Economics

Modeling Spatial Patchiness and Hot Spots in Stated Preference Willingness to Pay

Document Type

Article

Abstract

Stated preference analyses often impose strong assumptions regarding spatial welfare distributions that can influence the validity of welfare analysis and aggregation. These include spatial homogeneity and continuous distance decay. Global assumptions such as these are increasingly questioned by non-economics disciplines in favor of approaches that allow for local patchiness. Drawing from this literature, this article proposes methods to identify and evaluate hot spots in stated preference welfare estimates using local indicators of spatial association. Methods are illustrated using geocoded choice experiment data addressing river restoration. Results suggest the presence of statistically significant, non-continuous patterns overlooked by current approaches.

Publication Title

Environmental and Resource Economics

Publication Date

10-15-2014

Volume

59

Issue

3

First Page

363

Last Page

387

ISSN

0924-6460

DOI

10.1007/s10640-013-9731-2

Keywords

choice modeling, cost benefit analysis, distance decay, ecosystem service, local indicators of spatial association, spatial autocorrelation, valuation

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