Estimating the willingness to pay for reducing acid deposition injuries to cultural resources: Choice experiments and heterogeneous preferences

This research develops a methodology for estimating willingness-to-pay (WTP) for a non-market good in which preferences are heterogeneous and largely passive-use. This research is innovative in the method of data collection and data analysis. The good being valued is an environmental change to a cultural resource: reducing acid deposition injuries to the outdoor marble monuments in Washington, D.C. Visitation rates and travel costs indicate that these monuments have significant use value. However, focus group results suggest that the most important reason for preservation is potential use by others, both now and in the future. To estimate the WTP for reducing acid deposition injures to these monuments, the reduction in injuries are presented as hypothetical preservation program that mimic the expected, yet uncertain, effects of the SO2 emission regulation of Title IV of the 1990 Clean Air Act Amendments.;In Chapter One, the survey methodology is discussed and pair-wise choice experiment data are used to estimate the parameters of a logit model with interaction terms and step-income effects. A choice experiment survey was administered to groups of respondents. The estimated WTP for reducing the rate of injury is significant, increases with the degree of preservation, and is a function of ethnicity, gender, age and income group.;In Chapter Two, classic interaction terms are combined with random parameters to identify the extent and nature of heterogeneity of preferences for reducing the rate of injury. There are two compelling reasons to do this. First, if preferences are incorrectly assumed to be homogeneous, preference parameter estimates and WTP estimates will be biased. Second, correctly modeling preferences as heterogeneous can provide important information regarding how WTP varies across individuals. The results indicate considerable heterogeneity in preferences and WTP. Further, it is demonstrated that combining interaction terms with random parameters is superior, in this application, to either method alone. This approach exploits the strengths of these two methods. The use of random parameters greatly improves that explanatory power and provides information about the extent of heterogeneity. Utilizing interaction terms provides information about the nature of heterogeneity---indicating, for example, how preferences vary by individual characteristics.