Does status quo interpretation affect welfare estimates?
In choice experiments (CEs), respondents select their most preferred alternative from a series of choices. One of these alternatives is the status quo (SQ) option, which resembles the current scenario. Previous studies have shown that the way the researcher defines the SQ may be different from how...
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| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Penerbit Universiti Kebangsaan Malaysia
2018
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| Online Access: | http://journalarticle.ukm.my/20075/1/jeko_523-9.pdf http://journalarticle.ukm.my/20075/ https://www.ukm.my/jem/issue/v52i3/ |
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| Institution: | Universiti Kebangsaan Malaysia |
| Language: | English |
| Summary: | In choice experiments (CEs), respondents select their most preferred alternative from a series of choices. One of these
alternatives is the status quo (SQ) option, which resembles the current scenario. Previous studies have shown that the
way the researcher defines the SQ may be different from how the respondents interpret the same option. Using the case
study of white water rafting (WWR) recreation, we investigated the effect of SQ definition on the demand function used to
estimate the willingness to pay (WTP) of students who participate in WWR. We applied the confidence interval approach,
where WTP values are considered to be significantly different if their confidence intervals do not overlap. We found that
the WTP estimates for some attributes (i.e., challenge at the advanced and intermediate levels, and advanced safety)
were statistically different. The number of significant estimates suggest that the SQ interpreted by the respondents (as an
individual and as a group) are better than that of defined by the researchers. Therefore, we suggest that for purchasing
decisions related to nature-based recreational goods such as WWR, the SQ should be determined by the respondents
rather than by the researchers. |
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