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Price vector effects in choice experiments

Adamowicz, V. and Hanley, N. and Wright, R.E. (2005) Price vector effects in choice experiments. Resource and Energy Economics, 27 (3). pp. 227-234. ISSN 0928-7655

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Abstract

This paper investigates whether the preference and willingness-to-pay estimates obtained from the choice experiment method of estimating non-market values are sensitive to the vector of prices used in the experimental design. We undertake this test in the context of water quality improvements under the European Union's new Water Framework Directive. Using a mixed logit model, which allows for differing scale between the two samples, we find no significant impact of changing the price vector on estimates of preferences or willingness-to-pay.