use of official assessments, criteria and priorities placed on forest values by a stakeholder group which was involved in the assessment

10 Clive L. Spash, Sigrid Stagl and Michael Getzner of the Southern Forest Region of New South Wales. Both the preferred option and the disparity/agreement between group members’ evaluations are explored. Polarised opinions can thus be identified and discussions about compromises can be supported within the MCA framework. Proctor points also to new requirements for research processes of this kind, such as the need for a trained facilitator to aid interactive group decision-making. The outcome shows how values come to the fore in such processes. The two most favoured options reveal a choice which can be summarised as between environmental quality and employment. Sensitivity analysis can be used to show the robustness of the outcome and the failure of what might appear to be compromise options. This shows the way in which MCA can reveal value differences which inform policy. Stirling and Mayer are also concerned by the approach governments take to form regulations and implement legislation. Their aim is to explicitly address issues of uncertainty related to the regulation of environmental and health risks. The chapter explains the need for a set of precautionary approaches, and as a consequence, reveals the problems associated with narrow risk assessment techniques based on rational choice and probability theory. Stirling and Mayer develop a set of criteria by which any ‘regulatory appraisal’ (i.e. the way in which regulations are established) can be evaluated. The general approach is to select a single criteria for assessment and exclude much information relevant to, say, technological risks. Hence the criteria here concern the need for: greater humility, completeness, consideration of net benefits in different contexts, transparency, full engagement of interested and affected parties, mapping out different value judgements and framing assumptions, and allowing for divergent views by considering diverse option mixes. These requirements might sound like something of a wish list which is itself hard to implement but Stirling and Mayer then go on to show how such an appraisal can be performed. An area of considerable conflict in the UK has been the genetic modification of agricultural crops. Stirling and Mayer use this as a case study to apply a novel approach which they call multi-criteria mapping (MCM). Twelve individual high profile protagonists in the GM food debate were selected as participants. These individuals came from a variety of backgrounds, including academics and government advisers, environmental, consumer and religious organisations and representatives from the farming, food and biotechnology industries. Results are reported on each individual and under the categories of ‘academic’, ‘NGO’, ‘industry’ and ‘government’. Interviews were used to get each individual to add options, appraisal criteria, apply and scale the criteria against the options, and weight the criteria. In addition to the six ‘basic options’ a further 18 alternative agricultural strategies were identified; 117 appraisal criteria were defined by different participants. There are lessons for standard MCA as the authors state: ‘Participants adopt a variety of different “framing assumptions”, resulting in significant differences in the scores assigned by different participants under the same criteria. This has implications for conventional multi-criteria analysis, in which scoring is often conducted by a separate body of experts, with an assumption that different value judgements can be captured simply in the weightings.’ In

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addition, the information gained on vested interest is often surprising: for example, the biotechnology industry representatives underemphasised the social, environmental and safety considerations which are prominent under all other perspectives. The approach provides specific information on the motives behind positions as well as allowing an overall appraisal of options. In the latter regard, the organic farming and integrated pest management options tend to perform significantly better overall. Participation, deliberation and valuation Aldred starts out with a comparison of the CVM with the CJ. The former is an individualistic preference based method while the latter is a community based form of social deliberation. The CVM and CJ answer to different institutional needs, cultural roles and social contexts and are based upon different explanations of rationality. This raises the question as to what extent they can in fact be compared. Aldred argues that an assessment of which consultation process is superior for policy formation can be undertaken on the basis of considering the added value of discussion. He specifies the characteristics of the policy process in terms of open and closed inputs (or task set) and outputs (or expected result). The former is principally classified according to control, while the latter according to agreement. The CVM has a closed input while the CJ is normally open but has the option of considering a closed input. Aldred argues that comparison requires he match the requirements so a CJ with closed input must be considered. In order to achieve the same for outputs he argues the complete decision process must be considered through to the final recommendation, i.e. a full CBA compared with the CJ best option. However, he does allow that these requirements only apply for direct comparison and that indirect comparison can also be made, although that is not the aim in his chapter. Aldred draws a distinction between the role of discussion versus deliberation in decision processes and prefers to use the former term. So his aim is to compare closed forms of CVM and CJs on the basis that they differ in term of the latter adding discussion prior to an aggregative decision, and his aim is to judge whether the content of decisions is better with that discussion. He goes on to show that arguments by participants in a CJ must appeal to widely shared principles and he discredits the oft-cited self-interested/selfish and strategic explanations for human behaviour in such contexts. He cites O’Neill (1993) on the Aristotelian view which encourages self-awareness on behalf of listeners so they recognise their inability to evaluate certain claims and instead concentrate on assessing the character of the speaker. In general, such an approach is applied when we judge a person’s motivation, their trustworthiness and their good judgement. CJs are then seen as having the potential to allow listeners to assess the credibility of speakers as they share arguments. Having negated the criticisms arising mainly from a rational choice theory perspective, Aldred finishes by exploring the implications of imposing a closed output on a CJ and hence moves into the area of DMV (discussed earlier in this chapter), which claims to combine the advantages of discussion with the merits of a valuation output. The concerns

12 Clive L. Spash, Sigrid Stagl and Michael Getzner raised here cover forcing a decision on the CJ, losing the trust of the jurors in the process, and whether quantitative or qualitative outputs are appropriate. In summary, where bounded rationality is likely to be severe, principles of public interest arise, or important private information is present, CJs appear more attractive, and while both CJs and the CVM have problems Aldred does not see DMV as the solution. He does, however, appeal for ‘a careful, empirical, case-bycase comparison’ to add to his abstract epistemic arguments. Kenyon and Hanley are concerned with the empirical application and comparison of all three methods (CJs, CVM, DMV) to the Ettrick Forest Floodplain Restoration Project in Scotland. The arguments are firmly based upon an economic model with, for example, CJs described as addressing ‘the information problem better than the CVM’, i.e. addressing the fact that preferences are formed and not merely informed during a valuation process and any information set is never ‘neutral’ (see Spash 2002c). The reason Kenyon and Hanley pursue DMV is because CJs ‘do not provide an economic estimate of the value of any particular project, nor whether it constitutes an efficient use of resources’. For the CVM a stratified sample of nine towns in the Borders Region of Scotland resulted in 336 responses to the survey including the request for a charitable donation. Of these, 29 per cent were classified as protest bids and removed from the data set and any further analysis. CJ participants were selected from the CVM questionnaire respondents. Kenyon and Hanley claim that the eleven jurors were selected ‘to be representative of the Borders population’, although what they represent is left unspecified. The jurors were concerned that they might need to set up a trust fund to cover underfunding (as implied by the CVM) but ‘after speaking with a member of the local community’ were reassured that the local community was fully involved in the project and the site would be well managed into the future. The CJ considered environmental and social elements important in judging the success of the project and in making management recommendations, but ‘did not seem to consider economic criteria important’. Selection for the DMV was on the basis of responses to a letter sent to 500 households. Two workshops were carried out in each of two towns in the Borders, giving a total of four workshops and 44 participants. The DMV started by administering the CVM, then took participants into small group (four to seven people) discussions on problems and management options, and finally asked them as individuals to answer some questions including whether they now wanted to revise their WTP and only 14 per cent did so. DMV initial bids included 5 per cent protest bids and 34 per cent ‘don’t know’ responses, and only two people moved from the latter after the discussion stage. An advantage of the DMV over the CVM was seen to be the information on positive and negative views of the project. When an aggregated WTP figure was presented to DMV participants there were three responses: the impossibility of putting a value on such a project, the poor economic situation meaning the need to spend money elsewhere, and wanting some other public fund to pay. Overall the authors conclude in favour of DMV as a middle path. James and Blamey concentrate on a DMV approach, which they describe as a CJ with the added task of determining societal WTP for a specified programme

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involving environmental improvement. They open by addressing problems and issues relating to the theory and application of both the CVM and deliberative approaches. This aims to show the potential of a DMV approach. The empirical case study is the management of national parks in New South Wales, Australia. As in the chapter by Kenyon and Hanley, there was a concern that the participants be representative and in this case the criteria are given (gender, age, place of residence, ranking of the environment in relation to other social issues, occupation, income, income source and education). Such representation is a little strange in these studies as the only aim can be statistical significance but the sample sizes are so small as to make this irrelevant (for elaboration on the difference between political and statistical representation, see O’Neill 2001). There were thirteen participants (and one no show). The DMV panel was given three options developed by the researchers and a fourth developed by the researchers on the basis of answers given to a ‘straw preference poll’ (although what this involved remains unclear). Participants were limited to considering only these options. This approach can be seen as Aldred’s closed input and closed output case, making the DMV comparable (in those terms) to the CVM. After individual consideration of three options the panel was convened and the choices discussed. The aim of the researchers seems to have been for a consensus report and the panel gave a preferred option with qualifications covering the concerns of those who were initially against that option. Next, the valuation question was introduced as part of the fourth option. The task for the panel was to determine how high a park ‘levy’ would have to be before the NSW public would be no better off than under the status quo. That is, they were being asked to set the average annual WTP, rather than their own maximum WTP as in a CVM survey. Perhaps surprisingly, the panel was able to come up with two amounts and voted to decide which amount was to be recommended. The use of majority voting occurred at several stages in the discussions in order to close down dissent. In their conclusions the authors discuss a question which remains open: how to interpret the value obtained. The amount fails to relate to economic welfare theory and would seem hard to compare with other microeconomic welfare theoretic measures. At the same time, the thirteen panellists cannot claim to be statistically representative, which only leaves them with stating a political position as might be done more directly. The authors also raise several other issues including consensus formation, decision rules for polling or voting, equality of juror impact, and provision of information. Arzt picks up some of the same themes in addressing whether researchers should aim to reveal existing preferences or initiate and foster learning processes and thereby help form preferences. The contention is that environmental valuation is a subjective, cultural and contextual phenomenon. The approach for addressing policy needs here is to appeal to vested interest group representation in a framework termed an ‘interactive valuation process’, where individuals, in groups, construct values rather than express prior preferences. This approach is equated to a roundtable and cited as deriving from Ostrom’s (1998) ‘second generation models of rationality for social dilemma situations’ to understand when co-operation in small groups can take place. Much is made of the need to build trust over time

14 Clive L. Spash, Sigrid Stagl and Michael Getzner through repeated meetings, although this would seem to contrast significantly with the CJs used in other chapters of this volume. In this respect, the motives for behaviour described by Arzt are worth comparing with those discussed by Aldred. She also describes the roundtable as a consensus seeking exercise in which decisions are made without voting or other mechanisms, and this can be contrasted with the way in which James and Blamey ran their DMV panel. In this roundtable consensus seeking, some tools and techniques are advocated including MCA, visualisation techniques and professional moderation. The case study concerned a roundtable run in the Uckermark, Brandenburg county, region of northeast Germany with the topic of decentralising decisions about agri-environmental measures. Agri-environmental schemes are already run from the local government level (as opposed to, say, those in the UK) but decisions on targets are made by experts without consultation with farmers or conservationists. A community meeting was used to select the roundtable with 43 people out of 100 attending the meeting and 23 volunteering. Six meetings were held on a monthly basis with varying participation rates. The interdisciplinary research team from different institutions found their own problems before even starting the roundtable: ‘The different backgrounds of the project team made it difficult to find a general understanding of the definition of “value” and “learning processes” beforehand. The team could not create a common understanding about the institutional arrangement’. The aim had been to cover a range of five issues in sequence: reasons for the problem and expected longterm consequences, solutions including justifications, measures to achieve these solutions including monitoring, financing and action planning. However, after three meetings, the main interest of the stakeholders was still focused on measures and their financing. One farmer is reported as stating: ‘I would do anything, if I got enough cash.’ Attempts to discuss scientific uncertainties over a specific type of water body (Sölle) management, at the third meeting, also failed as the farmers/ land managers expected the expert scientists to tell them what was best to do. Only when the next (fourth) meeting followed a very structured approach to management of these water bodies was some headway achieved. The final two meetings switched to soil erosion: the fifth meeting was dominated by a soil expert and the sixth, where only three farmers attended, by the agricultural administration. The difficulty of running this process compared with the high expectations of the theoretical literature raises a range of good lessons for research and practice. Power is an important element and affected representation with small farmers unwilling to attend knowing that ‘consensus’ processes in the past were dominated by large cooperatives, and women being a minority and silent. This has obvious parallels with the ‘willingness to say’ problems as raised by O’Neill and discussed by Aldred, and this issue also arose directly with experts dominating some meetings. Representation problems also arose in a different form with one organisation alternating their representatives but with the two individuals holding very different opinions. The need for greater structure in the process might be met by use of an MCA type of process such as the MCM approach developed by Stirling and Mayer. However, there also may be some cultural differences

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arising in this study (e.g. desire for structure and being told the best option, high esteem of scientists), so that how far the design features can be determined in any one country-specific study becomes a relevant research question. Indeed more generally the extent to which the benefits of participation and deliberation can be regarded as universal remains unanswered. Niemeyer shows how we might begin to address this last point with respect to CJs. Political science advocates of CJs have seen them as deliberative forums in which people can find truths and transform themselves away from more mundane daily preoccupations. Whether CJs are a process which can lead to the change of fundamental attitudes and preferences in relation to environmental policies is then a testable hypothesis. Niemeyer contends that preferences are shaped during deliberation by information, attitude and process. The chapter shows how to measure both changes to (rank ordered) preferences and the underlying subjectivity for those preferences (using Q method). The case study concerns a controversial ‘road’, the Bloomfield Track, constructed by politically influential developers through a rainforest in north Queensland, Australia, against the protests of conservationists. The area was later, after a change of regional government, designated the Wet Tropics World Heritage Area. What action should be taken with respect to the route remains a problem. Local and Aboriginal communities now use the track as a convenient means of communication while environmentalists regard it as a scar across a World Heritage site causing erosion and damage to forest and coastal reef ecosystems. A random-stratified sample of twelve people from the region was given the task of considering management options for the Track over a four-day period. Attitude information was obtained by surveying participants at the outset of deliberations, at the midway point, and immediately after proceedings. The combined data for all three Q sorts by the jurors produced four distinct factors: Preservation, Optimism, Pragmatism and Symbolism. Factorial analysis revealed four preference options: Close Road, Stabilize, Bituminize and Status Quo. This approach allows analysis of motive, and examples of correlations are Preservation with Close Road and Pragmatism with Status Quo. Preferences with regard to these options changed substantially during deliberation. Two jurors experienced a near complete reversal of their original orderings, and preferences among jurors converged, although they never reached consensus. Jurors were encouraged by the process to take a community perspective, rather than that of individual self interest. By the end of deliberation road closure had become the most preferred option. As Niemeyer notes, this CJ was a success in terms of the expectations from political theory but it is also only one example and others have had mixed results, as did Arzt in this volume. He concludes that the outcome of deliberative forums is highly sensitive to context and design, and a wider transformation of society towards deliberative democracy is required but that such institutional designs can help with that transformation.

16 Clive L. Spash, Sigrid Stagl and Michael Getzner

Drawing out some lessons There are significant gains to be made by further use of participatory approaches in environmental management, but maintaining the interest, involvement and commitment of civil society may prove a major challenge. Enthusiasm on behalf of researchers for new approaches needs to be qualified by awareness of the difficulties in applying techniques in different contexts and their potential for both failure and manipulation. At the same time consumer boycotts and support for non-violent direct action (e.g. anti-road demonstrations) do indicate public dissatisfaction with current institutions and a demand for greater say in policy, as opposed to an infrequent vote for a possible representative. The concern for the political legitimacy of government policy is particularly relevant in societies with low voter turn-out or where systems fail to represent minority parties. Both the UK and the USA, for example, have systems which increasingly seem inadequate as far as voters are concerned. This general problem takes on specific significance in the formation of environmental policy where the directly concerned political parties are small and lack representation via established institutions. Thus, for example, under the UK system, which has no proportional representation at the national level, a substantial minority of votes for the Green Party has in the past been unable to gain even one member in parliament. At the same time redressing the political imbalance through new institutions is no easy task. In this volume contributors show the difficulty in getting politically weak groups to voice their opinions in forums which are hoping to empower them. Various features of representative democracy have been raised by O’Neill (2001). In particular, environmental policy brings to the fore the question of representation for the silent voices of non-humans and future generations. Another aspect of representation is how information is delivered through the interaction of science and policy. The role of expert and ‘objective’ scientific information to inform policy on uncertain and complex environmental problems has been brought into question on issues ranging from nuclear power to genetically modified crops. That there is a problem with the traditional approach to environmental policy processes is apparent from the greater attention given in recent years to a range of alternative institutional approaches (Royal Commission on Environmental Pollution 1998). However, while several techniques have been increasingly deployed they also have their own limitations. The use of focus groups in the UK was seen as providing some additional legitimacy for policy, although now such an approach often receives popular derision as a marketing technique which has been overused. Consensus conferences have been employed in several European countries but consensus is itself a questionable goal when facing fundamental differences in perspective and values. There are problems with closing down a debate in an effort to achieve an artificially stable outcome described as consensus. Instead there is a need for mapping out the contours of the debate via an approach such as that suggested by Stirling and Mayer in this volume. The use of ‘stakeholders’ to represent vested interests directly in the decisionprocess has entered into both policy and research with the emphasis on addressing

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the needs of ‘end-users’. Both CJs and the appeal to vested interests raise similar questions as to who should be represented and how they should be represented. CJs have become more common as well as being an increasing focus of research. Some environmental economists have also become increasingly concerned to employ such approaches to increase the legitimacy of their valuation work. The rise of DMV is a significant development as an indicator of the desire for greater legitimacy for the values being derived in economic assessments. The reasons driving this move are recognised inadequacies in the economic model of human behaviour. There is now far greater acceptance by economists that psychological motives are important and preferences are often constructed in response to research aiming to discover how people value the environment. The problem which then arises is how far the values being derived from DMV remain valid having been removed from their theoretical basis in economic welfare theory. If values as derived by Blamey and James are to be given weight in decision processes, there is a need for a new theoretical underpinning. At the same time, social psychology raises many insights which economists are only just beginning to discover. The work on CVM has exposed problems with standard approaches and data interpretation. Yet there is still a surprising readiness amongst researchers to throw away large parts of their samples for analytical and/or practical convenience. There are two examples in the current volume where protest bids are excluded, removing 29 per cent of the sample in one case and 56 per cent of the sample in another. Rather than excluding such information, researchers need to investigate and understand what individuals are telling them. Perhaps the technique is failing but with CVM what seems to be happening is that the economic model is being revealed as only a limited frame in which humans are prepared to operate. Some of the people may be homo œconomicus all of the time, all of the people may be homo œconomicus some of the time, but all of the people are never homo œconomicus all of the time. In environmental valuation, rejection of the economic motive for behaviour is common and this cannot be disregarded purely on pragmatic grounds. In the past, the counter to critiques of CBA has often been that ‘there is no option’ and that ‘because society uses a money metric, so must environmentalists’. The treasury departments of government are certainly often the strongest and lie behind many decisions, but there are also other branches of government and civil society, and different forums in which decision processes operate. This volume shows there are alternatives and these can be most rewarding in terms of gaining insight into value conflicts, while aiding and improving policy. There is a need to evaluate the opinions of experts as one perspective on the implications of any project, and set their role within a broader social context where a range of motives operate and different values are expressed with equal legitimacy. However, there is no pretence that alternatives to traditional environmental valuation lack their own problems and can be difficult to implement successfully. Clearly, more work is required which breaks down the boundaries between disciplines and more researchers are required who are prepared to venture out of the comfort zones of mono-disciplinarity into the challenging areas of interdisciplinarity. Ecological

18 Clive L. Spash, Sigrid Stagl and Michael Getzner economics is one such attempt at bringing together diverse perspectives and approaches.

Note 1

Revenue raising is a key objective of taxation rather than designing environmentally efficient and effective taxes. This means taxes which may be described as environmental in fact fail to address the pollution problem to which they are supposedly related. For example, a tax justified as reducing the Greenhouse Effect may select carbon dioxide emissions regardless of the other gases needing control and the tax may then relate only to industrial emissions from point sources, ignoring a whole range of non-point, household and public sources, or select only one specific fuel. Such decisions are taken on the basis of ease of administration and revenue-raising potential rather than their economic efficiency at controlling pollution and matching marginal social costs of environmental use.

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International Yearbook of Environmental and Resource Economics 2000/2001, Cheltenham, Edward Elgar: 41. Knetsch, J.L. and J.A. Sinden (1984) ‘Willingness to pay and compensation demanded: experimental evidence of an unexpected disparity in measures of value’, Quarterly Journal of Economics 99(3): 507–21. Martinez-Alier, J., G. Munda and J. O’Neill (1998) ‘Weak comparability of values as a foundation for ecological economics’, Ecological Economics 26(3): 277–86. Niemeyer, S. and C.L. Spash (2001) ‘Environmental valuation analysis, public deliberation and their pragmatic syntheses: a critical appraisal’, Environment & Planning C: Government & Policy 19(4): 567–86. NOAA (1993) ‘Natural resource damage assessment under the Oil Pollution Act of 1990’, Federal Register 58(10): 4601–14. O’Connor, M., S. Funtowicz, F. Agliera-Klink, C.L. Spash and A. Holland (1998) Valuation for Sustainable Environments: The VALSE Project Full Final Report. Ispra, European Commission, Joint Research Centre: 395. O’Neill, J. (1993) Ecology, Policy and Politics: Human Well-Being and the Natural World, London, Routledge. O’Neill, J. (2001) ‘Representation’, Government and Policy 9(4). Ostrom, E. (1998) ‘A behavioral approach to the rational choice theory of collective action’, presidential address, American Political Science Association. American Political Science Review 92(1): 1–22. Royal Commission on Environmental Pollution (1998) Setting Environmental Standards, London, Her Majesty’s Stationery Office: 232. Spash, C.L. (1998) ‘Investigating individual motives for environmental action: lexicographic preferences, beliefs and attitudes’, in J. Lemons, L. Westra and R. Goodland (eds) Ecological Sustainability and Integrity: Concepts and Approaches, Dordrecht, Kluwer Academic. Spash, C.L. (2000a) ‘Ecosystems, contingent valuation and ethics: the case of wetlands recreation’, Ecological Economics 34(2): 195–215. Spash, C.L. (2000b) ‘Ethical motives and charitable contributions in contingent valuation: empirical evidence from social psychology and economics’, Environmental Values 9(4): 453–79. Spash, C.L. (2000c) ‘Multiple value expression in contingent valuation: economics and ethics’, Environmental Science & Technology 34(8): 1433–8. Spash, C.L. (2001) ‘Deliberative Monetary Valuation’. 5th Nordic Environmental Research Conference, University of Aarhus, Denmark. Spash, C.L. (2002a) ‘Empirical signs of ethical concern in economic valuation of the environment’, in D.W. Bromley and J. Paavola (eds) Economics, Ethics, and Environmental Policy: Contested Choices, Oxford, Blackwell: 205–21. Spash, C.L. (2002b) Greenhouse Economics: Value and Ethics, London, Routledge. Spash, C.L. (2002c) ‘Informing and forming preferences in environmental valuation: coral reef biodiversity’, Journal of Economic Psychology 23(5): 665–87. Spash, C.L. and C. Carter (2002) ‘Environmental valuation methods in rural resource management’, in F. Brouwer and J. van der Straaten (eds) Nature and Agricultural Policy in the European Union: New Perspectives on Policies that Shape the European Countryside, Cheltenham, Edward Elgar: 88–114. Spash, C.L. and N. Hanley (1995) ‘Preferences, information and biodiversity preservation’, Ecological Economics 12(3): 191–208. Spash, C.L. and I.A. Simpson (1994) ‘Utilitarian and rights-based alternatives for protecting Sites of Special Scientific Interest’, Journal of Agricultural Economics 45(1): 15–26.

20 Clive L. Spash, Sigrid Stagl and Michael Getzner Spash, C.L., J. van der Werff ten Bosch, S. Westmacott and J. Ruitenbeek (2000) ‘Lexicographic preferences and the contingent valuation of coral reef biodiversity in Curaçao and Jamaica’, in K. Gustavson, R.M. Huber and J. Ruitenbeek (eds) Integrated Coastal Zone Management of Coral Reefs: Decision Support Modeling, Washington, DC, World Bank: 97–118. Ward, H. (1999) ‘Citizens’ juries and valuing the environment: a proposal’, Environmental Politics 8(2): 75–96.

A framework for valuing nature

Part I

Extending the environmental valuation approach

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22 Michael Getzner

A framework for valuing nature

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A framework for valuing nature Regional biodiversity Michael Getzner

Introduction The contingent valuation method (CVM) seems to divide the economics profession. While there might be higher agreement among a core of (neoclassical) environmental economists on the theoretical foundations of valuing public goods with that specific method, applying the CVM is an important point of scientific discourse. Ecological economists not only doubt empirical applications of the CVM in many respects, but also question its welfare theoretic foundations and more generally those of cost–benefit analysis (CBA). A crucial point in that debate is the understanding of markets as social institutions, and the behaviour of individuals as embedded in a specific social and institutional context. An important element in that debate is also the critique of the concept of Homo oeconomicus who is assumed to have well-behaved, stable preferences, which are ‘home-grown’ and can be elicited by means of CVM surveys – provided several guidelines are followed (e.g. Arrow et al. 1993; Department of the Interior 1994). An aggregation of these individual values is said to point to the (societal) ‘value’ of a natural good, and compared with the costs of protecting the respective natural good, it is assumed that society’s welfare is in principle not much more than the sum of individual welfare aggregated in a social welfare function. Underlying preconditions for this approach are the notion that individuals are in principle willing to trade money for natural goods. That means that even in the case when individuals hold ethical beliefs or commitments often associated with natural goods, they can be ‘bribed’ to give up their beliefs for money. It has to be assumed that individuals who state a willingness to pay (WTP) base their decisions on similar foundations and considerations regardless of the nature and the characteristics of the good in question. Thus, using the CVM in a CBA for societal decisions assumes that individuals do not take different viewpoints when valuing private or public (natural) goods because contingent valuation puts individuals in a situation where they decide on public goods in a market-like setting. Another element in this debate is whether the hypothetical bias can have such an influence that results of CVM studies are fundamentally flawed. The main argument is that people behave differently when actually forced to ‘realize’ their stated WTP.

24 Michael Getzner The ‘standard’ and ‘extended’ model of valuation Figure 2.1 shows the ‘standard’ model of valuation and an ‘extended’ model that includes a number of additionally influential factors regarding an individual’s stated behaviour (stated WTP). Normally, studies explaining WTP in a bid function try to relate a number of individual factors (socio-economic characteristics like age and income, knowledge, perception of environmental quality) to respondents’ WTP bids.1 The explanatory power of such models is often very low (Mitchell and Carson 1989, argue that models should at least explain 15 per cent of the dependent variable’s variation). A low explanatory power might indicate omitted variables bias indicating that those individual variables chosen to explain stated behaviour are not the variables which fully influence a respondent’s stated WTP. Following that argument, other variables might be able to reasonably explain stated behaviour with a higher degree of accuracy. Recently, a number of authors have stressed the importance of the social and institutional context of decisions, especially when these decisions refer to public goods (e.g. Hodgson 1997; Hayden 1993; see with reference to bathing water quality: Georgiou et al. 1998). An extension of the ‘standard’ model of valuation2 to account for additional factors is presented in the lower part of Figure 2.1. First, extending individual factors may play a vital part in a valuation survey when respondents are not willing to trade natural goods for money (lexicographic preferences, see this section). The institutional context of the survey is on the one hand, of course, set up by the payment vehicle and the valuation questions themselves.3 On the other hand, respondents’ beliefs about and perceptions of the CVM instrument may alter their behaviour (next section). The social context comprises both beliefs about the referendum and about assumptions on others’ contributions, and the consumer–citizen dichotomy (third section). Figure 2.1 also shows the labels of variables that operationalize the different additional factors (to be used in the econometric model in the empirical part of this chapter). The central questions for which answers are sought by means of the empirical survey in the third section are: how important is the notion of lexicographic preferences and what is the effect of the respondents’ beliefs about institutional and social context variables in explaining WTP bids for a regional biodiversity programme in Carinthia (Austria)? The structure of this chapter is as follows. First, the elements of the ‘extended’ model of valuation are briefly discussed, presenting a focused literature review of the specific issues which build the basis of the empirical study presented in the second part of the chapter. Second, results of a valuation study designed to include ‘extended’ factors into the bid function are presented.

The extended context of valuation: some important issues Lexicographic preferences and the willingness to exchange When it comes to valuing biodiversity4 in economic (monetary) terms, the issue of substitutability is an important aspect: economic valuation becomes much more

Elements of the institutional context • Individual beliefs on setting and instrument and epistemological issues (e.g. ‘Protest’, ‘Influence’) • Hypothetical referendum (‘Cheap’)

Reasoning and processing • Bounded rationality • Risk aversion

Note: For a detailed description of variables see Table 2.3 on page 38.

Figure 2.1 The ‘standard’ and ‘extended’ model of valuation

Additional individual factors • Lexicographic preferences

Individual factors • Socioeconomic characteristics (e.g. ‘Age’, ‘Gender’, ‘Income’, ‘Children’) • Knowledge, perceptions and behaviour (e.g. ‘Biodiversity’, ‘Member’, ‘Donations’)

Elements of the social context • Individual beliefs about the context of the referendum, personal contribution above/ below average (‘Referendum’, ‘Average’, ‘Majority’) • Attitudes to public goods (‘Public’, ‘Minority’) • Consumer vs citizen (‘Con_cit’)

Extending the model

The ‘standard ’ model of explaining WTP bids

Stated behaviour • WTP in contingent markets • WTA • Other stated preferences

A framework for valuing nature 25

26 Michael Getzner simple if the natural good ‘biodiversity’ can simply be exchanged for man-made capital (private goods, money). Up to now there has been much discussion of the possibilities of substituting environmental goods or single characteristics of these goods such as biodiversity.5 On the one hand, ecologists argue that ‘[b]iodiversity is a resource for which there is absolutely no substitute; its loss is irreversible on any time scale of interest to society’ (Ehrlich and Ehrlich 1992: 225). In contrast to this argument, Solow (1993: 181) finds that history tells us an important fact, namely, that goods and services can be substituted for one another. … There is no specific object that the goal of sustainability, the obligation of sustainability, requires us to leave untouched. … Sustainability doesn’t require … that any particular species of fish or any particular tract of forest be preserved’ (emphasis in the original). While there might be different approaches to the substitutability issue in natural science, it is crucially important to separate findings of natural science from viewpoints (perceptions) and preferences held by respondents in a CVM survey.6 The CVM is part of a social science research method focusing on people’s (as economic subjects) preferences and perceptions in a very specific manner (Luhmann 1986). Elicitation of monetary values in contingent valuation surveys requires welldefined utility functions on the good in question as well as fulfilment of the basic welfare postulates of CBA. According to that foundation there must exist a utility function Ui = U(Xj, E) which includes Xj (a vector of marketed, private goods) and E (a vector of public goods, e.g. biodiversity). The WTP of an individual i to prevent a decrease from Ek1 to Ek2 is given by WTPi = e(pi, Ek1, U1) – e(pi, Ek2, U1) with e(.) being the respective expenditure function (e.g. Spash and Hanley 1995: 193). U1 denotes the utility of i before the quality change of Ek took place. However, in the context of environmental valuation, respondents often exhibit behaviour corresponding to the opinion ‘that some preferences are superior to others’ (Edwards 1992: 121). Such preferences are often formed on the basis of ethical judgements or commitments where a ‘right’ or a ‘wrong’ exists, but where a willingness to trade at the margin does not exist. Such preferences are labelled ‘non-compensatory’ preferences (Lockwood 1997; Gowdy 1996; Hanley et al. 1995). Such preferences can be subsumed under the broader concept of lexicographic preferences, which have quite a long history (e.g. Jeffrey 1974; Sen 1977; Menger 1871; Peukert 1998; de Dios 1995; Encarnación 1990; Stork and Viaene 1992). The neoclassical model of exchange rests on the assumption of the willingness to trade (willingness to exchange, ‘model of pure exchange’; Gowdy and Olson 1994: 162). A conceivable trade-off, which is nothing more than the well-known indifference curve between goods, must exist in the mind of respondents being asked a CVM question.7 While the ‘axiomatic development of economic utility theory does not a priori exclude any motive or any good from an agent’s utility function’ (Carson 1998: 18; Johansson 1992; Aldred 1994), the willingness to trade is at the core of contingent valuation. Lexicographic

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preferences imply a hierarchical ordering of wants and therefore unwillingness to trade a specific good at the margin (e.g. environmental goods such as biodiversity) for private consumer goods. There is some empirical evidence from psychological research indicating that decisions are often made by lexicographic ordering (ranking) rather than by matching costs and benefits as usually assumed by economists. While observed preferences are actually constructed in the elicitation process in a context-sensitive way, the prominence hypothesis is often strengthened by empirical research (Tversky et al. 1988). That hypothesis holds that choice is expected to be more lexicographic than trading (matching). Individual decisions on biodiversity or on the survival of single species can be considered as a typical form of choice (no matching or tradeoffs will be made) if preferences are non-compensatory as outlined above (e.g. Spash and Hanley 1995). Interestingly, the critique of CBA made by Boulding (1969) in part comprises what nowadays could be called lexicographic preferences. While Boulding in principle acknowledges the role and importance of CBA in the evaluation of social choice and even social institutions, he admits that two fundamental problems arise out of the concept of CBA: one which he rejects is the inclusion of ‘benevolence’ and ‘malevolence’ in CBA (selfishness, altruism) which can in principle be included in interdependent utility functions. What might be ‘fundamental and harder to repulse’ is the notion of a ‘heroic ethic’ (Boulding 1969: 9), which cannot be included in CBA because a typical trade-off (and willingness to trade) does not exist. While Boulding only sees three main fields of this ‘heroic ethic’ (the military, religion, sports), he admits that the picture of economic man painted by economists is a caricature because humans also hold ethical beliefs. In those cases, trade is thought to be ‘somehow dirty’, and the ‘principle of prostitution’ would apply ‘to virtually all areas of human life’ (Boulding 1969: 10). Ethical commitments and rights-based beliefs towards the environment and other species are often seen as origins of lexicographic preferences (Common et al. 1997; Boyce et al. 1992).8 Sagoff puts such preferences in the light of Kantian ethics (Sagoff 1998). Moreover, Vatn and Bromley write: ‘Commitment and moral judgements are concepts often attached to those domains where life, quality of life, and personal integrity are at stake. These are areas where social norms restrict or reject the commodity fiction’ (Vatn and Bromley 1994: 135). Recently, some empirical evidence has been collected on the extent to which respondents in contingent valuation studies show lexicographic preferences.9 Stevens et al. (1991: 398) concluded that, when valuing wildlife, a significant proportion of respondents gave answers either consistent with lexicographic preference orderings or inconsistent with both neoclassical and lexicographic models of behaviour. Spash and Hanley (1995) find – depending on the base line and definition of lexicographic preferences – a large proportion of respondents (about one quarter) exhibiting rights-based beliefs on which lexicographic preferences may be founded. In contrast, Lockwood (1998: 79), constructing preference maps, shows that only a small percentage of participants had lexicographic preferences.10

28 Michael Getzner The institutional context of CVM surveys Hypothetical bias is considered as a major threat to the reliability and validity of the concept of stated preferences in constructed hypothetical markets in which respondents are invited to express their values for different states of the environment (see recent reviews of Schulze et al. 1996: 97ff.; Jakobsson and Dragun 1996: 84ff.; Getzner 2000). However, there is mixed evidence on the question to what extent people behave differently in hypothetical situations compared with real economic commitments. Critics argue that even if referenda are made as realistic as possible (e.g. by conservative wording of the questionnaire or incentive-compatible auction designs), ‘there does not appear to be a close substitute for The Real Thing’ (Cummings et al. 1995a; see also the discussion in Blackburn et al. 1994, who deliver methods for ‘correcting’ results from surveys to account for hypothetical bias if the distribution of error due to the bias is systematic). Cummings et al. (1995b) and Harrison (1996) report a number of approaches to reduce the hypothetical bias in CVM surveys by directly addressing this problem in the entire survey situation. They designed experiments that compared a real referendum involving subjects making real economic commitments with two hypothetical referenda in which hypothetical bias was taken into account by presenting adequate information on hypothetical bias to respondents. They called their experiments ‘light cheap talk’ and ‘heavy cheap talk’ which presented information to respondents in various densities, e.g. by presenting written and oral text as well as charts (‘cheap talk’ refers to additional information which can be provided to respondents without high cost and effort). The aim of including cheap talk information in the survey situation is to make respondents directly aware of the hypothetical situation in which they act and in which the whole valuation procedures takes place. Cummings et al. (1995b) report that – compared with a ‘normal’ CVM questionnaire without any additional information on the possible hypothetical bias of such surveys – cheap talk can reduce WTP (thus hypothetical bias) by 21 per cent compared with a reduction of WTP of 23 per cent in an actual (real) referendum. They conclude that ‘there exists one set of words which will result in a hypothetical survey generating the same results as a comparable survey eliciting real economic commitments’ (Cummings et al. 1995b: 13). These results indicate that the embedding of CVM questions in a realistic context is crucial to the reliability of CVM results. In the empirical part of this chapter (next section), the possible differences of a ‘cheap talk’ sample compared with an ordinary sample are statistically explored (Harrison 1996). As Boulding (1969: 3) noted a while ago, economics as a science tries to obtain knowledge about a system by changing its inputs and outputs of information, but these inputs and outputs will change the system itself, and under some circumstances they may change it radically. […] [The] generalised Heisenberg principle predominates because knowledge of the social sciences is an essential part of the social sciences itself. […] As science develops it no longer merely investigates the world; it creates the world which it is investigating.

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Boulding clearly makes this point when he describes the epistemological problems arising out of a science that examines those facts entirely produced by it. In our context, respondents in a CVM survey might never have thought about valuing natural goods in a monetary way. Economics in this sense extends the fields of research to social relations that have not been considered as economically significant by those being asked a valuation question. CVM questions may produce values which were not formed before or which the respondent was not aware of. Such questions might thus provide incentives for formulating preferences rather than merely eliciting existing and stable preferences that were formed in the past. Applying Boulding’s critical comments on CVM surveys, one may feel curious about the attempts to elicit ‘home-grown values’ in CVM surveys. It is often assumed that respondents a priori have ‘home-grown values’ for biodiversity in a monetary form. It can be doubted whether respondents taking part in a CVM survey have generally ever thought about valuing biodiversity in a monetary form (Bishop et al. 1983). Respondents therefore construct their value statements during the CVM interview (Goodman et al. 1999). The very form of valuation questions – which are worded by the researcher with the theory of Homo oeconomicus in the background – pushes respondents into a certain role (see next section). These theoretical problems have often been addressed. For instance, in the context of strategic behaviour which has been considered as crucial for valuing public goods due to the supposed free-rider behaviour, it turns out that many assumptions made by economists and expressed by valuation questions do not meet respondents’ actual attitudes, perceptions and behaviour (see e.g. Burgess et al. 1998; Marwell and Ames 1981). There are a number of attempts to overcome possibly serious problems with value construction in CVM surveys. Lazo et al. (1992) present a methodology for CVM questionnaires in order to design a shortened version, which can efficiently be administered to a large sample without loss of information. Thus, value construction is not considered as a major problem of the CVM methodology by some researchers but something that needs to be taken into account when designing surveys (McDaniels and Roessler 1998). In the case of CVM surveys eliciting monetary values for natural goods like biodiversity, it is of great interest to determine to what extent respondents are used to, and influenced by, such questions. Besides the fact that some respondents merely dislike valuation questions, the empirical results presented below concentrate on the influence of CVM questions (surveys) on respondents’ perceptions of natural goods as goods to be further protected. If the influence of the valuation question and information presented is overwhelming (e.g. if reality is solely constructed in the valuation process), this can nevertheless be a major problem for CVM studies (see discussions in Hanley et al. 1995; Holm-Müller et al. 1991; Bishop and Welsh 1992). Closely related to the epistemological questions dealt with above, one can be curious if economists or economics students are ‘different’, i.e. if they perceive valuation questions in ways different to those of the general public, or if they express more or less solidarity or altruism than students of other disciplines (see the discussion in the Journal of Economic Perspectives, starting with Carter and Irons

30 Michael Getzner 1991). In the study described in this chapter, economics students and students of other disciplines are compared in order to examine the influence of studying economics (and business administration) on the amount of WTP bids. Eventual differences are taken as an auxiliary measure for the possibly influential effect of learning the economic view. The social context: ‘consumer’ vs. ‘citizen’ As mentioned above, lexicographic preferences can constitute an important argument when it comes to a monetary valuation of natural goods like biodiversity. One reason for such preferences may lie in the individual view that there is only one ‘right’ or ‘wrong’. However, the divergence between two roles individuals play when valuing public goods is more a social than an individualistic argument. The utilitarian viewpoint that – in the case of biodiversity – the result of an action is the adequate measure might be weakened by the social context11 in which such a valuation takes place (see below). The social role individuals play when asked for their WTP refers to their role as ‘consumer’ exchanging consumption for a higher environmental quality. The hypothesis put forward here is that when deciding the appropriate amounts of public goods (like biodiversity), individuals adopt a different social role, namely the one of a ‘citizen’. In other words, it is hypothesized that private households (respondents in a survey) act differently in the realm of the market than in a situation where societal affairs (e.g. public goods) are at stake (one of the first authors trying to clarify this argument was Sagoff 1988).12 That does not mean that economic considerations are completely left out in societal decisions. Such behaviour of respondents as ‘citizens’ might not meet Becker’s claim that ‘all human behaviour can be viewed as involving participants who maximize their utility from a stable set of preferences and accumulate an optimal amount of information’ (Becker 1976: 14). If we take Becker’s statement, it can be considered as being tautological. There is, of course, no human behaviour that is not maximizing the individual’s utility as defined by neoclassical theory. Even suicide can be thought of being the ‘best’ alternative for the person committing suicide. Altruism can also fit perfectly into the model of economic behaviour as one’s utility increases when another individual’s utility increases (for a critical view and arguments for a multiple-utility conception, see Etzioni 1986). Furthermore, rational behaviour can be considered as a constituting element of humans. However, it is the opinion of the author that such argumentation does not contribute very much to the understanding of economic and social behaviour. Economic reasoning and rationality might play an important role in nearly all decisions, be they ‘private’ or ‘public’, ‘individualistic/egoistic’ or ‘altruistic’. Economic arguments are often only implicit in individual decisions. It is the task of economics to clarify those preferences particularly in the context of environmental valuation. It is not put forward here that ‘altruistic citizens’ do not behave rationally (they can be thought of having a societal goal that should be achieved with least cost). It is the author’s understanding that discussing different approaches or explanations can be more fruitful than trying

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to find a common theory to all kinds of human behaviour.13 The main argument of the dichotomy is that ‘citizens’ do not maximize their individual utility in a narrow sense (seeking personal advantages) but include broader societal arguments in their decision (see also Frey 1997).14 Besides different roles of respondents, some problems with respondents’ role differences might also be attributable to limited abilities to process information (‘bounded rationality’; Conlisk 1996). Bounded rationality in the sense discussed here could explain why respondents do not answer WTP questions in a way that would maximize their individual utility. Answers or behaviour departing from the individual utility maximization assumption can nevertheless be rational to the extent that citizens answer differently compared with consumers given a different context and different points of view and reference. Schkade and Payne (1994) offer an interesting focus on the social context. They let respondents ‘think aloud’ when making their WTP statement. Respondents primarily considered their ability to pay, referring to the respondent’s economic situation or to the payment vehicle. Some additional considerations can be interpreted as including elements of respondents acting as citizens, but no connection has been made to the sole benefits of society or its future development.15 Some evidence from psychological research stresses the argument that CVM questions mainly focus on the consumer role of the respondent. Surveys might include a tendency ‘to emphasize hedonic (self-interest) rather than social values by asking respondents for their personal opinions’ (Fischhoff 1991: 843). ‘If one wants to predict how people will behave in situations presenting a particular perspective, then one should elicit their values in ways evoking that perspective’ (Fischhoff 1991: 843). Boyce et al. (1992: 1367) make a similar argument, when they write that ‘WTP only measures intrinsic value to the extent that consumers accept moral responsibility in a WTP context’ (emphasis added). A number of publications appearing since Sagoff ’s book have discussed this issue from several viewpoints. Bingham et al. (1995: 76) argue that it is important ‘to understand the various roles that individuals play and how these roles affect the notion of “valuing” something. … [Individuals] value ecosystems differently when expressing personal values and when serving in some advisory or decisionmaking role for a public institution. People also reason differently when acting as decision makers or advisors … than they do as private agents’ (also Blamey 1996; Kosz 1997; Cameron 1997; Stevens et al. 1994; Common et al. 1993; Fischhoff and Furby 1988; Common and Perrings 1992). The central point of the divergence between the social roles individuals take is that contingent valuation is a concept, which derives out of a (normative) political theory founded on a distinct model of private choice in markets. As Jacobs (1997: 213f.) puts it: ‘Using these valuation institutions is essentially to treat choices about public goods as if they were choices about private ones. … The principal difference concerns the frame of reference people employ when making choices about public goods. … They are seen as having value to society over and above the value they give to individuals.’ It is this distinctive framework, which might not be appropriate because in reality decisions about environmental quality are indeed made by

32 Michael Getzner individuals (in elections or referenda within a democratic process; Bingham et al. 1995: 77). This argument additionally involves the idea that not only the mere outcome of a decision regarding societal problems matters but also how these results are achieved. In this sense, environmental valuation via CVM is – besides the utilitarian foundations – based on a teleological view of decision-making. Public goods require public discourse (the discourse ethics approach proposed by O’Hara 1996). It can be very important for those affected by a public project to learn how a decision is being made.16 There is some recent literature on procedural rationality. Citizens might in the first instance not be interested in the result of a public decision as such, but rather concentrate on the process of public decision making (e.g. Toman 1999; Holland 1997; Burgess et al. 1998; O’Hara 1996; Getzner 1999).

Empirical results17 Explaining WTP-bids: incorporating the social context The empirical models presented below are a logit model explaining respondent’s principal WTP, and a regression model on the respondents’ WTP amounts estimated by OLS. Both include several dummy variables to take context variables (see Figure 2.1) into account. Thus the model does not merely consider the usual socio-economic variables, but is extended by additional individual factors and by the institutional and social context. The models estimated can be described in analytical terms as Pr (WTPi > 0 ) = f (Si , Pi , I i , Ci ) and WTPi = f (Si , Pi , I i , Ci ),

(3.1a) (3.1b)

where Pr(WTPi > 0) is the probability that respondent i exhibits some positive WTP. WTPi refers to respondent i’s WTP bid (in Austrian schillings). Four groups of variables are included in the analysis. The first group S describes the socio-economic characteristics of respondent i (e.g. income, gender, age, job); P denotes respondent i ’s preferences and behaviour regarding natural goods in general (e.g. knowledge concerning biodiversity, donations to environmental organizations, memberships). I is a set of institutional context variables, which describe not only ‘objective’ arguments (e.g. whether hypothetical bias has been explicitly mentioned in the survey by ‘cheap talk’) but also respondent’s beliefs about the CVM setting. Finally, C comprises arguments regarding ‘subjective’ perceptions and citizen’s values about the social context of the survey. These variables include the respondent’s opinions about the outcome of the referendum and the consumer–citizen dichotomy. The WTP function increases or decreases in arguments18 (for a complete list of variables, see Table 2.3).

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33

Design of the survey The survey for testing the relevance of extending the ‘standard’ valuation model took place in December 1997 and January 1998 at the University of Klagenfurt (Austria). Subjects were mainly undergraduate students of business administration as well as sociology, English and French language. The surveys were held in the classes; about 20 to 25 minutes were necessary to complete the questionnaire (sample size 189). The ‘design guidelines’ of Arrow et al. (1993) regarding the appropriate design and setting of the CVM survey were followed as closely as possible. After a number of pre-tests (in classes and with focus groups), the survey was finally structured as follows. After filling out a number of questions regarding socio-economic variables (age, gender, studies/courses enrolled, income, children), a set of indicators dealt with the respondent’s attitudes towards the environment (membership of environmental organizations, preferred activities in recreational areas, e.g. sports) and with their knowledge of and familiarity with the concept of biodiversity (using open-ended as well as closed questions). After these introductory ‘warming-up’ questions, the sample was divided into two groups: one group went straight on answering the following valuation questions without any further explanation from the instructor. The other group was asked to take a short break and listen to the instructor’s short presentation of the problems associated with the hypothetical bias of such CVM surveys. The next set of questions asked for the respondent’s WTP for a nature protection programme in Carinthia.19 These open-ended questions were worded as conservatively as possible,20 including references to the respondent’s budget constraint. The payment vehicle was an earmarked contribution to a nature protection fund. The payment motives as well as reasons for protest or zero bids were asked for. Additionally, a question on the respondent’s vote on a public referendum regarding the introduction of an earmarked nature protection tax in Carinthia was included. A final set of questions tried to reveal respondents’ attitudes comprising the ‘extended’ WTP model, asking for lexicographic preferences as well as the abovediscussed distinction between social role and epistemological questions (results for the most important questions of these survey sections, including the wording of the questions, are presented below). Descriptive overview of the empirical results The first questions dealt with respondents’ familiarity with the concept of biodiversity. It is often asserted in the literature that respondents should be familiar with and informed about the good to be valued (Mitchell and Carson 1989). It turned out that the vast majority of respondents had never heard about the concept of biodiversity. Over 75 per cent of respondents had never heard of this concept, only 5 per cent of respondents were at least familiar with it.21 Many interpreted the word ‘biodiversity’ in open-ended questions in the correct sense, meaning

34 Michael Getzner diversity of species and ecosystems.22 However, the meaning of ‘biodiversity’ was explained thereafter in the questionnaire. Quite a large number of respondents were in principle prepared to contribute to a Carinthian nature protection programme securing the survival of certain species and ecosystems (written information on the content of this programme was provided in the survey). Out of 189 respondents, 148 (78.3 per cent) were willing to pay a personal contribution in the form of an earmarked tax that would flow into a fund solely committed to financing the programme (16 per cent of those refusing to pay rejected the entire valuation question). Interestingly, 62.4 per cent of all respondents stated that such a programme should not merely be financed out of public budgets, but also by private contributions. Those who refused to pay mainly thought that inefficiencies in the public sector (e.g. bureaucracy) should first be cut significantly before citizens should contribute with personal donations. Respondents’ mean WTP bids in the survey amounted to 509 ATS (Austrian schillings) per person as an annual contribution to the above-mentioned fund providing financial resources for implementing the Carinthian nature protection programme. The payment is limited to a time span of 5 years (this is the time span when the implementation costs of the whole programme have to be financed). The standard deviation was 964 ATS, and the median was 250 ATS (all numbers were calculated without truncation as some of the high bids proved to be ‘reasonable’ in the sense that respondents bidding so high indeed had the purchasing power to do so). Respondents’ main motive to state a WTP was the existence motive which has been described as comprising a rights-based protection motive in the questionnaire. A share of 47.3 per cent of respondents marked the existence motive as the main motive to state a WTP; 45.9 per cent voted for the bequest motive, the rest thought about the option value of natural resources. A majority of respondents (about 60 per cent) would vote for a (mandatory) Carinthian nature protection tax amounting to 160 ATS, which is lower than the open-ended mean and median WTP elicited in prior questions. Forty per cent of respondents would vote against the proposition. Furthermore, 32.5 per cent of respondents thought that their WTP might lie above the sample mean, while 67 per cent were of the opinion that their WTP was at or below the average (a similar question regarding the median was left out of the questionnaire due to space restrictions). A large proportion, 66 per cent of respondents, showed motives that can be interpreted as being altruistic. They would donate a personal contribution to the Carinthian nature protection programme regardless of the outcome of the referendum; only 7.5 per cent would donate nothing, 5.7 per cent would lower their original donation, and around 20 per cent would await the forming of a new majority. That means that a majority of respondents would be willing to contribute to a nature protection fund even if not forced to do so. Students as subjects seem to be a group where nature and in particular species protection is a high priority. Regarding lexicographic preferences, nearly all

A framework for valuing nature

35

respondents stated that species should be protected regardless of the cost of protection; apparently they hold rights-based beliefs, as the wording of the questions and the appropriate answers could suggest (around 94 per cent of respondents believed that species should be protected regardless of the economic costs associated with it). The wording of this question is consistent with other surveys (e.g. Stevens et al. 1991; Spash and Hanley 1995). Unfortunately, this question could not discriminate between groups of respondents (that circumstance did not show up in the pre-tests). The consumer–citizen differences in respondents’ roles were explored in a simple setting similar to Sagoff ’s (1988) historic example. Respondents were simply asked for their preferences regarding skiing in the Nockberge national park, which is an important regional natural area of about 18,500 hectares. The national park lies 50 kilometres to the north-west of Klagenfurt (the capital city of Carinthia) near the Hohe Tauern national park. While one-quarter of respondents would like to go skiing in the ‘Nockberge’ national park, about 95 per cent of all respondents would vote for the protection of the national park in a referendum (see Table 2.1). Only two respondents would not go skiing there, but would vote for a ski resort in the Nockberge. A number of epistemological questions were raised in the survey. Only 32 per cent of respondents stated that they were not influenced by the survey and the specific CVM questions, while nearly two-thirds of the respondents had not thought about their WTP before answering the survey questions. Fourteen per cent were explicitly influenced by the ‘cost–benefit’ approach, and again about 7 per cent rejected that kind of questioning (see Table 2.2). Explaining WTP bids: the importance of the ‘extended’ valuation framework The estimated equations for explaining respondent’s WTP on the basis of the explanatory variables (for a detailed description, see Table 2.3) are presented for the logit model in Table 2.4 and for the OLS regression model in Table 2.5. Generally, all included variables have the expected signs (e.g. higher income, knowledge or a positive vote in a public referendum all increase the respondent’s acceptance of a personal contribution and the WTP bid). Regarding the different variables, the respondent’s WTP should increase with higher income, education and knowledge about biodiversity. Furthermore, it is expected that members of an environmental organization are, ceteris paribus, willing to pay more while those opposing the question format exhibit a lower WTP. Those with a probably positive vote in a public referendum regarding a nature protection tax should again be willing to pay more – like those willing to pay a voluntary contribution, even if they would be in a minority in a respective referendum. These expectations regarding the direction of the influence of the variables are generally satisfied with the models estimated. The respondent’s principal WTP is estimated with a logit model. The dependent variable is WTP1 (=1, if respondent in principle is willing to contribute some

36 Michael Getzner Table 2.1 Consumer vs. citizen and students’ perspectives Respondent as consumer ‘The Nockberge national park is not (yet) an internationally acknowledged national park, but is protected by provincial law. Let us assume that the Nockberge would be changed into an attractive and also reasonably priced ski and recreation resort with numerous lifts and sports facilities, and the protection of nature would be abandoned. Would you personally like to go skiing in the Nockberge national park or enjoy other attractive sports and recreation facilities?’

No Yes Total

Frequency

Per cent

138 51 189

73.02 26.98 100.00

Respondent as citizen ‘Regardless of your personal possibilities or wishes to use the Nockberge national park for your sports and recreation enjoyment: would you as a citizen taking all arguments into account vote in a referendum for the use of the Nockberge as an attractive ski resort, or do you think that the Nockberge should in all cases remain a national park?’ Frequency I think that the national park should strictly be protected regardless of the economic benefits of a ski resort. I would vote for the ski resort because of the economic benefits. Sum Missing/no answer Sum

Per cent

178

94.18

7 185 4 189

3.70 97.88 2.12 100.00

Note: All questions are translated from the original German questionnaire.

amount). Explaining the respondent’s yes-vote is done stepwise. Four different models are estimated to show the influence of several extensions to the ‘standard’ WTP model, which is shown in the first two columns in Table 2.4. In the ‘standard model’, the explanatory variables ‘Age’, ‘Economics’, ‘Biodiversity’, ‘Member’, ‘Donations’ and ‘Recreation’ have a significant influence on the respondent’s accepting a personal contribution to a nature protection fund. The log-likelihood of the model is –64.18 with a corresponding McFadden’s R² of about 26 per cent (which is well above the usually applied thresholds for CVM survey validity). About 85 per cent of the answers can be correctly predicted. If the model is extended to account for an individual’s beliefs about the CVM setting, the variables ‘Protest’ and ‘Influence’ are additionally significant in explaining the respondent’s WTP. While the coefficients of the other explanatory variables stay roughly in the same order of magnitude, these additional (‘epistemological’) variables improve the explanatory power of the model (McFadden’s R²) to 34 per cent. Extending the model even further to account for the social context, variables ‘Referendum’ and ‘Public’ turn out to be significantly correlated with WTP1,

A framework for valuing nature

37

Table 2.2 Epistemological problems of WTP surveys ‘Surveys asking respondents about their personal willingness to pay for environmental improvements are relatively rare. Answering the questions and this specific kind of questioning is perceived by some as strange or is rejected. Which of the following statements would you agree to?’ [Multiple answers] Frequency This sort of questioning has neither influenced me personally nor my opinions about natural protection. Before this survey, I had not thought about my willingness to pay for a nature protection programme. This kind of question has influenced me. I will in the future pay more attention to whether nature protection yields economic benefits compared to the costs. I reject these kinds of questions on the willingness to pay for nature protection, because species protection cannot be valued in monetary terms. N

Respondents (%)

61

32.28

124

65.61

26

13.76

14 189

7.41

leading to an R² of 42 per cent. Finally, the inclusion of the variable ‘Con_cit’ only marginally improves the quality of the model. About 87 per cent of all answers can correctly be predicted. After having explained the respondent’s principal WTP, the second part of the ‘nested’ model was estimated by OLS. Extending the valuation framework to explain the respondent’s WTP bids by means of a simple OLS regression model improves the model, too. As Table 2.5 shows, the usually significant socio-economic variables in regression models are significant in this estimation as well. Most influential are ‘Income’ and ‘Children’, and (interestingly) ‘Gender’. Some expectedly influential variables regarding environmental behaviour and environmental consciousness also play a significant role in explaining the respondent’s WTP bid. Variables describing the institutional and social context in which decisions on nature protection programmes are made are of crucial importance. A highly significant explanatory power is revealed by those variables that show the respondent’s decisions (behaviour) in public referenda as well as their willingness to donate a personal contribution even if they are in a minority position. That means that the higher the supposedly altruistic motives operationalized with this concept, the higher the respondent’s WTP bid is. Beginning with the usual socio-economic characteristics of respondents, variables ‘Income’, ‘Gender’, ‘Biodiversity’, ‘Member’, and ‘Recreation’ play a significant role. The explanatory power of the OLS model for the respondent’s WTP bids is 19 per cent. If we include institutional context variables (respondent’s perception of the CVM setting), about 24 per cent of the variance of the dependent

38 Michael Getzner Table 2.3 WTP regression model variables Variable name

Dimension

Description

Dependent variable WTP1 WTP2

1=yes

Principal WTP for nature protection programme in Carinthia ATS (natural WTP including zero bids log)

Individual factors: socio-economic variables Income Profession Age Gender Children Economics

in 1,000 ATS (natural log) 1=yes in years 1=female 1=yes 1=yes

Income of respondent At least in part-time employment Age of respondent Gender of respondent Has children or children in the household Studies business admin. and has introductory economics

Individual factors: environmental consciousness and behaviour Biodiversity Member Donations Recreation

1=yes 1=yes ATS (natural log) 1=yes

Partially familiar with the concept of biodiversity Member of an environmental organisation Monthly average donation to environmental groups Likes recreation in the open countryside

Institutional context Protest Influence Thoughts

1=yes 1=yes 1=yes

Cheap

1=yes

Explicitly disliked questions valuing natural goods Admits influence by the kind of valuation question Never thought about economic valuations of biodiversity before The valuation question was framed by verbal explanations regarding hypothetical bias (‘cheap talk’)

Social context Majority

1=yes

Minority 1=yes Referendum 1=yes Average Public

1=yes 1=yes

Con_cit

1=yes

Thinks that the majority of citizens would vote for the introduction of a nature protection tax in Carinthia WTP regardless of the outcome of the referendum Votes yes for the introduction of nature protection tax in Carinthia Believes contribution is above the average Believes that nature protection programmes should be financed by public budget Respondent exhibited different preferences as consumer and citizen (questions as in Table 2.1)

–3.8269 3.3227 0.5326 0.4344 –0.1196 0.5024 –0.0680 0.0401 –0.0929 0.5381 0.0970 0.5960 0.8620 0.5311 1.5275 0.7147 2.3797 1.1823 0.4708 0.2740 1.6453 0.4952

Constant

Influence

Protest

Recreation

Donations

Member

Biodiversity

Economics

Children

Gender

Age

Profession

Income

Coefficient Std. Error

Variables

–2.6699

3.3224***

1.7181*

2.0127**

2.1372**

1.6232(*)

0.1627

–0.1727

–1.6955*

–0.2380

1.2260

–1.1517

z-Statistic

Model 1

–2.0176**

–2.7654

3.1943***

1.4663

2.4445**

2.3544**

1.6698*

–0.1963

–0.4931

–0.5187

–0.7505

0.8216

–0.9982

z-Statistic

Model 2

–3.6743 3.6810 0.3908 0.4756 –0.4198 0.5594 –0.0245 0.0473 –0.2845 0.5770 –0.1270 0.6469 0.9594 0.5746 1.9659 0.8350 3.2502 1.3296 0.3961 0.2702 1.7444 0.5461 –2.0462** 1.3048 –1.3761 0.6820

Coefficient Std. Error

Table 2.4 Logit model estimated coefficients for WTP1

–2.4258 3.8487 0.1895 0.5030 –0.2037 0.5813 –0.0201 0.0495 –0.2645 0.6113 –0.3359 0.6659 1.1795 0.6160 1.7591 0.8788 3.0327 1.2793 0.3627 0.2753 1.8223 0.5632 –1.9380* 1.4270 –1.6679 0.7135

Coefficient Std. Error

–2.3378**

–2.8254

3.2355***

1.3175

2.3707**

2.0018**

1.9147*

–0.5044

–0.4327

–0.4056

–0.3503

0.3767

–0.6303

z–Statistic

Model 3

–1.9814 4.4592 0.1995 0.5919 0.0570 0.6661 –0.0117 0.0557 –0.7243 0.6998 –0.3869 0.7891 1.1912 0.7324 2.2522 1.1446 3.0285 1.3305 0.3136 0.2854 1.9002 0.6899 –1.7794* 1.5878 –2.3451 0.8160

Coefficient Std. Error

continued …

–2.8739***

2.7542***

1.0986

2.2762**

1.9677**

1.6263(*)

–0.4902

–1.0350

–0.2095

0.0856

0.3371

–0.4443

z–Statistic

Model 4

A framework for valuing nature 39

–3.8269

Constant Thoughts

Notes *** p<0.01 ** p<0.05 * p<0.1 (*) 0.1<=p<0.12

n 171 df 10 S.E. of regr. 0.3509 Log likelihood –64.1778 McFadden R² 25.95%

Con_cit

Public

Referendum

Coefficient Std. Error

Variables

Table 2.4 Continued

–1.1517 0.7090

z-Statistic

Model 1

171 13 0.3353 –57.2930 33.89%

–3.6743 1.3168 0.5384

Coefficient Std. Error –0.9982 0.2858

z-Statistic

Model 2

170 14 0.3248 –53.8363 36.71%

–2.4258 0.4951 0.5772 1.0153 0.5215

Coefficient Std. Error

–1.3579

1.9468*

–0.6303 0.6531

z–Statistic

Model 3

–1.9814 0.9298 0.7024 1.0553 0.6120 –2.2454** 0.6047 –0.8726 0.7042 159 16 0.3067 –43.2056 44.92%

Coefficient Std. Error

–1.2391

1.7244*

–0.4443

z–Statistic

Model 4

40 Michael Getzner

–0.8344 2.5186 0.5458 0.3381 0.3333 0.4019 –0.0486 0.0346 –0.7283 0.4102 0.7330 0.4918 0.4958 0.4345 1.5229 0.4472 1.3432 0.5385 0.1766 0.1166 1.1439 0.4287

Constant

Influence

Protest

Recreation

Donations

Member

Biodiversity

Economics

Children

Gender

Age

Profession

Income

Coefficient Std. Error

Variables

–1.4219

2.6680***

1.5144

2.4941**

3.4049***

1.1410

1.4903

–1.7754*

–1.4058

0.8294

1.6144(*)

–0.3313

t-Statistic

Model 1

–2.4679 2.6356 0.6477 0.3410 0.2783 0.3927 –0.0444 0.0351 –0.7238 0.3988 0.7270 0.4852 0.5573 0.4251 1.5703 0.4383 1.6912 0.5349 0.1210 0.1158 1.1361 0.4212 –1.7735* 0.8018 –0.6708 0.5282

Coefficient Std. Error

–1.2698

–1.3956

2.6972***

1.0451

3.1619***

3.5827***

1.3111

1.4984

–1.8147*

–1.2650

0.7088

1.8992*

–0.9364

t-Statistic

Model 2

Table 2.5 Log-normal OLS estimated coefficients for WTP2

1.1999 1.9869 0.2054 0.2637 –0.0667 0.2949 –0.0259 0.0280 –0.5672 0.3025 0.7278 0.3730 0.2805 0.3306 0.4179 0.3379 0.7102 0.4182 0.0520 0.0851 0.8460 0.3212 –1.8278* 0.7635 0.2236 0.4206

Coefficient Std. Error

0.5317

–1.6480

2.6339***

0.6108

1.6980*

1.2368

0.8485

1.9513*

–1.8753*

–0.9231

–0.2264

0.7789

0.6039

t-Statistic

Model 3

2.3239 2.0407 0.0233 0.2655 0.0463 0.2991 0.0023 0.0280 –0.5906 0.2955 0.8268 0.3692 0.4593 0.3363 0.4625 0.3312 0.7955 0.4129 0.0059 0.0821 0.7025 0.3288 –2.2465** 0.7336 0.2430 0.4127

Coefficient Std. Error

continued …

0.5889

2.1364**

0.0721

1.9267*

1.3963

1.3659

2.2392**

–1.9984**

0.0836

0.1548

0.0877

1.1388

t-Statistic

Model 4

A framework for valuing nature 41

172 10 19.11% 2.3338 5.0410***

Coefficient Std. Error

0.5516

t-Statistic

Model 1

172 14 23.79% 2.2654 4.8131***

1.3532 0.4076 0.8214 0.3653

Coefficient Std. Error

0.3139

2.2484**

–0.0500

t-Statistic

Model 2

144 18 39.04% 1.5449 6.0877***

1.1957 0.2989 0.8607 0.3099 1.1955 0.3254

–0.1547 0.3232 0.6309 0.2750 –0.0621

Coefficient Std. Error

–1.1655

3.6743***

2.7771***

–0.1979 0.3150 4.0001***

2.2944**

0.3301

t-Statistic

Model 3

***p<0.01 **p<0.05 *p<0.1 (*)0.1<=p<0.12 a Results of Tobit estimation are available on request; however, the significance of variables stays roughly the same.

Notes

n df Adj. R² S.E. of regr. F–statistic

Con_cit

Public

Average

Referendum

Minority

Majority

Cheap

Thoughts

Variables

Table 2.5 Continued

1.2641 0.3014 0.7873 0.3099 0.9334 0.3355 –3.6273*** 0.3213 –0.5637 0.3137 135 20 45.20% 1.464 6.5255***

0.9629 0.3428 0.5194 0.2786 0.1655

Coefficient Std. Error

–1.7969*

2.7823***

2.5404**

4.1934***

0.5252

1.8641*

t-Statistic

Model 4

42 Michael Getzner

A framework for valuing nature

43

variable can be explained. Variables ‘Protest’ and ‘Cheap’ are additionally significant. Extending the model even further to include individual beliefs about the social context, variables ‘Minority’, ‘Referendum’, and ‘Average’ increase the power of the model to 39 per cent. If we try to account for the consumer–citizen dichotomy (‘Con_cit’) and beliefs about the appropriate financing mechanism of public goods (‘Public’), an explanation of 45 per cent of the variance can be achieved. The high explanatory power of the model shows that not only are the usual individual characteristics of respondents as individuals and consumers crucially influential, but knowing about respondents’ attitudes and behaviour in the institutional and social context improves the quality of the model and adds much explanatory power to give a richer picture of the framework in which respondents decide upon their contribution to a regional biodiversity programme.

Discussion and conclusions Criticism of the CVM is as old as the method itself, and its attackers come from a number of different corners. One major strand of critical work focuses on the assumption of welfare economics and CBA, which holds that individual costs and benefits can be aggregated in a way to judge the economic reasonability of a project or policy on the level of society. However, society, as the term suggests, comprises more than the narrow economic (or market-based) context. Ultimately, the institutional and social context is manifest in individual perceptions, attitudes, beliefs and behaviour. Ethical commitments and rights-based beliefs towards other species constitute problems with the narrow economic notion of efficiency and the concept of contingent valuation and CBA, as individuals might not be willing to make the usual trade-offs between income (or consumer goods) and biodiversity. These so-called lexicographic preferences are more ‘individualistic’ than the much-discussed divergence between social role as consumers and citizens. The latter dichotomy refers to a broader model of human behaviour taking not only individual utility maximization into account, but also referring to social values held by individuals. However, epistemological problems with the assumption of the Homo oeconomicus and the consequent use of methods appropriate to a narrow economic theory rather than methods appropriate to more broader approaches targeted at the perception and behaviour of individuals in an environmental context, threaten the validity of CVM-based valuation. There has been much controversy over these topics in the literature; but numerical or statistical analysis is rather rare compared with more qualitative or explorative approaches. In this chapter, empirical evidence is presented on the extent and importance of some of the most crucial elements of the institutional and social context in which the valuation of regional biodiversity takes place. While the sample chosen for the survey is not representative for the whole population, it can be assumed that the significant variables found in regression models will in principle also prove influential for the whole population.

44 Michael Getzner A large proportion of respondents exhibited lexicographic preferences, and the results of the survey suggest that the consumer–citizen difference in perceiving a context-inherent question is also relevant. Although these two crucial elements of the valuation procedure are of great importance, some of the theoretical considerations regarding the amount of WTP bids cannot be proven empirically. Theory would suggest that – due to the priority of biodiversity in the case of lexicographic preferences – WTP bids could be zero or infinite. The WTP bids in this study are quite reasonable in the sense that the respondents considered their budget constraint when stating a WTP bid. One possible explanation could be that respondents want their preferences to be respected in the decision process. They take those instruments offered to them, and a monetary expression of their preferences is a way to influence the outcome even if they distrust CVM-based research. Respondents answered a number of epistemological questions. A majority of respondents was not used to answering such valuation questions, and thought about it for the first time when dealing with the questionnaire. Variables comprising these elements of instrument-based influence were statistically significant in explaining WTP bids in the regression model. WTP bids are influenced by respondents’ perception about the CVM instrument as well as the framing of the WTP question. Variables encoding the respondents’ perceptions about the outcome of a similar referendum additionally exhibited significant influence (supposedly altruistic motives). It seems that respondents who would vote publicly for a nature protection tax are prepared to state higher private WTP bids. Furthermore, the perception of one stating higher WTP bids as well as the WTP in a situation when a general nature tax is not approved contribute significantly to the respondent’s WTP amount. The social (and political) context of decisions thus turns out to be crucially important in explaining respondents’ WTP bids. Beliefs about the respondent’s behaviour in a minority position as well as supposedly altruistic motives influence the respondent’s answers in a CVM survey.23 The empirical results indicate that, besides socio-economic variables, the institutional and social context in which respondents answer valuation questions can be of crucial importance. The explanatory power of the WTP bid models improves as more context variables are entered into the equation. Respondents of CVM surveys behave more like citizens in a political and societal debate – with their personal beliefs and perceptions of the institutional and social context of the valuation decision – rather than fulfilling the economic model of pure exchange by trading money vs. natural goods. CVM surveys without reference to institutional and social context variables thus may lack important arguments in explaining respondents’ WTP bids because environmental decisions apparently are more political than economic because they include morality (rights-based beliefs) and community rather than individual consumer interests. As a final conclusion regarding the use of contingent valuation results, it seems that contingent valuation exhibits economic values useful for evaluating policy programmes. However, environmental policy decisions cannot be based solely on

A framework for valuing nature

45

such results, as the valuation of environmental goods regularly includes a broad range of different values, perceptions and assumptions. CVM results might be an important element of decision making from an economic perspective (e.g. Carson 2000). Multi-criteria valuation frameworks and participatory decision processes may thus account for such elements and integrate them in a broader and more inclusive decision-making framework.

Acknowledgements The author would like to thank all participating students of the University of Klagenfurt as well as the instructors of those courses who ‘donated’ 25 minutes of their course time. Particular thanks go to G. Haber, W. Hediger, S. Niemeyer, M. Riedel and N. Wohlgemuth for commenting on earlier drafts of this chapter. The author accepts the responsibility for all remaining errors.

Notes 1 Based on the recommendation of Arrow et al. (1993), the concept of respondents’ WTP is used. However, many results of this chapter might also be transferred to respondents’ willingness to accept. 2 The ‘standard’ model referred to in this chapter is a sketch of the usually applied approach to explain the respondent’s WTP (see also the theory of reasoned action by Fishbein and Ajzen 1975). 3 The term ‘institutional’ is taken from the auction literature where the ‘institution’ refers to the elicitation instrument and auction setup. 4 The concept of biodiversity has become ‘popular’, particularly after the United Nations Conference on Environment and Development in Rio de Janeiro (1992) which produced a convention on the protection of biodiversity and biological resources. This convention defines biodiversity in natural science terms as the diversity within species (genetic diversity), species diversity (number of different species living in an ecosystem), as well as ecosystem and landscape diversity (different ecosystems and their protection). 5 Diversity is a characteristic of a species as well as of an ecosystem. Thus, valuation becomes much more complicated. Respondents in CVM studies are usually asked to assess policy-relevant proposals that often involve a number of biodiversity issues. Thus, respondents must consider their sympathy towards single species as well as taking into account their perceptions towards the importance of a (frequently unknown) number of species, their interrelations to secure the stability of ecosystems as a whole, including risk and (fundamental) uncertainties, as well as expected needs of future generations. In the light of some ecological fundamentals including uncertainty, the task of appropriately valuing biodiversity seems particularly difficult. 6 That means that respondents in a CVM survey might consider several elements of an ecosystem to be substitutable or not vital for the function of that ecosystem while ecologists and biologists would strongly oppose such beliefs. 7 For further critique, see Boulding (1994: 8): ‘It is curious that economists, almost without exception, take human valuations for granted and assume that everybody has a set of preferences that can be expressed as an indifference curve.’ Preferences are often found to be imprecise, as there is ‘plentiful evidence of intervals within which respondents found it difficult to be sure whether they would or would not pay or accept compensation for marginal changes in risks of injury’ in road accidents (Dubourg et al. 1994: 127).

46 Michael Getzner 8 It can be argued that preferences based on existence values are more likely to be of lexicographic nature since existence values are often founded on rights-based beliefs (Stevens et al. 1991). Furthermore, a WTP bid based on existence values can additionally be founded on a number of other reasons, e.g. ‘warm glow’ giving (Kahneman and Knetsch 1992), paying for ‘good causes’ (Stevens et al. 1994) or impure altruism (Andreoni 1990). 9 For more examples on the ‘unwillingness to accept’, see O’Connor (1997: 463). 10 Some differences of results of these studies can, of course, be attributed to differences in the institutional settings and contexts of these experiments. 11 Hanemann (1995: 88) argues that statements of respondents and their preferences are ‘inherently context-laden’. Furthermore, he reviews in detail the problems involved with CVM and voting, and offers a number of methods to overcome problems with inadequately defined context variables. 12 Note, the diverging roles assumed here are not generally accepted in mainstream economics ‘since citizens can be expected to contribute, in one way or another, toward the costs of policy, the respondent trades off the prospect of an amenity improvement against the prospect of a reduction in disposable income’ (Hoehn and Randall 1987: 229). However, the strict distinction between ‘citizen’ and ‘consumer’ is made for illustrative purposes. Those two concepts are better thought of as two poles of a continuum from self-interested utility maximization to purely altruistic social behaviour. Individuals can, of course, behave according to both patterns (i.e. they are not substitutes). 13 System theory particularly stresses the importance of differences between systems in order to be able to strictly divide between circumstances that are inside or outside a particular system (e.g. Luhmann 1986). 14 ‘Individual behavior is always mediated by social relations’ (Arrow 1994: 5). 15 In discussing their results, Schkade and Payne (1994: 107) explicitly mention the ‘citizen input (values) into policy decision’. Their study shows that within CVM questionnaires citizen’s considerations are generally excluded rather than acknowledged. 16 Public projects may run into problems not only because of project characteristics but also due to missing or inadequate involvement of citizens. In this sense CVM as a hypothetical market transaction is ‘blind to reasons’ (Keat 1997: 36). Nevertheless, a CVM survey is one way of involving affected citizens. 17 The questionnaire, additional written material as well as all data, are available from the author on request. 18 There are a number of hypotheses regarding the sign of the coefficients in the model. For instance, WTPi / Yi 0 , with Yi being the income of respondent i as part of the group of Sm variables in equations (3.1a) and (3.1b). 19 An actually existing nature programme of the regional government of Carinthia to protect and enhance biodiversity was valued. The programme was described in terms of what was to be valued (¾ page of description of the programme), how it would be provided and at what level (regional government and nature protection fund), who would pay (partly regional government budget and the fund), and how long it would last (5 years). 20 Due to budgetary constraints (small sample) and lack of previous valuation estimates, a question format including dichotomous choice was deemed infeasible. In any case, the significance of institutional and social context variables seems independent of the chosen question format. 21 The figures presented in this section illustrate preferences of the entire sample consisting mainly of students. The values do not provide a basis for aggregation to the whole population. Rather than producing WTP figures for Carinthia, the aim was to show the influence of extended context variables on WTP bids, which can be assumed to exist in the whole population.

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22 Respondents’ problems with understanding the concept of biodiversity can also be in part interpreted as being a semantic difficulty: In German, the word Biodiversität is apparently poorly known. The words Artenschutz and Artenvielfalt would be understood more clearly, but these concepts only comprise species protection and diversity, leaving out genetic as well as ecosystems diversity. 23 Of course, the credibility of the proposed programme can also be of crucial importance. Respondents thus might particularly value policy programmes and environmental goods as ‘public’ goods rather than context-free discrete ‘bits’ of environmental goods (Brouwer et al. 1999).

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48 Michael Getzner Burgess, J., Clark, J. and Harrison, C.M. (1998), ‘Respondents’ evaluations of a contingent valuation survey: case study based on an economic valuation of the wildlife enhancement scheme, Pevens Levels in East Sussex’, Area 30(1): 19–27. Cameron, J.I. (1997) ‘Applying socio-ecological economics: a case study of contingent valuation and integrated catchment management’, Ecological Economics, 23(2): 155–65. Carson, R.T. (1998) ‘Valuation of tropical rainforests: philosophical and practical issues in the use of contingent valuation’, Ecological Economics, 24(1): 15–29. Carson, R.T. (2000) ‘Contingent valuation: a user’s guide’, Environmental Science and Technology, 34(8): 1413–18. Carter, J.R. and Irons, M.D. (1991) ‘Are economists different, and if so, why?’, Journal of Economic Perspectives, 5(2): 171–7. Common, M. and Perrings, C. (1992) ‘Towards an ecological economics of sustainability’, Ecological Economics, 6(1): 7–34. Common, M., Blamey, R. and Norton, T. (1993) ‘Sustainability and environmental valuation’, Environmental Values, 2(4): 299–334. Common, M., Reid, I. and Blamey, R. (1997) ‘Do existence values for cost benefit analysis exist?’, Environmental and Resource Economics, 9(2): 225–38. Conlisk, J. (1996) ‘Why bounded rationality?’, Journal of Economic Literature, 34 (2): 669–700. Cummings, R.G., Harrison, G.W. and Osborne, L.L. (1995a) ‘Are realistic referenda real?’, Economics Working Paper B-95-06, Division of Research, College of Business Administration, Columbia: University of South Carolina. Cummings, R.G., Harrison, G.W. and Osborne, L.L. (1995b) ‘Can the bias of contingent valuation surveys be reduced? Evidence from the laboratory’, Economics Working Paper B-95-03, Division of Research, College of Business Administration, Columbia: University of South Carolina. de Dios, E.S. (1995) ‘Re-reading Menger’s table’, European Journal of Political Economy, 11(2): 317–34. Department of the Interior (1994) ‘Natural resource damage assessment’, Federal Register, 59(85): 23098–111. Dubourg, W.R., Jones-Lee, M.W. and Loomes, G. (1994) ‘Imprecise preferences and the WTP-WTA disparity’, Journal of Risk and Uncertainty, 9(2): 115–33. Edwards, S.F. (1992) ‘Rethinking existence values’, Land Economics, 68(1): 120–2. Ehrlich, P. and Ehrlich, A. (1992) ‘The value of biodiversity’, Ambio, 21(3): 219–26. Encarnación, J. (1990) ‘Consumer choice of qualities’, Economica, 57(1): 63–72. Etzioni, A. (1986) ‘The case for a multiple utility conception’, Economics and Philosophy, 2(2): 159–83. Fischhoff, B. (1991) ‘Value elicitation: is there anything in there?’, American Psychologist, 46(8), 835–47. Fischhoff, B. and Furby, L. (1988) ‘Measuring values: a conceptual framework for interpreting transactions with special reference to contingent valuation of visibility’, Journal of Risk and Uncertainty, 1(1), 147–84. Fishbein, M. and Ajzen, I. (1975) Belief, Attitude, Intention and Behavior: An Introduction to Theory and Research, Reading: Addison-Wesley. Frey, B.S. (1997) Not Just for the Money, Cheltenham: Edward Elgar. Georgiou, S., Langford, I.H., Bateman, I.J. and Turner, R.K. (1998) ‘Determinants of individuals’ willingness to pay for perceived reductions on environmental health risks: a case study of bathing water quality’, Environment and Planning A, 30 (3): 577–94. Getzner, M. (1999) ‘Risk, uncertainty and discounting in practical environmental decision making’, in K. Steininger and F. Prettenthaler (eds) Proceedings of the Workshop ‘Risk and

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Uncertainty in HD-Research’, Austrian Programme on Human Dimensions of Global Environmental Change, Graz: Department of Economics of the University of Graz. Getzner, M. (2000) ‘Hypothetical and real economic commitments, and social status in valuing a species protection program’, Journal of Environmental Planning and Management, 43(4): 541–59. Goodman, S., Jaffry, S. and Seabrooke, B. (1999) ‘Assessing public preferences for the conservation quality of the British coast, in M. O’Connor and C.L. Spash (eds) Valuation and the Environment: Theory, Method and Practice, Cheltenham: Edward Elgar: 165–82. Gowdy, J. (1996) ‘Discounting, hierarchies, and the social aspects of biodiversity protection’, International Journal of Social Economics, 23(4,5,6): 49–63. Gowdy J. and Olsen P.R. (1994) ‘Further problems with neoclassical environmental economics’, Environmental Ethics, 16(2): 161–71. Hanemann, W.M. (1995) ‘Contingent valuation and economics’, in K.G. Willis and J.T. Corkindale (eds) Environmental Valuation: New Perspectives, Wallingford: CAB International: 79–117. Hanley, N., Spash, C. and Walker, L. (1995) ‘Problems in valuing the benefits of biodiversity protection’, Environmental and Resource Economics, 5(3): 249–72. Harrison, G.W. (1996) ‘Experimental economics and contingent valuation’, Economics Working Paper B-96-10, Division of Research, College of Business Administration, Columbia: University of South Carolina. Hayden, F.G. (1993) ‘Ecosystem valuation: combining economics, philosophy, and ecology’, Journal of Economic Issues, 27(2): 409–20. Hodgson, G.M. (1997) ‘Economics, environmental policy and the transcendence of utilitarianism’, in J. Foster (ed.) Valuing Nature? Ethics, Economics and the Environment, London/New York: Routledge: 48–66. Hoehn, J.P. and Randall, A. (1987) ‘A satisfactory cost indicator from contingent valuation’, Journal of Environmental Economics and Management, 14(3): 226–47. Holland, A. (1997) ‘The foundations of environmental decision-making’, International Journal of Environment and Pollution, 7(4): 483–96. Holm-Müller, K., Hansen, H., Klockmann, M. and Luther, P. (1991) Die Nachfrage nach Umweltqualität in der Bundesrepublik Deutschland, Berlin: Erich Schmidt Verlag. Jacobs, M. (1997) ‘Environmental valuation, deliberative democracy and public decision making’, in J. Foster (ed.) Valuing Nature? Ethics, Economics and the Environment, London/ New York: Routledge: 211–31. Jakobsson, K.M. and Dragun, A.K. (1996) Contingent Valuation and Endangered Species, Cheltenham: Edward Elgar. Jeffrey, R.C. (1974) ‘Preferences among preferences’, Journal of Philosophy, 71(39): 377–91. Johansson, P.-O. (1992) ‘Altruism in cost-benefit analysis’, Environmental and Resource Economics, 2(4): 605–13. Kahneman, D. and Knetsch, J.L. (1992) ‘Valuing public goods: the purchase of moral satisfaction’, Journal of Environmental Economics and Management, 22(1): 57–70. Keat, R. (1997) ‘Values and preferences in neo-classical environmental economics’, in J. Foster (ed.) Valuing Nature? Ethics, Economics and the Environment, London/New York: Routledge: 32–47. Kosz, M. (1997) ‘Probleme der monetären Bewertung von Biodiversität’, Zeitschrift für Umweltpolitik und Umweltrecht, 20(4): 531–50. Lazo, J.K., Schulze, W.D., McClelland, G.H. and Doyle, J.K. (1992) ‘Can contingent valuation measure nonuse values?’, American Journal of Agricultural Economics, 74 (6): 1127– 32.

50 Michael Getzner Lockwood, M. (1997) ‘Integrated value theory for natural areas’, Ecological Economics, 20(1): 83–93. Lockwood, M. (1998) ‘Integrated value assessment using paired comparisons’, Ecological Economics, 25(1): 73–87. Luhmann, N. (1986) Ökologische Kommunikation, Opladen: Westdeutscher Verlag. Marwell, G. and Ames, R.E. (1981) ‘Economists free-ride, does anyone else?’, Journal of Public Economics, 15(3): 295–310. McDaniels, T.L. and Roessler, C. (1998) ‘Multiattribute elicitation of wilderness preservation benefits: a constructive approach’, Ecological Economics, 27 (3): 299–312. Menger, C. (1871) Einführung in die Volkswirthschaftslehre: erster, allgemeiner Theil, Vienna: Braumüller. Mitchell, R.T. and Carson, R.C. (1989) Using Surveys to Value Public Goods: The contingent valuation method, Washington DC: Resources for the Future. O’Connor, M. (1997) ‘The internalization of environmental costs: implementing the polluter pays principle in the European Union’, International Journal of Environment and Pollution, 7(4): 450–82. O’Hara, S. (1996) ‘Discursive ethics in ecosystem valuation and environmental policy’, Ecological Economics, 16(2): 95–107. Peukert, H. (1998) Das Handlungsparadigma in der Nationalökonomie, Marburg: Metropolis Verlag. Sagoff, M. (1988) The Economy of the Earth, New York: Cambridge University Press. Sagoff, M. (1998) ‘Aggregation and deliberation in valuing environmental public goods: a look beyond contingent pricing’, Ecological Economics, 24(2/3): 213–30. Schkade, D.A. and Payne, J.W. (1994) ‘How people respond to contingent valuation questions: a verbal protocol analysis of willingness to pay for an environmental regulation’, Journal of Environmental Economics and Management, 26(1): 88–109. Schulze, W., McClelland, G., Waldman, D. and Lazo, J. (1996) ‘Sources of bias in contingent valuation’, in D.J. Bjornstad and J.R. Kahn (eds) The Contingent Valuation of Environmental Resources, Cheltenham: Edward Elgar: 97–116. Sen, A.K. (1977) ‘Rational fools: a critique of the behavioral foundations of economic theory’, Phil. and Public Affairs, 6(4): 317–44. Solow, R.M. (1993) ‘Sustainability: an economist’s perspective’, in R. Dorfman and N.S. Dorfman (eds) Economics of the Environment, 3rd edn, New York: W.W. Norton. Spash, C. and Hanley, N. (1995) ‘Preferences, information, and biodiversity preservation’, Ecological Economics, 12(3): 191–208. Stevens, T.H., Echeverria, J., Glass, R.J., Hager, T. and More, T.A. (1991) ‘Measuring the existence value of wildlife: what do CVM estimates really show?’, Land Economics, 67(4): 390–400. Stevens, T.H., More, T.A. and Glass, R.J. (1994) ‘Interpretation and temporal stability of CV bids for wildlife existence: a panel study’, Land Economics, 70 (3): 355–63. Stork, P. and Viaene, J.-M. (1992) ‘Policy optimization by lexicographic preference ordering’, Journal of Policy Modeling, 14 (5): 655–73. Toman, M.A. (1999) ‘Sustainable decision making: the state of the art from an economics perspective’, In M. O’Connor and C.L. Spash (eds) Valuation and the Environment: Theory, Method and Practice, Cheltenham: Edward Elgar: 59–72. Tversky, A., Sattath, S. and Slovic, P. (1988) ‘Contingent weighting in judgement and choice’, Psychological Review, 95 (3): 371–84. Vatn, A. and Bromley, D.W. (1994) ‘Choices without prices without apologies’, Journal of Environmental Economics and Management, 26 (2): 129–48.

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Non-use values and attitudes Wetlands threatened by climate change Jürgen Meyerhoff

Introduction Climate change is expected to cause extensive damage in coastal areas due to a rise in sea level and increasingly frequent violent storms. Scientists expect that, in particular, the nature and landscape of the German Wadden Sea, a coastal wetland ecosystem, will be negatively influenced. The adjacent salt marshes, a habitat for endangered species, have already been adversely affected in quality and quantity by human interference, such as by dam construction and waste disposal into the North Sea, and are expected to deteriorate even faster. However, it is possible to mitigate the consequences of climate change by taking suitable measures such as removing dams (Reise 1993, 1996). To obtain information about the population’s support for the protection of the Wadden Sea against the consequences of climate change, the willingness to pay (WTP) of German households was determined by using the contingent valuation method (CVM).1 Several studies have shown that non-use values can form an important part of the total economic value of environmental assets (Garrod and Willis 1996; Bateman and Langford 1997), particularly for highly unique resources. Therefore, non-use values were also thought to form an important part of the total economic value of the Wadden Sea. This area is a very valuable natural refuge, ranking third out of thirteen national parks in Germany. However, despite an ongoing debate among environmental economists about the compatibility of non-use values with neoclassical theory, it is far from obvious whether all bids from non-users express economic values and should therefore be used in cost-benefit analyses. As a guideline, some authors require that it should at least be possible to explain stated non-use values partly by predictors suggested by economic theory. ‘If it is argued that non-use values are theoretically included in economic benefits, these values should therefore be suitable for economic models of choice, this would imply, among other things, that the value for a good with non-use value should be partly explained by income, and possibly by other economic determinants of value’ (Wierstra 1996: 118; also Blamey et al. 1995: 272). One aim of this study was to clarify the relationship between attitudes and non-use values, testing the results by Wierstra. In his study On the Domain of Contingent Valuation, he found that the variation of stated non-use values could be explained solely based on attitudes.

52 Jürgen Meyerhoff This chapter is organized in the following way. In the second section, a brief overview of the discussion about the relationship of attitudes and WTP is given. The third section presents the design of the contingent valuation and its results in relation to the use and non-use of the Wadden Sea area. Section four presents findings on the relationship between measured attitudes and WTP, while in section five the results of multiple analyses by SPSS-CHAID and OLS regression are discussed. Further conclusions are drawn in section six.

Attitudes as predictors of WTP within the CVM There is increasing debate about how knowledge of social psychology can and should be incorporated into contingent valuation studies. In general, two different approaches exist. On the one hand, economists are looking for ways to extend their basic models in order to be able to explain stated WTP more comprehensively. For example, Georgiou et al. (1998: 592) conclude: ‘These diverse influences upon WTP suggest that simplistic models of preference formation are inadequate bases for CVM studies. Rather an extended model of how individuals form preferences is required’. This approach is also supported by the NOAA panel, as Kotchen and Reiling (2000) point out. On the other hand, attitudes are used as a determinant competing with economic preferences. Particularly when non-use values form an important part of the economic value, there is some disagreement about whether the stated amounts are due to preferences or whether they are just another measure of attitude on an arbitrary scale (Kahneman et al. 1993; 1999). A general definition of attitudes is given by Eagly and Chaiken (1993: 1). They define attitudes as being ‘a psychological tendency that is expressed by evaluating a particular entity with some degree of favour or disfavour’. In order to be able to use attitudes to clarify the question of whether preferences are at work or not, it is necessary to distinguish between different approaches of attitudes. Kaiser et al. (1999: 2) differentiate between three attitude approaches in connection with ecological behaviour: first, the Fishbein and Ajzen tradition with attitudes towards a specified behaviour; second, attitudes towards the environment commonly referred to as environmental concern; and, third, the New Environmental Paradigm (NEP) as an alternative, single component measure of environmental attitude. The theory of reasoned action by Fishbein and Ajzen (1975) and its successors as well as the NEP by Dunlap and van Liere (1978) are at the centre of attention within the debate. Although sometimes connected in CVM studies, both approaches represent in the end different concepts of environmental attitudes. The theory of reasoned action and its successors try to explain the relationship between attitudes and behaviour. Based on this relationship, it should be possible to predict actual behaviour. The main component of these theories is the behavioural intention, which is influenced by attitudes towards a specified behaviour and a subjective norm towards that behaviour. Under certain circumstances the behavioural intention accurately predicts real behaviour. Among others, one requirement is that the principle of compatibility is fulfilled (Ajzen 1996: 387; also Bamberg 1996). This principle demands that attitudes and behaviour should be

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measured at the same level of generality. In this case the likelihood increases that the same set of salient beliefs will be activated and strong correlations between attitudes and behaviour could be observed. Within the theory of reasoned action the expression of WTP can be seen as an intention to behave in a certain way; that is to actually pay the stated amount of money. Bishop and Heberlein were among the first authors to point out the potential for CVM studies to incorporate attitudes towards WTP. In accordance with their work the theory of reasoned action can help to validate measured values and, therefore, supports the assumption of articulated values. ‘Still, if conditions for high attitude–behaviour correspondence are fulfilled, some grounds would exist for arguing that legitimate economic values are being established at least to a rough approximation’ (Bishop and Heberlein 1986: 146). An example of a combination of both CVM and theory of reasoned action is the work by Moisseinen (1999) which examines the WTP of residents of an area in Finland to prevent the extinction of the Saimaa seal. As the results of a former CVM study on the protection of the Saimaa seal were contradictory in itself, Moisseinen used, among other things, the theory of reasoned action to explain the variations of WTP. Following this theory she asked interviewees not only about their WTP, but also about their attitude towards it and about their subjective norm.2 With an extended behavioural model based on the theory of reasoned action and the standard economic approach, it was possible to explain a significantly larger amount of variation (adjusted R-square at a value of 0.43) than usual. Thus, as these attitudes correspond to the ‘principle of compatibility’ they should be a good predictor of the actual WTP. The NEP is an alternative method used to measure environmental attitudes. In its original version the scale consists of 12 items. According to Kaiser et al. (1999), it represents a shift towards a more evaluative conception of attitude because its proponents regard one’s moral values as the core concept of environmental attitude. Therefore, NEP is an instrument to measure value orientations rather than attitudes. Critics have pointed out that NEP and ecological behaviour correlate only weakly at best. An example of a combination of both CVM and NEP is the study conducted by Kotchen and Reiling (2000). They used an expanded and updated version of the NEP measure to elicit the WTP of 1200 Maine residents for the protection of two endangered species. From this study it could be shown that attitudes, measured with the NEP scale, are a significant explanatory variable both of the general WTP and also of the amount people were willing to pay. But although they are a good explanatory variable of WTP it is necessary to keep in mind that these attitudes are not a good predictor of behaviour. Rather it is the use of the NEP scale that provides the possibility to measure what Fischhoff (1991) called basic values. Using attitudes to explain WTP, Wierstra (1996) explored under what conditions the CVM produces valid and reliable measures of value for environmental goods. Wierstra had hypothesized that a reliable measure of value for environmental goods by the CVM is dependent on the positioning of the good to be valued in the dimensions of ‘use/non-use value’ and ‘concrete/abstract’. More specifically, it was tested whether the quality of CVM results declined with increasing degree of

54 Jürgen Meyerhoff non-use value in the good and with increasing degree of abstraction in the good. To test this hypothesis, he carried out three CVM surveys with different environmental goods. In the case of the protection of the island of Rottumeroog within the Wadden Sea off the Dutch coast, only non-use values could arise because the island is uninhabited and visiting it is not allowed. In addition to economic factors such as household size, net income, and fixed housing expenses, Wierstra also determined attitudes from his interviewees. However, although the theory of reasoned action is referred to, attitudes towards a specific behaviour, such as WTP, were not determined. For example, in the case of Rottumeroog, attitudes recorded were concerned more with subjects such as the government’s areas of responsibility, cultural or historical meaning of the island, and how respondents saw nature as being an important aspect of the island. For this reason, however, the ‘principle of compatibility’ wasn’t fulfilled as these attitudes are not suitable as a basis for statements about the relationship of attitude– behavioural correspondence. Rather the elicited attitudes also represent some kind of general attitudes which measure basic values. In the end, Wierstra found that especially for the non-use good some attitudinal factors were sufficient to explain the variation in WTP, while none of the economic factors were significant in this case. Therefore, conditions for the validity of CVM results were not met because the value of a good should at least be partly explained by income, and possibly by other economic determinants of value.

Study design and main results The aim of the contingent valuation survey was to place a monetary value on measures which would allow the protection of the German Wadden Sea against the consequences of climate change. Therefore, a random sample was drawn from the German population, and 2390 households in Germany were contacted by professional interviewers in April and May 1999. The sample was drawn in a three-stage process: first, 140 sample points representing the size of German towns were determined; second, random walk was used to select the household; and, third, the kish-selection-grid was used to address the target person within the household. In order to test for distance-decay effects, the sample was divided into four groups, defined by concentric zones around the Wadden Sea (each with a radius-increment of 220 km). For various reasons, such as ‘nobody at home’, or ‘household or target person not willing to participate in an interview’, 1412 faceto-face interviews were completed.3 This corresponds to a response rate of 59 per cent. In order to inform interviewees about climate change and its possible consequences for the Wadden Sea, they were presented with various short texts, a map of the Wadden Sea area, and a card with photos of parts of the Wadden Sea. The card also contained a map illustrating the distribution of important biotypes in the area and a short description of the main consequences of climate change for the Wadden Sea. As Bateman and Langford (1997: 572) point out, studies which try to measure non-use values are presented with a definitional problem. Generally, non-use values

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are associated with benefits from the knowledge that an environmental asset exists or is maintained independent of any actual or potential use. Moreover, they are to a large extent expected to be elicited by people who live far away from the site involved and who never have and probably never will visit it (Brouwer and Slangen 1998). However, non-use values can also be attached to environmental assets by people who have visited the site. Despite an ongoing debate, there is no generally accepted approach to decompose values held by users into use and non-use values. On the other hand, those who were, at the time of the survey, non-users may have valued the protection of the Wadden Sea area even if they have no intention or desire to visit it. Therefore, in this study non-use values are defined as the WTP solely of non-users. Accordingly, use values are defined as the WTP of users. This way of proceeding gives at least a well-founded lower bound of the non-use benefits which arise from the environmental good (Silberman and Gerlowski 1992: 226). Moreover, to inform politicians about the economic value of an environmental good such as the Wadden Sea area it is not necessary to know which part of the users’ WTP arises from non-use values. Crucial is, rather, the total economic value which comprises user and non-users’ total WTP. Users were, in contrast to non-users, defined as persons who have visited the North Sea coast or any of the coastal islands at least once. In accordance with this definition 49 per cent (695 people) out of the entire sample were users. Out of this group more than 60 per cent had visited the North Sea coast within the last five years, more than 80 per cent within the last 10 years. In addition, 72 per cent had visited the coast more than once, implying that the North Sea coast is an important area for recreation in Germany.4 On the other hand, 51 per cent (717 people) had never visited this area before and were therefore taken as non-users. The spatial distribution of users and non-users was as expected. The portion of users decreased and that of non-users increased proportionally to the distance from the coast, between 30 per cent non-users in zone 1 (mainly covered by Schleswig-Holstein and Hamburg) to 65 per cent in zone 4 (covered by Bavaria and BadenWürttemberg). As Table 3.1 shows, out of the whole sample 336 people or 25 per cent were in principle willing to pay for the offered programme. This group consisted of 225 users and 111 non-users. Before the data were examined further, protest bids were excluded from the following analysis. Protest responses are often determinated within CVM studies on an ad hoc basis and in almost every CVM study different approaches are used to determine these responses (Jorgensen et al. 1999: 135–7). However, all approaches Table 3.1 Distribution of interviews and in-principle WTP

WTP Zone 1 Zone 2 Zone 3 Zone 4 Total

All

User

300 407 403 302 1412

Yes 61 74 46 44 225

Non-user No 148 153 108 61 470

Yes 3 23 32 53 111

No 88 157 217 144 606

56 Jürgen Meyerhoff share the aim to differentiate real zero bidders from people who stated zero bids but for reasons other than not valuing the good in question. Protest responses are normally excluded from further analysis because they do not represent true economic values. Despite the fact that a lot of problems are associated with this practice of censoring protest responses, a simple follow-up question was also used in this study, asking the respondent to give a reason for not being willing to pay. People who answered ‘current taxes deemed already too high’, ‘I do not trust payments addressee’ or ‘not I but the state is responsible’ were determined as protest voters and excluded from further analysis. Taken together, this results in 56 per cent (797 people) protest responses. This is, compared with other studies, a relatively high amount of protest bids. For example, Spaninks et al. (1996) report 98 protest bids or 11 per cent out of 841 responses. One explanation for the high rate of protest bids could be that shortly before the main survey an eco-tax on fuel was introduced in Germany (1 April 1999). Out of the protest group, 62 per cent (497 people) stated, at least as one of the two most important reasons for not being willing to pay, that current taxes are already too high. Compared with the study by Spaninks et al. it is also necessary to keep in mind that they used a mail survey instead of personal interviews. As the 841 responses represent only a response rate of slightly more then 30 per cent, many people who did not respond were perhaps also ‘protesting’. Within the remaining group of users, 67 per cent (225 people) were in general willing to pay for the protection of the Wadden Sea while within the group of remaining non-users only 37 per cent (108 people) were in general willing to pay. As expected, the portion within non-users is substantially lower than the percentage of users who are willing to pay. Also the mean amounts show significant differences. While users are willing to pay DM 11.51 per household per month, non-users were willing to pay DM 3.57. To test whether there is a statistically significant difference in WTP between the two groups, the non-parametric Mann–Whitney test was used. It requires no assumptions about the distribution and tests whether the observations in two samples have the same distribution. The result (z = –8.38; p < 0.001) allows the rejection of the null hypothesis of equal WTP of users and non-users at a 1 per cent significance level. Table 3.2 summarizes the main results of the WTP statistics for users and non-users pooled and for each group alone. Table 3.2 Summary statistics of the WTP (in DM) for users and non-users

n Protest votes Used sample Willing to pay Mean WTP Standard deviation Median WTP Mode WTP Maximum WTP

All

User

Non-user

1412 790 622 336 7.8 17.2 1.0 0 170

695 362 333 225 11.1 20.8 5 0 170

717 428 289 111 3.6 10.3 0 0 100

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57

Influence of attitudes on WTP As mentioned in section one, it was the aim of this study to test Wierstra’s results about the relationship between attitudes and WTP. According to him, it was hypothesized that the conditions for economic values were not met if the WTP of non-users could be sufficiently explained by attitudinal factors; in this case the survey would support the results by Wierstra. Also following Wierstra, attitudes towards more general objects such as nature and climate change were gathered. The reason for this is that only people with enough information about the good are in a position to hold site-specific attitudes. Less informed people, such as nonusers, will possibly construct attitudes (Slaby 1996). Similar to the problem of constructed preferences, these attitudes will supply no sound basis for any analysis. Therefore, the gathering of attitudes was designed more generally, allowing for uninformed non-users to be considered. Figure 3.1 shows the conceptual model which is assumed to determine the WTP. Attitudes were mainly elicited towards three attitude objects: climate change, nature, and valuation of nature with money. The following subsections present the items and results regarding attitudes towards climate change and nature, and the results regarding attitudes towards money. Attitude towards nature and climate change The items which were used to measure the attitude towards climate change and nature are presented in Tables 3.3 and 3.4. Attitudes were measured on a fivepoint scale, ranging from ‘completely agree’ to ‘completely disagree’. The scales were developed in accordance with items used in previous studies involving contingent valuation (Goodman et al. 1996; Wierstra 1996), and in psychological studies (Hofer 1987; Preisendörfer 1996). As a measure of reliability, Cronbach’s • Nature Attitudinal factors

• Climate change • Valuation with money

• User/non-user • Planned visits Landscape-related factors

• Knowledge about the Wadden Sea • Interest in conservation • Distance to Wadden Sea

• Household net income Economic factors

• Household size • Age

Figure 3.1 A conceptual model of WTP determinants

WTP for protection of the Wadden Sea against consequences of climate change

58 Jürgen Meyerhoff Table 3.3 Attitudes towards nature 1. A nature conservation area is only valuable for me if it is allowed to be entered. 2. I am very confident that our children and grandchildren will experience nature in a similar way as we do today. 3. We are allowed to form nature regarding only our own needs. 4. Animal and plant species threatened by extinction should be protected without regard of the cost.* 5. Nature and landscape in Germany did not change during the last 20 years. 6. Spending time amidst nature is a repeatedly wonderful experience.* 7. More consumption goods can compensate the losses of nature and landscape. 8. To protect nature for its own sake should not be a goal of environmental politics. 9. For the protection of nature and landscape I would give up a part of my present income.* In the scale all except item 2 were taken into account; Cronbach’s alpha is 0.67. Notes Items marked with an asterisk were transformed before adding scores. The transformation of a negative formulated item with scores 1 to 5 is: ‘new score’ = 6 – ‘original score’.

Table 3.4 Attitudes towards climate change 1. I myself can contribute no further to protect the climate. 2. Within the discussion on environmental problems the meaning of climate change is exaggerated. 3. For us today the consequences of climate change are without meaning because they occur only in a few decades. 4. Unless causes of climate change are not completely known, measures to protect the climate should not be carried out. 5. For me it doesn’t matter if the following generations will suffer any disadvantages from climate change. 6. I am very confident that policy will be successful in protecting our climate. All items were taken into account; Cronbach’s alpha is 0.75.

alpha was calculated. It is the current standard statistic assessing the reliability of a scale composed of multiple items and it is the most appropriate reliability measure to use for Likert scales. Because it considers the degree to which items on a scale intercorrelate, it is often referred to as a measure of internal consistency (Eagly and Chaiken 1993: 67). The associated alpha is 0.67 for the scale ‘nature’, and 0.75 for the scale ‘climate change’. These low values of Cronbach’s alpha illustrate the problem arising from the use of a scale which is not as well developed as the NEP scale, for example. Compared with a generally accepted value of 0.80 (Schumann 1999: 42), the study fails to gather reliable attitudes. However, if compared with the range of values for Cronbach’s alpha obtained in other studies, our data prove reasonably reliable. Wierstra reported values of Cronbach’s alpha of between 0.45 and 0.85. Diekmann (1997: 220–3) mentioned that in the General Population Survey (Allgemeine Bevölkerungsumfrage (ZUMA-Allbus)) short scales of four to six items were used and Cronbach’s alpha values of approximately 0.60 were obtained. Therefore, the gathered attitudes towards nature and towards climate changes were subjected to further evaluation. Tables 3.5 and 3.6 illustrate the relationship between the attitude score and the mean WTP.

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59

Table 3.5 Attitudes towards nature and WTP Score

User and non-user

User

Non-user

Mean

Std.

N

Mean

Std.

N

Mean

Std.

N

up to 24 25 to 30 31 to 36 37 to 42

1.54 4.92 11.22 19.54

3.98 11.25 19.36 37.09

92 231 260 31

2.63 8.13 14.12 22.22

4.73 15.15 21.52 40.94

34 104 170 20

0.87 2.29 5.74 14.68

3.30 5.29 12.86 30.04

58 127 90 11

X2

93.85

p < 0.001

32.15

p < 0.001

42.25

p < 0.001

Table 3.6 Attitudes towards climate change and WTP Score

User and non-user

User

Non-user

Mean

Std.

N

Mean

Std.

N

up to 12 13 to 18 19 to 24 25 to 30

0.03 3.24 7.86 13.10

0.12 7.98 16.09 23.83

18 156 288 160

0.08 6.17 11.30 15.27

0.20 11.73 19.86 25.10

7 56 160 110

X2

61.9

p < 0.001

18.62

p < 0.001

Mean 0.00 1.60 3.56 8.31 27.59

Std.

N

0.00 3.96 7.59 20.16

11 100 128 50

p < 0.001

The relationship between attitudes towards nature and mean WTP is positive for all three groups. The results confirm the expectation that people with stronger attitudes towards nature are on average willing to pay more than people with weaker attitudes. The mean WTP of users is for each level of the attitude score higher than for the corresponding group of non-users. The last line of Table 3.5 presents results of the Kruskal–Wallis H-test. This non-parametric test is a test for the null-hypothesis that the distribution of some variable (WTP in this case) is the same in all samples defined by a certain grouping variable (attitudes towards nature in this case). The results allow the rejection of the null-hypothesis of equal distribution within each attitude class at a high significance level. The figures in Table 3.6 show the same pattern as in Table 3.5. The mean WTP is at each level of attitude score higher than at the preceding level. Again, mean WTP of users is in each case higher than WTP of non-users. The results of the Kruskal–Wallis H-test allow once more the rejection of the null-hypothesis of equal distribution of WTP at a high significance level. Thus, attitudes towards climate change also have, like attitudes towards nature, a significant influence on WTP. In both cases, a higher score on attitude corresponds to a higher WTP on average. In addition, the analysis of the relationship between attitudes and WTP confirms two more findings presented by Kotchen and Reiling (2000). First, respondents with stronger pro-environmental attitudes are more likely to participate in the valuation procedure. People who were in-principle willing to pay show a higher mean score on both the nature and the climate change scale. Second, people who were defined as protest voters attain lower mean scores on both scales. The Mann– Whitney test indicates that both differences are significant at the 0.1 per cent level.

60 Jürgen Meyerhoff Attitude towards money as a measure of value As another expression of attitude, the degree of agreement with the statement ‘I reject money as a measure to express the value of nature and landscape’ was used. Nearly 45 per cent out of the whole sample ‘completely agree’ or ‘agree’ with this statement, while 25 per cent ‘disagree’ or ‘completely disagree’. Slightly more than 29 per cent are in between both of these groups. The relationship between the stated answers and mean WTP for both users and non-users is given in Table 3.7. In both cases the results of the Kruskal–Wallis H-test allow the rejection of the null-hypothesis of equal distribution of WTP within the defined samples. At a first glance, it is interesting that also people who ‘completely agree’ or ‘agree’ with the presented statement were in-principle willing to pay, and, especially in the group of users, that their mean WTP is relatively high compared with the amounts stated by people belonging to the other categories. However, a post hoc test (Sachs 1997: 395–7) qualifies these findings. In the group of users, their mean WTP does not differ between those who ‘completely agree or agree’ or ‘neither agree nor disagree’ at a 5 per cent significant level. In the group of non-users, only the mean WTP of those who ‘disagree or completely disagree’ differs from the means of the other samples. Nevertheless, the expected result remains unchanged. People who accept money as a measure to express the value of nature and landscape show a significantly higher mean WTP than those who reject money as such a measure.

Multiple analysis of WTP determinants For a multiple analysis of factors influencing WTP, two tools were used. First, CHAID (Chi-squared Automated Interaction Detector) was used to analyse the relationship between the in-principle WTP and the potential explanatory variables. Second, multiple regression equations were estimated using ordinary least squares. This allows us to examine the relationship between the stated amount of WTP and the independent variables. In both cases, equations for users and non-users are presented separately. The aim of this analysis was to test whether use and nonuse values were influenced by totally different factors as Wierstra (1996) found. Table 3.7 Relationship between attitudes towards money and mean WTP ‘I reject money as a measure to express the value of nature and landscape’

User

Non-user

n

% per column

Mean

n

% per column

Mean

Completely agree Agree Neither agree nor disagree Disagree or Completely disagree

41 91 101 100

12.3 27.2 30.2 30.2

11.7 6.6 9.7 17.8

59 95 81 54

20.4 32.9 28.0 18.7

3.4 2.2 3.7 6.0

χ2 (p)

30.4; df. 3; p < 0.001

24.77; df. 3; p < 0.001

Note: Because of a low number of observations in the group ‘completely disagree’, it was merged with the group of people who ‘disagree’.

Non-use values and attitudes

61

Unlike his study, both groups of users have to be analysed separately because only one good with both characteristics was the subject of the CVM. Table 3.8 reports the potential explanatory variables. SPSS-CHAID analysis SPSS-CHAID is a market segmentation technique that is designed for use with categorical variables and continuous variables which have been divided into categories (e.g. income, age). Based on the chi-square test, CHAID divides a population at each level of the analysis into two or more segments that differ with respect to a designated criterion. The analysis stops if the program is not able to detect further significant relationships between the dependent and any remaining variable or if a defined minimum of observations is reached. The first line of each box in the tree diagrams in Figures 3.2 and 3.3 shows the corresponding variable. The second line, except for the root of the tree, shows the category of the respective variable by which CHAID divides the population. In the third line, the percentage of people who are willing to pay within the subgroup is presented, while the fourth line shows the total number of people within that group. In both the user and the non-user group only a very limited number of variables have influence on the dependent variable ‘in-principle WTP’. Among these variables none is predicted by economic theory as an important predictor of WTP. Rather, the attitudinal factors dominate. The attitude towards nature is in both cases the most influential variable. People who show stronger attitudes towards Table 3.8 Potential explanatory variables Variable

Description

AGE INCOME

Respondent’s age (continuous variable) Total monthly net household income (income was set equal to the midpoint of the interval of the 9 intervals in which the respondent’s income fell) Household size including children (continuous variable) Distance to Wadden Sea in kilometres (continuous variable) Previous knowledge of the Wadden Sea area as a natural landscape; ranges from 1 (no knowledge) to 4 (thorough knowledge) 1 if respondent had previous knowledge of negative impact of climate change on Wadden Sea Intention of respondents to travel to North Sea coast: 1 if respondent will travel, 2 if respondent wishes to travel, 3 if respondent neither plans nor wishes to travel 1 if respondent has participated in a hike through the Wadden Sea area Degree to which respondent is interested in conservation of Wadden Sea area; ranges from 1 if respondent is very interested to 5 if respondent is not interested at all Attitudes towards nature (continuous variable) Attitudes towards climate change (continuous variable) Attitudes towards valuation with money (reject money as a measure); ranges from 1 if respondent completely agrees to 5 if respondent completely disagrees

HSIZE DISWAD KNOWS KNOWCL TRAVEL WADHI CONSER ATTNAT ATTCLI ATTMON

62 Jürgen Meyerhoff In-Principle Willingness to Pay yes: 37% n = 289

ATTNA

ATTNA

ATTNA

up to 24 yes: 10%

24–30 yes: 31%

31–42 yes: 61%

n = 58

n = 127

n = 104

TRAVEL 1–2 yes: 48% n = 41

TRAVEL 3

TRAVEL 1–2 yes: 10% n = 50

yes: 22% n = 86

TRAVEL 3 yes: 50% n = 88

Figure 3.2 Tree diagram for non-users

In-Principle Willingness to Pay yes: 67% n = 334

ATTNAT 19–24 yes: 38% n = 34

ATTNAT 25–30 yes: 58% n = 104

ATTNAT 31–54 yes: 77% n = 196

ATTMON tot-agree – nn yes: 71% n = 123

ATTMON disag – tot-disag yes: 88% n = 73

Figure 3.3 Tree diagram for users

nature are more likely to pay for the proposed programme to protect the Wadden Sea. On the second level, variables differ between both models. In the case of the non-user group, TRAVEL is the second most important variable. People who plan a visit or wish to travel to the North Sea are more likely to pay than people who neither plan nor wish to travel. In the case of the user group, the variable ATTMON appears with two new segments merged out of the five-point scale. The more non-users agree to value nature in monetary terms, the higher is the percentage of people who are in-principle willing to pay.

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63

However, the third attitudinal variable, that is attitudes towards climate change, did not show any influence on the in-principal WTP answer either in the group of users or in the group of non-users. One explanation could be that people perceived the offered programme to protect the Wadden Sea as not being something that is connected to climate change. It is supported by the finding that most of the people who were willing to pay stated that they understood that their payment was not solely to finance measures against consequences of climate change but to finance a programme which would also protect the landscape against other negative interventions. Multiple regression analysis Tables 3.9 and 3.10 report the results from the regression analysis for both the group of non-users and the group of users. Various functional forms were fitted to the data. The preferred models, which show the best statistical fit, are based on the double-log form. As the Breusch–Pagan test indicated presence of heteroscedasticity, the White estimator was used and instead of the F-test the non-parametric Wald test was conducted (Greene 2000: 506–11). At a value of 44.61, the Wald test shows that all variables together have a significant influence on the dependent variable. Furthermore, all variables in the non-user model show the expected sign. INCOME is highly significant and shows a positive influence on the dependent variable. AGE is also significant, but only at the 10 per cent level. In contrast, the third variable out of the group of economic variables, HSIZE, is even at the 10 per cent level not significant and was therefore removed from the equation. Out of the group of landscape-related variables CONSERV (‘very interested’ and ‘interested’) shows a positive influence and proves significant at the 1 per cent level. Finally, ATTMON has a negative influence on the stated WTP. Non-users who completely agree with the statement that they reject money as a term to value nature are less willing to pay than people who agree with this statement at a lower degree or disagree with it. Also ATTNA is highly significant and shows the expected positive influence. In view of these results, the requirements set up by Wierstra seem to be fulfilled. Stated bids by non-users are influenced at a significant level by explanatory variables which economic theory predicts. As shown in Table 3.10, this is not the case when bids stated by users are analysed. As opposed to the non-user group, none of the predictors out of the group of economic variables was significant, either at the 5 per cent level or at the 10 per cent level. Therefore, these variables were removed completely from the equation. Slightly more influential were some of the landscape-related variables. WADHI and DISWAD prove significant at the 1 per cent level and at the 5 per cent level and show the expected sign. Users who had participated in a hike through the Wadden Sea area have a higher mean WTP than users who had not. Distance to the Wadden Sea, in contrast to the non-user model, proves significant and supports findings by Sutherland and Walsh (1993) or Pate and Loomis (1997) about the negative relationship between distance and WTP. Similar to the non-user group, both ATTNA and ATTMON show a high and significant influence. As the

64 Jürgen Meyerhoff Table 3.9 OLS results of non-user group

CONSTANT AGE INCOME CONSERV (very interested) CONSERV (interested) ATTNAT ATTMON (completely agree)

Coefficient

Std. error

t-ratio

–7.62 –0.24 0.26 0.48 0.39 2.12 –0.55

1.62 0.14 0.09 0.16 0.12 0.41 0.15

–4.71 –1.75 3.41 3.08 3.21 5.21 –3.81

**** * **** *** *** **** ****

Notes: **** significant at p < 0.001, *** significant at p < 0.01, ** significant at p < 0.05, * significant at p < 0.1

Table 3.10 OLS results of user group

CONSTANT WADHI DISWAD ATTNAT ATTMON (completely agree) ATTMON (agree)

Coefficient

Std. error

t-ratio

–6.5261 0.4127 –0.1717 2.6759 –0.6208 –0.4727

1.4299 0.1511 0.0871 0.4268 0.2343 0.1508

–4.5638 2.7311 –1.9721 6.2694 –2.6492 –3.1339

**** *** ** **** *** ***

Notes **** significant at p < 0.001, *** significant at p < 0.01, ** significant at p < 0.05, * significant at p < 0.1 R2 = 0.17; adjusted R2 = 0.16; Breusch–Pagan = 7.04 (5df); Wald = 17.29 (p <0.001)

Breusch–Pagan test indicated presence of heteroscedasticity also for this model, the White estimator was used once again. The Wald test with a value of 17.29 allowed the rejection of the global hypothesis of no joint influence of the explanatory variables. Compared with the non-user group, the coefficient of determination is 9 per cent lower than in the coefficient in the user group. In conclusion, one can say that the presented results support findings of other studies such as those by Green et al. (1993), Spash (1998), or Kotchen and Reiling (2000) about the influence of attitudes on WTP. The measured attitudes are significant predictors of both in-principle WTP and mean WTP. Moreover, they are also predictors in both user and non-user groups.

Discussion The aim of this chapter was to test whether non-use values are only influenced by attitudes or whether economic predictors influence these values as well. According to Wierstra (1996), goods which have a high degree of non-use value could be out of the domain of contingent valuation because stated WTP for these goods may only be influenced by attitudes. His results about the WTP for the protection of

Non-use values and attitudes

65

the uninhabited island of Rottumeroog support that hypothesis. As opposed to this, contingent valuation of public benefits of protecting the Wadden Sea against consequences of climate change shows exactly the opposite results. While the bids stated by non-users were influenced among other things by economic variables, in the case of users they show no influence at all. However, attitudes and selected landscape-related variables are significant in both models. Confronted only with the results of the presented analysis, one could draw the conclusion that non-use values are influenced more by economic variables than use values. According to Randall (1998) there is no crucial experiment which allows us to answer the question ‘Does the CVM work?’ Therefore, the findings presented in this chapter do not allow us to draw the conclusion that non-use values are always influenced by economic variables. They are just another contribution to the map of performance characteristics of contingent valuation. In this sense, they support findings of several other studies that environmental attitudes are significant explanatory variables of both principle WTP and of the amount of WTP. Furthermore, they also raise the question of whether it is meaningful to draw a dividing line between use and non-use values. Instead, it seems to be more promising to study further which factors determine people’s WTP for collective goods (Green 1997; Green and Tunstall 1999). It is also important to examine in which case the Fishbein–Ajzen attitude-model could be applied to non-users. Fishbein and Ajzen’s work has recently been recognized as being important in environmental valuation studies. One example of a study which was similar to their approach is that conducted by Moisseinen (1999). However, her study aimed at measuring use values. To be in a position to apply this approach to non-users, several aspects have to be considered. For example, the theory of reasoned action demands that some requirements such as the ‘principle of compatibility’ be fulfilled. But in the case of non-users it is not possible to completely fulfil this requirement. As already mentioned, non-users are, normally, people with less information about the good in question. Therefore, it could be misleading to use the theory of reasoned action when non-users’ WTP is of interest. The predictability of actual behaviour which follows the behavioural intention is much weaker if instead of the theory of reasoned action a more general attitude approach such as the NEP, the one used by Wierstra or in this study is applied. Therefore, Bishop and Heberlein’s (1986) point that some grounds exist for arguing that legitimate economic values are being established, at least to a rough approximation, is perhaps no longer valid. A next step in the analysis of the relationship between attitudes and WTP could be to develop and test models which incorporate general attitudes (e.g. environmental concern) and attitudes towards specific behaviour. Within these models, general attitudes are seen as determinants of attitudes towards specific behaviour (Bamberg et al. 1999; Fransson and Gärling 1999). Furthermore, the amount of knowledge people have about the environmental goods should be incorporated in more detail.

66 Jürgen Meyerhoff

Notes 1 This was part of a study on costs of climate change under the project ‘Effects of climatic change on the Island of Sylt: An interdisciplinary research project’. Further information is available at http://soel.geographie.uni-kiel.de/sylt/english/Welcome.htm. 2 At this stage of the sampling procedure interviewees were not informed about the type of survey. Therefore, people who refused to participate did not refuse because they don’t agree with monetary valuation of environmental resources. They refused generally to participate in any kind of survey. 3 The wording of the corresponding items is: ‘What is your attitude towards the extra payment to protect the Saimaa seal? The idea of collecting money from the households is: good ´ bad’ (attitude towards the behaviour) and ‘Majority of people I know would participate by paying the asked amount: likely ´ unlikely’ (subjective norm), (Moisseinen 1999: 202). 4 The definition of ‘users’ as people who have visited the North Sea coast at least once before the interview is very broad because people who have ‘actually used’ the coast many years ago are also defined as users. Further analysis showed no significant difference between people who used the coast many years ago and people who have visited it only one or two years ago. Therefore, this broader definition was applied during the whole evaluation.

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Fransson, N. and Gärling, T. (1999) ‘Environmental concern: conceptual definitions, measurement methods, and research findings’, Journal of Environmental Psychology, 19(4): 369–82. Garrod, G.D. and Willis, K.G. (1996) ‘Estimating the benefits of environmental enhancement: a case study of the River Darent’, Journal of Environmental Planning and Management, 39(2): 189–203. Georgiou, S., Langford, I.H., Bateman, I.J. and Turner, R.K. (1998) ‘Determinants of individuals’ willingness to pay for perceived reductions in environmental health risks: a case study of bathing water quality’, Environment and Planning A, 30: 577–94. Goodman, S., Seabrooke, W., Daniel, H. Jaffry, S. and James, H. (1996) Determination of Non-use Values in Respect of Environmental and Other Benefits in the Coastal Zone, Portsmouth: Centre for Coastal Zone Management. Green, C. (1997) ‘Are blue whales really simply very large cups of coffee?’, paper presented at Stockholm Water Symposium, Stockholm, January 1997. Green, C. and Tunstall, S. (1999) ‘A psychological perspective’, in I.J. Bateman and K.G. Willis (eds) Valuing Environmental Preferences. Theory and Practice of the Contingent Valuation Method in the US, EU, and Developing Countries, Oxford: Oxford University Press: 207–58. Green, C., Tunstall, S., Herring, M. and Sawyer, J. (1993) ‘Customer preferences and willingness to pay for selected water and sewerage services’, a summary report to the Office of Water Services, Middlesex: Flood Hazard Research Centre. Greene, W.H. (2000) Econometric Analysis, New York: Macmillan. Hofer, D. (1987) ‘Naturschutz als Wertobjekt. Eine exemplarische Studie über Einstellungen zu Schutzgebieten’, PhD dissertation, Munich: Ludwig-Maximilians-Universität. Jorgensen, B.S., Syme, G.J., Bishop, B.J. and Nancarrow, B.E. (1999) ‘Protest responses in contingent valuation’, Environmental and Resource Economics, 14(1): 131–50. Kahneman, D., Ritov, I., Jacowitz, K.E. and Grant, P. (1993) ‘Stated willingness to pay for public goods. A psychological perspective’, Psychological Science, 4: 310–15. Kahneman, D., Ritov, I. and Schkade, D. (1999) ‘Economic preferences or attitude expressions? An analysis of dollar responses to public issues’, Journal of Risk and Uncertainty, 19(1–3): 203–35. Kaiser, G.F., Wölfing, S. and Fuhrer, U. (1999) ‘Environmental attitude and ecological behaviour’, Journal of Environmental Psychology, 19(1): 1–19. Kotchen, M.J. and Reiling, S.D. (2000) ‘Environmental attitudes, motivations, and contingent valuation of nonuse values: a case study involving endangered species’, Ecological Economics, 32(2): 93–107. Moisseinen, E.M. (1999) ‘On behavioural intentions in the case of the Saimaa Seal. Comparing the contingent valuation approach and the attitude-behaviour research’, in M. O’Connor and C.L. Spash (eds) Valuation and the Environment. Theory, Method and Practice, Cheltenham: Edward Elgar: 183–204. Pate, J. and Loomis, J.B. (1997) ‘The effect of distance on willingness to pay values: a case study of wetlands and salmon in California’, Ecological Economics, 20(3): 199–207. Preisendörfer, P. (1996) ‘Umweltbewußtsein in Deutschland. Ergebnisse einer repräsentativen Bevölkerungsbefragung 1996’, report for the Umweltbundesamt, Berlin: Umweltbundesamt. Randall, A. (1998) ‘Beyond the crucial experiment: mapping the performance characteristics of contingent valuation’, Resource and Energy Economics, 20(2): 197–206. Reise, K. (1993) ‘Verschwommene Zukunft der Nordseewatten’, in H.-J. Schellnhuber and H. Sterr (eds) Klimaänderung und Küste, Berlin: Springer: 223–9.

68 Jürgen Meyerhoff Reise, K. (1996) ‘Wattökologische Folgen bei Änderung von Klima und Küste’, Schriftenreihe der Schutzgemeinschaft Deutsche Nordseeküste, 1: 31–45. Sachs, L. (1997) Angewandte Statistik, Berlin: Springer. Schumann, S. (1999) Repräsentative Umfrage, München: Oldenbourg. Silberman, J. and Gerlowski, D.A. (1992) ‘Estimating existence value for users and nonusers of New Jersey beaches’, Land Economics, 68(2): 225–36. Slaby, M. (1996) ‘Einstellungsmessung oder Einstellungsgenerierung? Die Bedeutung der informationellen Basis bei Befragten für die empirische Rekonstruktion von Einstellungen zu gentechnischen Anwendungen (Measuring or generating attitudes? Subjective knowledge base for the empirical reconstruction of attitudes towards new applications of genetic engineering)’, Stuttgart: Institut für Sozialforschung of the Universität Stuttgart. Spaninks, F.A., Kuik, O. and Hoogeven, J.G.M. (1996) ‘Willingness to pay of Dutch households for a natural Wadden Sea. An application of the contingent valuation method’, Amsterdam: Instituut voor Milieuvraagstukken of the Free University Amsterdam. Spash, C.L. (1998) ‘Environmental values and wetland ecosystems: CVM, ethics and attitudes’, in M. O’Connor (ed.) The VALSE Project: Social Processes for Environmental Valuation, full final report to the DG-XII, European Commission, chapter 6–B. Sutherland, R.J. and Walsh, R.G. (1993) ‘Effect of distance on the preservation value of water quality’, Land Economics, 61: 281–91. Wierstra, E. (1996) On the Domain of Contingent Valuation, Enschede: Twente University Press.

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Modelling environmental behaviour Socio-psychological simulation Hans-Joachim Mosler

Introduction In economically highly developed countries, many of the conditions that would allow people to behave in environmentally responsible ways are already in place. We have a lot of knowledge; for years surveys have shown that people give top priority to the need to act on environmental issues. The necessary technical and economic resources are also available. But there is little sign of a real about-face except in limited areas. We believe that the much-cited discrepancy between cognition and behaviour, between lip service and a person’s own contribution to conserving the environment, can be better understood if we also take people’s perceptions of the social surround into consideration. To view human beings as Homo economicus (Diekmann 1996; Harsanyi 1977) falls short, because the economic man approach does not explicitly take into account inner psychological factors, such as motives, values, norms and attitudes, nor does it consider social influences on a person’s behaviour. The present research conceives a model of behaviour that in addition to economic factors includes personal and social factors. Environmental consciousness is determined to a significant degree by social systems, or in other words, by people’s corresponding social representations. An individual’s personal contribution seems insignificant in the face of massive destruction of the environment caused by many. This perception – that there is nothing we can do personally, that each one of us is powerless – as well as a reluctance to be the ‘sucker’, are important causal factors in behaviours that overuse environmental resources. It does not seem rational to exercise personal restraint (for example, by not driving), because not only will we suffer from the harm caused by the general public’s overuse (the consequences of air pollution), but from a reduction in our own direct return as well (time saved, comfort). However, as this state of affairs applies equally to all individuals in a society overusing environmental resources, people mutually trap each other in patterns of actions that harm the environment. It is for this reason that we are particularly interested in examining the psychological conditions that would form the basis of a collective reorientation towards environmentally sustainable behaviour. Starting out from new environmentally friendly behaviours of some ‘pioneer’ individuals, we wish to discover the social psychological conditions that would ensure that the number of persons joining ranks with

70 Hans-Joachim Mosler such pioneers would continue to automatically increase and result in a true, largescale ‘turn-around’ of previous, environmentally harmful patterns of behaviour. The focal question of our research can thus be framed as follows: what are the conditions that foster widespread, effective inner dynamics that change collective environmental overuse (in thinking and action) to collective, environmentally responsible thinking and acting? Findings generated by this research will lend scientific support to the planning of environmental protection campaigns.

Method Procedure If we start from the assumption that environmental problems originate in the overusing behaviours of very many individuals, we need to consider how new solutions might be tested in a problem area of this magnitude. The instrument of the questionnaire, based upon imaginary situations or conditions, seems ill-suited (‘How expensive would gasoline have to be for you to change to public transportation?’). Massive field experiments that translate the issue directly in real social systems can also be eliminated; given our present state of scientific knowledge, such experiments would be both financially and ethically irresponsible. Laboratory experiments, which would not require intervention in existing social systems, cannot be carried out with large groups of persons (1000 and more). Computer simulation provides a possible solution. Simulation aims to reconstruct the relevant causeand-effect relationships in a problem area in the form of a model. With the aid of empirical data, the relationships can then be validated. In this way, we can test ‘experimentally’ the most various and unconventional ideas of ways to spread environmentally responsible thinking without incurring the risk of intervention in real social systems. It is important to remember, however, that simulation results are not empirical results found in reality. Simulation results can generate fruitful hypotheses that must be tested in reality. The great advantage is that the hypotheses are derived consistently using a clearly defined procedure. Another important point to consider is that findings gained through the simulation method allow only comparative conclusions, for example that under the conditions studied, Measure A produced better results than Measure B. The simulation method, furthermore, does not allow statements to be made about the means to be used to implement certain measures. For this, real experiments with real people are required. Despite all of this, computer simulation is the only method available for investigating, by means of many systematically varied experiments, how environmentally responsible changes can be instituted in large populations. Our simulation procedure consisted of the following steps. Following a preliminary selection of the most important, empirically wellfounded theoretical approaches within the field of social influence, the theories’ most relevant and significant core statements were formulated, according to content criteria.

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In the ensuing modelling, the core statements of the theories were described with the existing variables and set in relation to one another according to certain systems-theoretical rules (see ‘Modelling of the theoretical concepts’). For lack of space, we here dispense with discussion of programming/technical implementations of the theories (see Mosler 2000 for details). The design of the simulation model was validated through the aid of experts’ evaluations and replication of findings from the fields of environmental and social psychology. Again, due to space considerations, the validation process is not reported here (cf. Mosler 2000 for details). Experiments with various strategies for the spread of behaviours were then conducted. The following will report on the most important and meaningful experiments. From the findings of the simulations, conclusions were drawn pertinent to both environmental practice and basic research. The most well known forms of intervention stemming from environmental research receive a new interpretation; wellfounded recommendations for the field of intervention are derived. The reader may wish to note that the following deals intensively with psychological concepts (to psychologists, however, the descriptions will appear somewhat superficial). The author sees the present chapter as a contribution that takes a perspective that differs greatly from the economic viewpoint, although some relevant connections are pointed out. This becomes clear in the next section. The reader interested in the exact derivation of the findings should read all sections, while others may wish to read only the sections on the simulation experiments and results. The most important findings are reported and discussed in the concluding section. The framework model Very many simulations work from the start at the level of collective variables (macroanalytic simulation, such as of, for example, the influence of prices on total consumption by the public). However, if we aim to tap into the dynamics of the spread, or dissemination (or non-spread, respectively), of environmentally responsible thinking and behaving, we must first of all begin at the level of individuals. We then allow them to interact with each other within the framework of the simulation (microanalytic aggregative simulation). The difficult task is to model the relevant processes of the individual in this area of conflict on the computer. We assume that humans are in principle beings that are free to make their own decisions, and we hold that a computer program cannot represent the richness of human individuality, as it is primitive in comparison. On the other hand, in many areas we do find empirically well-founded uniformities in human behaviour. Our way of proceeding springs from the will and hope to develop, from such empirically proven knowledge, a useful working model of the processes taking place within the individual. Usefulness is measured according to whether or not the model can be validated by the behaviour of real collectives and in terms of whether the simulation based upon the model widens and furthers our understanding of the dynamics of these processes.

72 Hans-Joachim Mosler For this reason, we first design a basic model of an individual (see Mosler 2000 for details), which – as 10,000 identically structured copies (equipped, however, with individually different characteristics) – serves as the basis for the simulated influencing and resource-use processes (see Figure 4.1). These persons differ individually only in their values of the variables. They all function according to the same social psychological principles. These principles are based on a few central and well-founded essences of theories, which are presented in detail in the presentation of results. The framework model first specifies the input and output variables of the theory-based processing by individuals. The model yields information about the inner psychological processes that take place when people use environmental resources (for example, use the resource of air when they drive or heat their homes) or influence each other mutually, whether deliberately or unintentionally. Inner psychological processes are triggered as people communicate with one another in daily life and observe themselves and others. These processes change, depending on further internal and external conditions, the ways in which we feel, think, and argue about the environment and the way we act toward the environment. These simulated individuals have at their disposal differently structured social contact nets (number of friends, acquaintances, neighbours, and strangers they observe). In its basic form, the model is an expanded ‘rational choice’ model (Diekmann 1996; Becker 1976). This means that the variables and processes specified in the model more or less consciously enter into the decisions relevant to using behaviour. The variables and processes thus having an effect are not, however, purely cognitive components. They include, in addition, motives, emotions, norms, and so on. This is what distinguishes our model from the usual ‘rational choice’ models: with a psychological conception, it is not a problem that non-rational components enter into rational decision-making. The following explains the external and internal input variables as well as the inner processes. External input variables are the influences that exert upon a person from the outside and are perceived by the person in some form. Possible distorted perceptions of individuals on the basis of biases are not taken into consideration in this model. For each individual some output variables are calculated that function as external input variables for other persons with whom the individual has contact (‘contacts’) (see Figure 4.1). Also, some non-social input variables, such as specific situational parameters and the momentary state of the resource being used, enter into the calculation of an individual’s output value.

•

•

Use, contact: A summary of all environmentally related behaviours shown by a contact. These behaviours towards the environment are conceived as resourceusing behaviours. For resource utilization, a particular resource can be entered into the model with its characteristic parameters (resources: for example, water, air, wild game populations; parameters: for example, rate of regeneration). Attitude, contact: A summary of a contact’s opinions and evaluations of environmental issues, objects, and behaviour towards the environment, as expressed in various ways.

Figure 4.1 Framework model of behaviour toward the environment

Modelling environmental behaviour 73

74 Hans-Joachim Mosler

• •

•

•

• • • •

Status, contact: This variable represents the sum of a contact’s relevant personal resources (for example, social competence, trust, prestige, knowledge, power, possessions). Persuasiveness, contact: The intensity and quality with which a contact makes a case for various attitudes related to the environment. While direction is given for an attitude (in other words, ‘for’ or ‘against’ environmental protection), persuasiveness indicates the intensity and quality with which these attitudes are presented. Situational factors and incentives: These include all influences from the societalinstitutional surround (rules and prohibitions, positive and negative incentives, and the like). From the entire spectrum of the possible scope of a behaviour, situational factors ‘filter’ a partial spectrum. State of resource: State of the environment, or state of a particular environmental resource, as ‘noticed’ and established by the person. Internal input variables have an effect on the simulated psychological processes ‘from the inside’. The emergence of individual degrees of markedness of these variables due to the individual’s learning history is not examined in this simulation. Values: Stable orientation with regard to environmental facts, objects, and behaviours. Knowledge: Extent and quality of information about the environment, such as knowledge of the regeneration parameters of a specific resource. Self-responsibility: Describes the extent to which people attribute responsibility to themselves for the state of the environment (as opposed to holding other persons, organizations, or institutions responsible). Motives: A summary of various motives, such as curiosity and laziness, that enter into a person’s readiness to act in certain ways. Dependent upon these motives, an act – independently of its consequences – will be viewed as ‘easy’ or ‘desirable’.

External and internal input variables are processed in different sub-models (see Figure 4.1) according to the theory being applied. The output values of the submodels have either a direct outward effect on other persons with whom the individual has contact (attitude, persuasiveness), or they affect variables leading up to behaviour and decisions on the use of resources and consequent actions. The following sub-models were designed and simulated (simulations of sub-models II and IV will not be presented):

• • • •

Processing of group influences upon attitudes towards the environment: application of the theory of Social Comparison Processes. Processing of discrepancy between environmental behaviour and environmental attitude: application of Dissonance Theory. Processing of observation of others’ behaviour towards the environment: application of Bandura’s Social Learning Theory. Processing of resistance to environmental protection measures: application of Reactance Theory.

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Processing of information on the collective utilization of an environmental resource: application of Commons Dilemma research. Processing of communicative influence in view of the individual’s feeling of concerned consternation about the state of the environment, knowledge about the environment, and biases: application of the Elaboration Likelihood Model.

Variables leading to behaviour are direct preliminary steps towards behaviour. On the basis of the Theory of Resource Mobilization (Klandermans 1984) and of the Theory of Planned Behaviour (Frey et al. 1993b; Ajzen 1991; Ajzen and Madden 1986), we start from the assumption that the following five components play an important role in behavioural intentions relating to the environment:

• • • • •

Attitude towards the environment as the attitude towards environmental protection and individual behaviour regarding the environment. The subjective norm as ‘perception of pressure from the social surround’. This expresses the expectations that confront the individual and the degree to which the individual is willing to fulfil these expectations. Behavioural control as the subjective conviction that one can in fact carry out the behaviour. Cost–benefit analysis as a motive for behaviours, which results from weighing the direct costs and direct benefits of actions. Sustainability as a motive, leading to willingness to restrict personal use of a resource. This readiness depends upon both the absolute value that a person places on an environmental resource and on the current discrepancy between collective, sustainable use and the actual pattern of use shown by others. The higher the subjective value of the environment, or the smaller the discrepancy between actual and sustainable patterns of utilization, the greater the effect of the sustainability motive in the sense of a person’s own restraint in use.

All of these variables are conceptualized at a general level, thus according with Ajzen and Fishbein’s (1977) correspondence hypothesis, which states that there is a high correlation between behaviour and the determining variables if they have been operationalized with the same degree of specification. As a fundamental extension of the theory of planned behaviour (Ajzen and Madden 1986), we have added an additional factor, cost–benefit analysis. Although the theory of planned behaviour does contain a kind of cost–benefit analysis, in that its components are broken down in ‘expectation evaluation products,’ we conceptualise this factor as an independent component. With this approach we expect to achieve better explanations of the variance for intention, but more importantly, to gain added starting points for intervention measures. Cost–benefit analysis models people’s ‘economic’ considerations, as they determine whether it will pay for them to act in certain ways. The model is thus the first to integrate economic and social psychological components (see also Mosler and Tobias 2000). These components all influence behavioural intention, which leads to behaviour towards the environment. Additionally, we introduce volition into the model, which

76 Hans-Joachim Mosler is closer to actual behaviour than behavioural intention. Psychological research (Frey et al. 1993b) has shown that the act of making a decision commits a person to the when and where of attempting to realise an intention. As the entire model is deterministic in construction, random variables play absolutely no role in determining individual behaviour towards the environment.

Simulation experiments and results In the following, after a brief introduction of the various sub-models, the conditions for the simulation experiments are described, and the results are presented. In describing the sub-models, we focus on experiments with populations of 10,000 persons and omit the experiments that we conducted with 1 to 10 persons in order to reach a basic understanding of the processes and to validate the model with the aid of existing empirical findings. All variables range within a dimension from 0 to 100. For variables related to environmental orientation, 100 signifies maximum environmental friendliness, and 0 indicates maximum lack of environmental friendliness; 50 represents a point of ‘neither/nor’. In the graphics presenting the findings, average behaviour towards the environment, or the average attitude towards the environment by the population, is always put on the ordinate. If a curve rises, this means that the population is changing in the direction of environmental responsibility. On the abscissa, we find the simulation steps. A step means that in a complete calculation cycle, all individuals exert influence on their contacts, or are themselves influenced, and – together with the others – utilize a resource. The linear progression of the steps should be interpreted as the progression of time; more exact temporal pinpointing is not possible. For the experiments, we usually started out from populations that were rather eco-unfriendly (mean of 40), whereby the values of this variable in the individuals strew around this mean. In order to avoid the reproach that we may have built the results of the simulation right into the program, all experiments were conducted according to a baseline/control group design. The results of a number of steps with and without manipulations (control group) form the basis for comparison; populations were always identical (which is only possible in computer simulation). In the following, we will examine important issues in social intervention and campaign planning with the aid of the simulation model. The following sections on the sub-models are each organized according to a research issue and a reference to the theories being applied. Group influences upon attitudes How must a minority of people behaving in an environmentally friendly way be distributed and networked within a population in order that the environmentally unfriendly majority comes to change its attitudes and behaviour? Frey (1993a: 114ff.) developed an integrative concept of social comparison processes that encompassed Festinger’s theory (1954), Tajfel’s theory of social identity (1978, 1979; cited in Frey et al. 1993a), and Thibaut and Kelley’s theoretical concept of

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the comparison level for alternatives (1959; cited in Frey et al. 1993a). According to the integrative conception of social comparison processes (Frey et al. 1993a: 111ff.), persons in groups change their own attitudes in dependency upon the existing pressure to conform, the attractiveness of the group, and the perception of threat to their self-concepts should they change their own positions. A change in attitude results from the pressure to conform, weighted by the attractiveness of the group. If, however, the person’s self-concept is threatened, there will be no attitude change (see Figure 4.2). Threats to a person’s self-concept arise when their values differ to a certain degree (a value of 30) from the average attitudes of other members of the group. Individuals experience too great a discrepancy between their own values and the group’s attitude as threatening: in order to adapt to the group, the individual would have to deviate too far from personal values. Under social pressure, they would become untrue to themselves. People are more likely to change an attitude the more attractive the group is and the greater the group pressure to conform. Attitudes will change in the direction of the average attitude of the group. Attitude change occurs, however, only if the change does not pose a threat to self-concept. The attractiveness of the group results from two components: (1) the difference between a person’s own attitude and the average attitude of the group – a group is all the more attractive the more that person and group are on the same ‘wavelength’; and (2) the average status of the group – its prestige, power, social resources. The conformity pressure of a group can be calculated according to Tanford and Penrod’s (1984) well-documented formula. Pressure to conform, in reference to the total INDIVIDUAL

PROCESSING OF GROUP INFLUENCES

Values

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Figure 4.2 Representation of the ‘processing of group influences’

78 Hans-Joachim Mosler number of group members, is calculated in an exponential function separately for a minority and a majority member. The population is structured in groups of 10 persons, whereby each group is in contact with two other groups. For the intervention, we assume that an environmental campaign can bring 10 per cent of the population to clearly embrace more friendly attitudes towards the environment than previously (an increase in 25 points), for a limited period of time (for example, for one week = one step in the simulation). These persons we call (attitude) ‘pioneers’. Pioneers are, moreover, more strongly sensitized to deviations from their own positions. Through this, they acquire a particularly low susceptibility to social influencing attempts: even minor deviations of other individuals in the group from their own, pioneer positions imply a potential endangering of their sense of self-esteem. This leads to the less susceptible attitudes of the ‘pioneers’ in the group. As a further form of intervention, pioneers are variously organized. Following the short environmental campaign, they remain in their groups (isolated) with no wider contacts to the outside; they remain in their groups, but are in contact with other pioneers (networks); or they form their own groups (core groups), which may have few or many contacts with other groups. Figure 4.3 documents the experiments conducted as well as their results. The intervention applies only to the fifth step; the dynamics described below result from this short-term intervention. It is extraordinarily important for pioneers’ susceptibility to be low, in order that they do not too soon once again adapt to the surrounding majority. If susceptibility is not low, there will be no positive effects from being networked with other pioneers and from no longer experiencing themselves as a minority. Core groups (also with low susceptibility) only then have an effect on the surrounding majorities in the group if they have numerous outer contacts (curve F in Figure 4.3 continues to climb in further steps, but not as high as curves B and D). In sum, pioneers have to hold to a stronger environmentally responsible attitude, and their susceptibility to influence must be low. In effect, they feel quickly threatened in their self-concept. Pioneers should be activated or active in as many groups as possible and should not be concentrated in just a few groups. Further measures are not required. Social learning of behaviour What factors lead the population to follow the examples of behavioural role models? According to Bandura (1979) people learn not only through direct personal experience, but also through observing others. In this way they gain an idea of how an action is performed. The probability that a learned behaviour will be carried out depends on motivation, and motivation is dependent upon expectations of efficacy (self-efficacy, Bandura 1986: 390ff.) and determined by anticipated selfregulation (Stalder 1985; Bandura 1986: 390ff.). Bandura does not, however, give any indication of the effect on a person’s behavioural repertory when there are several, contradictory behavioural models. For example, someone might observe environmentally responsible behaviour in some people and behaviour that is

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A. B. C. D. E. F.

In each group there is an isolated pioneer whose susceptibility to influence is the same in degree as that of the members of the group majority. In each group there is an isolated pioneer whose susceptibility is lower than that of the members of the group majority. In each group there is a pioneer whose susceptibiity is the same in degree to that of group members; in addition, the pioneer is in contact with 10 other ‘pioneers’ in other groups. They thus no longer experience themselves to be a minority. As in C above, but here pioneers have a lower degree of susceptibility. All pioneers are concentrated within their own core groups and show low susceptibility to influence. Each pioneer is in contact with another person outside of the core group. As in E above, whereby here pioneer group members are in contact with 10 other persons outside of the core group.

Figure 4.3 Change in average attitude due to various group-oriented interventions

damaging to the environment in others. In order to model contradictory influences on self-efficacy, we turned to Latané’s theory of social impact (Latané 1981; Latané and Wolf 1981; further specified in Nowak and Latané 1994; Nowak et al. 1990). In this theory, social influence bases upon the following factors, which stand in a multiplicative relationship: •

Strength: power, importance, intensity, unusual quality or features of the source person for the target person.

80 Hans-Joachim Mosler • •

Immediacy: directness, immediacy in space and time, absence of barriers or filters. Number of sources: number of group members, number of persons present.

The multiplicative relation of the three variables expresses the fact that the effect of one of the variables is greater, the greater the value of the other variables. There is no effect at all if one of the variables equals zero. According to the theory, moreover, the effect of the variable N (number) is not linear, but rather is an exponential function: I = sN t, where I is impact, s is a constant, and the exponent t is a value less than 1. The parameters s and t are different for each situation and have to be determined empirically. The factor ‘number’ thus has the effect that the first person has the greatest impact and each person thereafter has ever less of an impact. With an increasing number of influencing source persons, the social impact on a person rapidly decreases. Expectations of efficacy can be approximately represented by behaviour control, because we define behaviour control as a person’s conviction that they can indeed execute the behaviour. In accordance with the framework model, behaviour control affects the behavioural intention and, thus, behaviour. According to Latané’s theory of social impact (1981), behaviour arises from observation of the using behaviour of contact persons: social influence is a multiplicative function of the number, strength, and immediacy of contact persons. In our model (see Figure 4.4), the variable ‘number’ is determined by the number of the individual’s contact persons who behave in an environmentally responsible, or irresponsible, way. The ‘strength’ of contact persons’ influence is defined by their status. ‘Immediacy’ is conceived INDIVIDUAL

PROCESSING OF OBSERVED BEHAVIOUR Using behaviour

Using behaviour of contact persons

Behaviour control Intention

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Values

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Figure 4.4 Representation of ‘processing of observed behaviour towards the environment’

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of as psychological immediacy. This means that friends have an influence of 1/1, acquaintances of 3/4, neighbours of 1/2, and strangers of 1/4. The social influence of contact persons who behave in an environmentally responsible way and that of those who behave irresponsibly are calculated separately according to the formula and then compared by dividing them (compare Nowak and Latané 1994; Nowak et al. 1990). This ratio determines the behaviour control of the person: a person’s belief that they are able to perform the concrete environmentally friendly behaviour (that is, their behaviour control is the more environmentally responsible) is stronger the greater the number and the higher the status of individuals behaving environmentally responsibly in comparison to persons not behaving environmentally responsibly that they observe. Self-confirmation arises when people compare their own values (personal choice of behavioural standards) with their behaviour. Self-confirmation is also weighted by self-responsibility in order to incorporate the element of feeling responsible. A particular behaviour is all the more important to a person the better it accords with the person’s values and the more strongly the person feels responsible. Selfconfirmation affects volition and, thus, behaviour. Within the framework of an intervention, incentives can move persons having above-average status, for example, to change their behaviours during the intervention phase in the direction of environmental acceptability. On the other hand, it is possible to raise the status of persons displaying above-average environmentally friendly patterns of behaviour through various measures (for example, by means of public commendation awards, coverage in the media, and so on). The experiments were conducted with 300 or 500 persons and included varying degrees of ‘visibility’, in that selected persons displayed their environmental behaviours to many (15) or a few (5) contacts (Figure 4.5). Visibility of resource use has already been demonstrated to be an effective factor (Jorgenson and Papciak 1981; Mosler 1993). A. In this experiment, 500 persons of high status are selected and caused to adopt a behaviour that is more eco-friendly for the duration of the intervention. They are to demonstrate this behaviour to many others (15 contacts). B. As in A above, but here only 300 persons are selected. C. As in A, but here the behaviour is demonstrated to only 5 contacts. D. Here we selected 500 persons showing very environmentally sustaining behaviour patterns, which they demonstrate to 15 contacts. In this case, their status is raised for the duration of the intervention. It appears to be more effective to select persons having high status as role models and to induce them to behave in a more environmentally friendly way for the duration of the intervention than to temporarily raise the status of persons already showing such behaviours. An increase in the number of contacts, that is, an increase in the visibility of the environmentally sound behaviour, achieves relevant effects. An increased number of role models also has a strong effect. The dissemination process continues to progress automatically for some time after the intervention, as the entire social system must again adapt to the changes.

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Figure 4.5 Average population behaviour with differing interventions based on observational learning

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In developing concepts for environmental campaigns, simulation can contribute support with regards to the implementation of efficient means. It can answer questions as to the number of role models required, how these should be selected, and what changes they should show, the degree of visibility necessary, and so on. In particular, simulation allows us to estimate the effects that can be achieved by means of compensation in other values, which makes a direct contribution to an increase in efficiency (for example, an increase in visibility at the expense of the number of role models). However, the simulation method does not allow conclusions about implementing the results, such as statements on how realistic it is to induce high status people to behave in a more environmentally friendly way. As discussed above, the simulation method permits only comparative conclusions. The commons dilemma How must the social surround be perceived for people to become willing to use an environmental resource sustainably? When people act upon the environment, they usually utilize an environmental resource. Utilization of a resource available to all (common property) involves an interpersonal conflict (Liebrand et al. 1992; Mosler 1995). It is in each individual’s interest to keep the personal benefit as large as possible, while the harm incurred or the depletion of the resource must be borne by all (Spada and Ernst 1990; Mosler and Gutscher 1996). The sustainability motive expresses the degree to which a person is willing to protect common property, the environment. This motive depends upon both the absolute value a person places on environmental goods and the current discrepancy between collective, sustainable use and actual patterns of use shown by others (expectation of sustainable utilization). The more highly the individual values the common property of the environment have, or the smaller the discrepancy between actual and sustainable patterns of use is, the greater the effect a sustainability motive will have. Under these conditions, the individual is motivated to make a personal contribution to sustainable patterns of use. The sub-model of the commons dilemma (compare Figure 4.6) yields a sustainability motive as an expression of the desire to use the common property in a resource-sustaining way through cautious use. The sustainability motive results from a multiplicative connection between the expectation of sustainable utilization and valuation of the resource ‘environment’. Valuation of the resource ‘environment’ is determined by the perceived state of the resource (state of the environment) and a person’s environmental values. Environmentally-oriented people use exhausted resources less. Various studies have shown the legitimacy of equating social orientation with environmentally-oriented values (Liebrand 1986; Liebrand et al. 1986; Mosler 1990). The degree of exhaustion of a resource is calculated on the basis of its state, as a percentage of deviation from its maximal state, and weighted by values. This means that a person’s evaluation of the resource is higher the more depleted a resource is and the more the person is environmentally oriented. Our model presently conceives of the perception of the state of the resource as direct perception, that is, without any distortion

84 Hans-Joachim Mosler INDIVIDUAL PROCESSING OF INFORMATION ON COLLECTIVE USE

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Figure 4.6 Representation of ‘processing of information on the collective use of a resource’

stemming from inner psychological biases or from external influences in the form of media reports, disputes among the experts, and so on. The expectation that one’s own way of using the environmental resource will make a contribution towards preservation of the resource is formed from the required proportion of resource-sustaining users in the population and the estimated proportion of resource-sustaining users. In other words, the greater the proportion of nonsustaining users of a resource as estimated by the person in comparison with the required proportion of resource-sustaining users in the population, the lower the person’s expectation that they themselves can make an effective contribution to sustainable use of the resource. This expectation rises in the degree to which the proportion of estimated resource-sustaining contact persons exceeds the required proportion of resource-sustaining users. Knowledge of the number of resourcesustaining users required in order to preserve the resource comes from resource knowledge and the perception of the state of the resource. The model presumes people to have – at present not a very realistic assumption! – knowledge about the regeneration rate, regeneration characteristics, and the maximal state of the resource. From the discrepancy between the maximal state of the resource and the current state of the resource, the person derives the required proportion of resource-sustaining users. The greater the discrepancy between the current and the maximal state of the resource, the greater must be the proportion of the population that uses the resource in a sustainable way if the resource is to recover. The estimated proportion of resource-sustaining users in the population is based upon the behaviour of contact persons perceived by the person. According to the ratio of contact persons using the resource sustainably and non-sustainably, the person makes an estimate for the entire population. This factor is at present not

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yet weighted by socially, or environmentally, oriented values. For example, people who are not environmentally oriented overestimate the number of like-minded people. If no particular interventions take place, there is a danger that dynamics such as those shown in Figure 4.7a will develop. With an optimistic starting value with regard to average use within a population (over 50 = environmentally friendly use), the state of the resource briefly improves. Due to its improved state, its value declines (only goods in short supply are valuable), and the individuals in our simulated population resume stronger exploitation of the resource. From the fifth step onwards, this tendency results in clear over-utilization (average use under 50). This increases the discrepancy between actual and sustainable use patterns, and expectations of sustainable use correspondingly decrease. The individual is less motivated to make a personal contribution to sustainable patterns of utilization (‘… personal restraint on my own part would not make any difference; no one else is showing restraint, so it is better for me to help myself to the resource so long as it is still up for grabs …’). And so the state of the resource deteriorates. Its value rises, which does not, however, lead to a marked reduction in utilization. There is no stopping the course of these ‘downhill’ dynamics, and the resource is destroyed. To counteract these negative dynamics, we ran a campaign in the fifth step that aimed to (a) lead persons, in their own use behaviour, to orient themselves less to other persons’ patterns of use and (b) lend heavier weighting to the importance of the resource. Through this, the common property becomes more highly esteemed. We found that the utilization behaviour of the population becomes more environmentally sustaining (see Figure 4.7b). If individuals use a resource in an environmentally sustainable fashion on the average, the state of the resource improves. This line of development continues until the resource has regenerated. At this time, the resource is available in over-abundance so to speak, whereby its value again declines, and intensity of use increases. Downhill dynamics develop until that crucial point where they are again brought under control. A dynamicstable balance has emerged, in which utilization continually adapts to the state of the resource by means of inner personal factors. The resource will never be completely destroyed. Through the interaction of the social system and the resource, the resulting system behaviour shows large fluctuations. Following Forrester (1972: 48ff.), fluctuating system behaviour results when in a system of interlocking feedback loops two or more temporal delays occur. In the present simulation model, there are delays both within the social system and between the social system and the resource system. The average expectation that one can make an effective contribution to sustainable use of a resource reacts with a delay to the average resource use behaviour of the social surround. The rise and fall of the average value of the common good reacts with a delay to the development of the resource. Our simulation approach is not directly comparable to Forrester’s approach. Forrester observes only one macrosystem, while the simulation builds upon numerous microsystems (individual persons) which join to form the macrosystem (the social system).

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Figure 4.7 Use of an environmental resource

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Processing communicative influence What is the effect of convincing attempts (persuasion) in populations, according to individuals’ concern about the environment, knowledge of the environment, and biases? Here we apply the Elaboration Likelihood Model (Petty and Cacioppo 1986a, b). People process information in varying degrees of thoroughness: the ‘intensity’ of processing is a function of processing motivation and processing ability; areas of great personal relevance (concerned consternation about the environment) and self-responsibility (here responsibility for the state of the environment) increase motivation to process (Stahlberg and Frey 1993). Where deep, complete processing of information occurs, the results of campaigns to convince are primarily dependent upon the quality of the arguments presented; in the case of superficial processing, superficial cues, such as status, credibility and attractiveness of the communicator, gain more weight. Furthermore, individuals holding extreme attitudes or values tend to process information in a biased way: when a person’s own position is too removed from the attitude advocated by the influencing campaign, there can be a ‘boomerang’ effect, whereby the person changes his attitude in a direction opposing the persuasive arguments. If the advocated position is close to one’s own, there will be convergence between them. The principle mechanisms involved may be illustrated by a simplified, information-campaign experiment. The four external input variables in Figure 4.8 represent external influences on the processing individual. The three variables in the upper section of the figure represent influences stemming from the source of persuasion, a communicator. The communicator communicates a particular attitude position with a certain degree of persuasiveness. This persuasiveness variable corresponds to ‘argument quality’ in Petty and Cacioppo (1986b). The fourth external input variable that is processed is the (perceived) current state of the environment. From the left, two free, internal input variables – self-responsibility and values – flow into the submodel. These are not affected by the processes within the model, just as the status of the individual also remains constant. Concern arises from the processing of information on the state of the environment and from a person’s own values as related to the environment. Concern corresponds to the discrepancy between these personal values (the desired value for the state of the environment) and the actual value for the state of the environment (the effective, perceived state of the environment). This means that the greater the deviation between the individual’s values in relation to the environment and the perceived state of the environment, the greater the feeling of concerned consternation. This is true only as long as those values are at a higher level than the state of the environment, or in other words, only as long as the environment is in worse shape than the individual would like to see. The knowledge that the individual has, changes depending upon the degrees of persuasiveness the individual has. Environmental knowledge, in its function as an ability variable, determines the degree of processing depth, or intensity. Processing motivation results from the sum (addition) of the feeling of selfresponsibility – how strongly the person experiences a sense of responsibility for

88 Hans-Joachim Mosler INDIVIDUAL PROCESSING OF SOCIAL INFLUENCING UNDER CONDITIONS OF KNOWLEDGE AND CONCERN Communicator's persuasiveness Communicator's attitude Communicator's status Self-responsibility Processing motivation Perception of state of environment

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Figure 4.8 Representation of ‘processing of communicative influencing under conditions of knowledge and environmental concern’

the state of the environment – and environmental concern. Processing intensity (elaboration likelihood) arises in multiplicative fashion from processing motivation and processing ability. In addition, it is influenced by the status of the communicator (but only where neither processing motivation nor processing ability equals zero). A communicator’s positive status raises processing intensity, while negative status lowers processing intensity. The difference between the attitude position of the individual and the position advocated by the communicator determines attitude change – in dependency, however, upon the influences from central and peripheral processing. If processing intensity is low, peripheral processing will predominate, and the status of the communicator is the main determinant of attitude change. High status of the communicator leads to a change of attitude to the position advocated. Low status of the communicator leads to change of attitude opposing the advocated position. If processing intensity is high, however, central processing takes over, and the persuasiveness of the communicator is the main determinant of attitude change. High persuasiveness is expressed by high quality arguments, and the result is a change of attitude in the desired direction. Low persuasiveness, accompanied by weak arguments, leads to a change of attitude in the opposing direction. Biased processing, moreover, modifies central processing. The individual’s environmental values are compared with the attitude position advocated by the communicator. If they agree (when both are environmentally friendly or environmentally unfriendly), the communicator will successfully influence the person in the desired direction. If there is a discrepancy, however, the person’s attitude will change in the opposing direction.

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To the individual’s initial persuasiveness, a central and peripheral proportion is added in proportion to processing intensity. Where processing intensity is high, the individual’s persuasiveness increases if the persuasiveness of the communicator is higher than the individual’s persuasiveness. Here the individual integrates the communicator’s good arguments into his own argumentation scheme. Where processing intensity is low, the individual’s persuasiveness increases if the persuasiveness of the communicator is higher than the individual’s persuasiveness. In contrast, if the persuasiveness of the communicator is low, the individual’s persuasiveness decreases. This assumption is our own and is not based upon the Elaboration Likelihood Model. The idea is that unreflected acceptance of weak arguments tends to weaken a person’s persuasiveness. We assume to this purpose (as an exception) that the individuals do not influence each other mutually, but that in five steps they are presented with information campaigns (the individuals do not discuss the subject of the environment among themselves, but they all stand under the influence of the campaigns). The campaigns promote strong environmentally friendly attitudes by means of good arguments (leading to high persuasiveness) and/or by means of strong peripheral cues (communicators having high status, as for example esteemed public figures). In addition, we assume that in the campaigns, an appeal can cause persons’ selfresponsibility to increase. Average attitudes and values are low on environmental friendliness, the extent of the sense of self-responsibility is low, and the state of the environment is poor. Persons having environmentally friendly values experience high concern under the condition of poor state of the environment. The following interventions were ‘tested’ (see Mosler et al. 1998):

• • • •

an information campaign presenting good arguments (Figure 4.9, persuasiveness+); an information campaign which works with well-known and esteemed personalities (Figure 4.9, status+); an information campaign based on good arguments and well-known, esteemed personalities (Figure 4.9, persuasiveness+/status+); an information campaign with well-known, esteemed personalities that moreover appeals to people’s sense of environmentally-oriented selfresponsibility (Figure 4.9, self-responsibility+/status+).

Let us first examine results with individual persons selected from the population. Person A – who is biased due to an environmentally non-friendly attitude – places a negative value even on good arguments (curve Persuasiveness+). In contrast, good arguments effect even more environmental consciousness in Person B, who has environmentally responsible attitudes from the start, as information processing is hardly biased here. A campaign using esteemed public figures is effective with both Persons A and B, if they tend to process information relatively superficially (curve Status+). But if Person A’s depth of processing is increased by means of self-responsibility (curve Self-responsibility+/Status+), they then show biased processing, and their attitude

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Figure 4.9 Information campaign experiments without environmentally relevant communication

changes in the direction away from that advocated by the campaign. In the total population, the average attitude becomes most changed by means of good arguments and presentation by esteemed personalities. But as shown in Figure 4.9, we must always take into consideration that these average values within the population hide very contrasting effects upon differing individuals. For various experiments with multiplicators (persons who advocate their environmental attitudes to others), a communication net was constructed. Each simulated person ‘talks’ about environmental issues with five friends and one stranger during each step, whereby the friendships are assumed to be lasting and reciprocal. The relationships to strangers are different in each step. Initial values in the population are the same as those described above for the information campaign experiment. Within the framework of an environmental action campaign, 500 persons (multiplicators) having very environmentally friendly attitudes receive training in argumentation (increasing persuasiveness, see Gonzales et al. 1988). In a variant of this experiment, the status of these persons is raised (as for example through public commendation awards). The following interventions were carried out:

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Multiplicators with good arguments (Figure 4.10, Persuasiveness+). Multiplicators with raised status (Figure 4.10, Status+). Multiplicators with good arguments and raised status (Figure 4.10, Persuasiveness+/Status+). Control situation.

In Figure 4.10 we again see two selected individuals A and B, who both stand under the influence of the action campaign. A glance shows that these graphs are not as smooth as the information campaign graphs. The curves would be smoother if, after a short levelling-off phase, there were only the influence of a constant group of friends. But the ever-changing influence of strangers, upon Persons A and B and also upon their friends, causes fluctuations in attitudes. We can still recognize certain tendencies in the development of attitudes, however. Person A’s attitude becomes less environmentally friendly relatively quickly. Later changes to a more responsible attitude are only brief and are repeatedly destroyed by the environmentally unfriendly social surround. Person B shows initial swings in attitude, but then develops a tendency towards a less environmentally friendly attitude. Both Persons A and B react to the introduction of multiplicators having high status (curve Status+) with an increasingly environmentally friendly attitude. This effect is even stronger if multiplicators in addition show high persuasiveness (curve Persuasiveness+/Status+). But if multiplicators demonstrate only persuasiveness (curve Persuasiveness+), they have no effect upon Person A. There is an initial effect in this case upon Person B, but the influence of the rather environmentally unfriendly social surround cannot be cancelled out. The same effects find expression at the level of the population: multiplicators with raised status are just as convincing as those who also show increased persuasiveness. Multiplicators who have only high persuasiveness at their disposal have a counterproductive effect.

Summary and conclusions The concept of the model, which is based on an elaborated rational choice theory, has proved to be – in connection with the simulation method – a valuable tool for the drafting, designing, and testing of environmental psychological interventions. The most important results of the experiments with the various sub-models can be summarized as follows: People who as a minority wish to effect more environmentally responsible attitudes in their group absolutely must have a low susceptibility to influence. If this condition is fulfilled, no measures for networking the minority persons need be undertaken. Role models can be implemented more successfully if these models have high status and their behaviour is highly visible. To achieve appropriate use of a resource, it is important to lead persons to orient themselves less to other people’s patterns of use and to pay more attention to the state of the resource.

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Figure 4.10 Experiments with multiplicators

Both in general campaigns and in specific action campaigns using multiplicators, it is advantageous to work with people who have high status. If attitudes within a population tend to be environmentally irresponsible, there is little to be gained through the use of persuasiveness or appealing to people’s sense of environmentallyoriented self-responsibility. A common denominator of the results can be formulated as follows, in analogy to Latané’s (1981) theory of social impact, according to which social influence is a function of the strength, immediacy, and number of sources. • • •

Strength: the concepts of susceptibility to influence, suggestibility, status, and persuasiveness belong here. Immediacy: this involves the way that persons are networked, the visibility of behaviour, and the degree to which a person may be influenced by others. Number: while it is always advantageous to work with a large number of pioneers, role models, and multiplicators, the financial means to do so may be limited. In this case, the same effect can be achieved with a smaller number of persons if measures are implemented to improve strength or immediacy.

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In summary, we find a certain number of people equipped with a certain degree of strength and immediacy who will stimulate others to behave in more environmentally responsible ways. Success in getting 3, 5, or even 10 pe rcent of a community to become active does, however, seem an impossible task. According to the Swiss Environmental Survey (Diekmann and Franzen 1995), 16 per cent of people in Switzerland are members of environmental groups. This existing potential, dispersely distributed, needs to be seen as a resource that can be activated and brought together within the framework of concerted environmental efforts. If efforts are insufficiently co-ordinated, they fall flat. The conception of our experiments, with various forms of intervention as well as the application of terms suited to translation into action, might create the impression that we underestimate the problems of implementing in reality the forms of intervention studied. We are conscious of the fact that there are great gaps (theoretical as well as empirical) and incalculabilities between ‘population simulations’ based upon simulated individual behaviour and possible processes in real populations. Many sub-components are missing in our model or are as yet not adequately designed or validated. In spite of this, from our perspective there is no other alternative: we should indeed take on the challenge of examining the complexity of such dynamic processes by means of appropriate instruments. Simulation is an instrument well suited to enlarging our understanding of basic, underlying social processes and developing further those explanatory approaches that are almost exclusively static and based on one-person models. Against the possible view that our approach is far from reality, it must be objected that the forms of intervention we propose are founded upon empirical knowledge gained in small-scale field experiments (see Dwyer et al. 1993; Mosler and Gutscher 1998). In the next phase of research, we plan stage-by-stage testing of the simulation model as a logical step in its proof in practice. Here, in the sense of a practiceoriented ‘acid test’, we will strive towards process-oriented validation. To gain well-founded understanding of the dynamics of existing social systems, data must be collected in real social systems that are relevant to indications resulting from the simulation and that can then be entered into the simulation itself. The focus of the investigation would be the topic of dissemination of new behaviour patterns throughout existing social networks. The optimal method would consist in largescale field experiments. It is not our intention to propagate as ‘tested’ or ‘problem-free’ the application of those forms of intervention judged effective on the basis of our simulations. Rather, our purpose is to show environmentally conscious people, responsible persons, and politicians how worthwhile it can be to expand the old triad of ‘traditional information campaigns’, ‘legal measures’, and ‘economic measures’ by means of additional, novel strategies and to test these potentially successful forms of intervention in practice.

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References Ajzen, I. (1991) ‘The theory of planned behaviour. Some unresolved issues’, Organizational Behaviour and Human Decision Processes, 50: 179–211. Ajzen, I. and Fishbein, M. (1977) ‘Attitude–behaviour relations: a theoretical analysis and review of empirical research’, Psychological Bulletin, 84: 888–918. Ajzen, I. and Madden, T.J. (1986) ‘Prediction of goal directed behaviour: attitudes, intentions, and perceived behavioural control’, Journal of Experimental Social Psychology, 22: 453–74. Bandura, A. (1979) Sozial-kognitive Lerntheorie, Stuttgart: Klett-Cotta. Bandura, A. (1986) Social Foundations of Thought and Action, New York: Prentice-Hall. Becker, G.S. (1976) The Economic Approach to Human Behavior, Chicago: University of Chicago Press. Diekmann, A. (1996) ‘Homo ökonomicus. Anwendungen und Probleme der Theorie rationalen Handelns im Umweltbereich’, in A. Diekmann and C. Jaeger (eds) Umweltsoziologie, Sonderband 36 der Kölner Zeitschrift für Soziologie und Sozialpsychologie: 89– 118. Diekmann, A. and Franzen, A. (1995) Der Schweizer Umweltsurvey 1994, Codeb