Cost–Benefit Analysis and Distributional Preferences

Cost–Benefit Analysis and Distributional Preferences

A Choice Modelling Approach

Helen Scarborough and Jeff Bennett

Advancing the incorporation of equity preferences in policy analysis, this book demonstrates the application of choice modelling to the estimation of distributional weights suitable for inclusion in a cost–benefit analytical framework. A platform for discussion of the challenges and opportunities of this approach is presented in the form of a detailed case study designed to estimate community preferences for different intergenerational distributions. While the case study is focused on natural resource management and environmental policy, the conceptual and methodological advances illustrated by the authors are relevant and applicable to a wider array of policy deliberations.

Chapter 5: Case Study: Results of Intergenerational Distribution Choice Experiment

Helen Scarborough and Jeff Bennett

Subjects: economics and finance, environmental economics, public finance, public sector economics, valuation, environment, environmental economics, valuation

Extract

5.0 INTRODUCTION The Environmental Choices Across Generations questionnaire developed in Chapter 4 was used to conduct a household survey of a randomly selected sample of the general community using a personal drop-off and collection method. The results, which are summarized in Scarborough and Bennett (2008), are discussed here in further detail. 5.1 DATA COLLECTION The sample was drawn from the community of Warrnambool, an Australian rural city in South-West Victoria with a population of approximately 35000. A total of 503 households were approached, resulting in the delivery of 431 questionnaires. Of the 431 questionnaires which were distributed, 346 (80 per cent) were collected or returned by mail. This included 51 questionnaires (15 per cent of those collected) that were blank or significantly incomplete and consequently unusable. The remaining 295 were used for the data analysis, giving a usable response rate, from those distributed, of 68.5 per cent. For each of the 295 usable responses, five choice sets were completed. This resulted in a total of 1475 completed choice sets for analysis. When compared with the Australian census data, the socio-demographic profile of respondents indicated that those who are younger, female, and with higher income and education levels were likely to be more represented in the randomly selected sample. 5.2 DESCRIPTIVE STATISTICS Table 5.1 summarizes the attributes and socio-demographic variables used in the intergenerational distribution choice model. The coding used to enter the socio-demographic data is also included. The mean, standard deviation and number of observations for each variable are summarized...

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