A Mire of Discount Rates: Delaying Conservation Payment Schedules in a Choice Experiment

Studies on the public’s implicit discount rate in the willingness to pay for environmental amenities have mostly employed contingent valuation surveys. We investigate respondents’ time preferences using choice experiments with four payment schedules in a split-sample design in the context of mire conservation. We first examine preference and taste heterogeneity among respondents, finding them to a large extent independent of payment schedules. Next we use an endogenous approach to jointly estimate the implicit discount rates and preferences using choice experiments data. We explore exponential and hyperbolic discounting model specifications. We find insensitivity to the length of the payment period and support for hyperbolic discounting. Furthermore, we provide policy relevant valuation results concerning mire conservation.

Consumers’ Willingness to Accept Time-of-Use Tariffs for Shifting Electricity Demand

Time-of-use (TOU) electricity tariffs represent an instrument for demand side management. By reducing energy demand during peak times, less investments in otherwise necessary, costly, and CO2 intensive redispatch would be required. We use a choice experiment (CE) to analyze private consumers’ acceptance of TOU tariffs in Germany. In our CE, respondents choose between a fixed rate tariff and two TOU tariffs that differ by peak time scheme and by a control of appliances’ electricity consumption during that time. We use a mixed logit model to account for taste heterogeneity. Moreover, investigating decision strategies, we identify three different strategies that shed light on drivers of unobserved taste heterogeneity: (1) Always choosing the status quo, (2) always choosing the maximum discount, and (3) choosing a TOU tariff but not always going for the maximum discount. Overall, about 70% of our 1398 respondents would choose a TOU tariff and shift their electricity demand, leading to a decline in energy demand during peak times. Rough estimates indicate that this would lead to significant savings in electricity generation, avoiding up to a mid to large-sized fossil-fuel power plant.

Consumer preference for wine from hand-harvested grapes

Purpose The purpose of this paper is to investigate preferences for wine made from hand-harvested grapes, and the interactive effect between this attribute and organic certification. Design/methodology/approach Data were collected via an online choice experiment involving a sample of 408 Italian wine consumers. A random parameter logit was performed to estimate consumer preferences for wine attributes: harvest type, organic and the interaction between these. The experiment also includes geographical indications and price. Furthermore, a latent class model (LCM) is performed to investigate taste heterogeneity for the included wine attributes. Findings On average, consumers prefer the wine produced with hand-harvested grapes. The hypothesis of an interaction between organic and hand-harvested attributes is rejected. Using the LCM, the authors identify three segments with significant taste heterogeneity in terms of the magnitude and the sign of the parameters. Moreover, consumer attitudes towards food naturalness differ according to their belonging to the segments. Originality/value The novelty of this article is twofold. First, this study investigates, for the first time, the impact of the hand-harvested method on consumer wine preferences. Second, hand-harvesting and organic have independent values.