Revisiting money and labor for valuing environmental goods and services in developing countries

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Revisiting money and labor for valuing environmental goods and services in developing countries. / Kassahun, Habtamu Tilahun; Jacobsen, Jette Bredahl; Nicholson, Charles F. .

I: Ecological Economics, Bind 177, 2020.

Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning

Harvard

Kassahun, HT, Jacobsen, JB & Nicholson, CF 2020, 'Revisiting money and labor for valuing environmental goods and services in developing countries', Ecological Economics, bind 177. https://doi.org/10.1016/j.ecolecon.2020.106771

APA

Kassahun, H. T., Jacobsen, J. B., & Nicholson, C. F. (2020). Revisiting money and labor for valuing environmental goods and services in developing countries. Ecological Economics, 177. https://doi.org/10.1016/j.ecolecon.2020.106771

Vancouver

Kassahun HT, Jacobsen JB, Nicholson CF. Revisiting money and labor for valuing environmental goods and services in developing countries. Ecological Economics. 2020;177. https://doi.org/10.1016/j.ecolecon.2020.106771

Author

Kassahun, Habtamu Tilahun ; Jacobsen, Jette Bredahl ; Nicholson, Charles F. . / Revisiting money and labor for valuing environmental goods and services in developing countries. I: Ecological Economics. 2020 ; Bind 177.

Bibtex

@article{74bcc84aa6d54e869148547d98ceab09,
title = "Revisiting money and labor for valuing environmental goods and services in developing countries",
abstract = "Many Stated Preference (SP) studies conducted in developing countries exhibit a low willingness to pay (WTP) for a wide range of goods and services. However, recent studies in these countries indicate that this may be a result of the choice of payment vehicle, not the preference for the good. Thus, low WTP may not indicate a low welfare effect for public projects in developing countries. We argue that in a setting where there is imperfect substitutability between money and other measures of wealth (e.g. labor), including two or more payment vehicles may be needed to obtain valid welfare estimates. Otherwise, we risk underestimating the welfare benefit of projects. We demonstrate this through a rural household contingent valuation (CV) survey designed to elicit the value of access to reliable irrigation water in Ethiopia. Our result shows that both absolute and relative endowment of labor and income highly influence respondents{\textquoteright} choices. Of the total average annual WTP for access to reliable irrigation service, cash contribution comprises only 24.41%. Our findings highlight the importance of accounting for cross payment vehicle correlation and potential endogeneity biases that arise in the sequence of WTP and Willingness to contribute (WTC) valuation questions. ",
author = "Kassahun, {Habtamu Tilahun} and Jacobsen, {Jette Bredahl} and Nicholson, {Charles F.}",
year = "2020",
doi = "10.1016/j.ecolecon.2020.106771",
language = "English",
volume = "177",
journal = "Ecological Economics",
issn = "0921-8009",
publisher = "Elsevier",

}

RIS

TY - JOUR

T1 - Revisiting money and labor for valuing environmental goods and services in developing countries

AU - Kassahun, Habtamu Tilahun

AU - Jacobsen, Jette Bredahl

AU - Nicholson, Charles F.

PY - 2020

Y1 - 2020

N2 - Many Stated Preference (SP) studies conducted in developing countries exhibit a low willingness to pay (WTP) for a wide range of goods and services. However, recent studies in these countries indicate that this may be a result of the choice of payment vehicle, not the preference for the good. Thus, low WTP may not indicate a low welfare effect for public projects in developing countries. We argue that in a setting where there is imperfect substitutability between money and other measures of wealth (e.g. labor), including two or more payment vehicles may be needed to obtain valid welfare estimates. Otherwise, we risk underestimating the welfare benefit of projects. We demonstrate this through a rural household contingent valuation (CV) survey designed to elicit the value of access to reliable irrigation water in Ethiopia. Our result shows that both absolute and relative endowment of labor and income highly influence respondents’ choices. Of the total average annual WTP for access to reliable irrigation service, cash contribution comprises only 24.41%. Our findings highlight the importance of accounting for cross payment vehicle correlation and potential endogeneity biases that arise in the sequence of WTP and Willingness to contribute (WTC) valuation questions.

AB - Many Stated Preference (SP) studies conducted in developing countries exhibit a low willingness to pay (WTP) for a wide range of goods and services. However, recent studies in these countries indicate that this may be a result of the choice of payment vehicle, not the preference for the good. Thus, low WTP may not indicate a low welfare effect for public projects in developing countries. We argue that in a setting where there is imperfect substitutability between money and other measures of wealth (e.g. labor), including two or more payment vehicles may be needed to obtain valid welfare estimates. Otherwise, we risk underestimating the welfare benefit of projects. We demonstrate this through a rural household contingent valuation (CV) survey designed to elicit the value of access to reliable irrigation water in Ethiopia. Our result shows that both absolute and relative endowment of labor and income highly influence respondents’ choices. Of the total average annual WTP for access to reliable irrigation service, cash contribution comprises only 24.41%. Our findings highlight the importance of accounting for cross payment vehicle correlation and potential endogeneity biases that arise in the sequence of WTP and Willingness to contribute (WTC) valuation questions.

U2 - 10.1016/j.ecolecon.2020.106771

DO - 10.1016/j.ecolecon.2020.106771

M3 - Journal article

VL - 177

JO - Ecological Economics

JF - Ecological Economics

SN - 0921-8009

ER -

ID: 269730805