Blasch, Julia and Farsi, Mehdi (2012): Retail demand for voluntary carbon offsets – a choice experiment among Swiss consumers.
Download (1MB) | Preview
Using a choice experiment conducted among more than a thousand Swiss consumers, we analyze the individual demand for voluntary carbon offsets in different contexts. The analysis is used to identify the consumers’ underlying motives for offsetting emissions, the context effects on their willingness to pay and the influence of the offsetting project characteristics on their propensity for contribution. Furthermore, the characteristics of potential buyers as well as the possibilities of behavioral rebound are explored. To support our results, we assess whether the hypothetical preferences are consistent with the revealed behavior. The adopted latent class model accounts for heterogeneity of preferences with respect to offset products offered in the market. The results provide a quantitative assessment of consumers’ marginal valuation of carbon offsets and a better understanding of individual preferences. The results also point to strong heterogeneity among individuals favoring targeted policy measures to induce voluntary contribution.
|Item Type:||MPRA Paper|
|Original Title:||Retail demand for voluntary carbon offsets – a choice experiment among Swiss consumers|
|Keywords:||Voluntary carbon offsets, Willingness to pay, Choice experiment, Latent class model|
|Subjects:||D - Microeconomics > D0 - General > D03 - Behavioral Economics; Underlying Principles
D - Microeconomics > D1 - Household Behavior and Family Economics > D12 - Consumer Economics: Empirical Analysis
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate; Natural Disasters; Global Warming
|Depositing User:||Julia Blasch|
|Date Deposited:||12. Sep 2012 13:01|
|Last Modified:||12. Feb 2013 08:22|
Achtnicht, M.: 2009, German Car Buyers’ Willingness To Pay To Reduce CO2 Emissions, ZEW Discussion Paper No. 09-058.
Akter, S., Bennett, J. and Akhter, S.: 2008, Preference uncertainty in contingent valuation, Ecological Economics 67(3), 345 – 351.
Andreoni, J.: 1988, Privately provided public goods in a large economy: The limits of altruism, Journal of Public Economics 35, 57–73.
Andreoni, J.: 1989, Giving with impure altruism: Applications to charity and ricardian equivalence, Journal of Political Economy 97, 1447–1458.
Andreoni, J.: 1990, Impure altruism and donations to public goods: A theory of warm-glow giving, The Economic Journal 100, 464–477.
Baron, D. P.: 2010, Morally Motivated Self-Regulation, American Economic Review 100(4), 1299–1329.
Bech, M. and Gyrd-Hansen, D.: 2005, Effects coding in discrete choice experiments, Health Economics 14, 1079–1083.
Bellassen, V. and Leguet, B.: 2007, The emergence of voluntary carbon offsetting, Note d’étude de la Mission climate de la Caisse des Dépôts No.11.
Bergstrom, T., Blume, L. and Varian, H.: 1986, On the private provision of public goods, Journal of Public Economics 29, 25–49.
Bliemer, M. C. and Rose, J. M.: 2011, Experimental design influences on stated choice outputs: An empirical study in air travel choice, Transportation Research Part A: Policy and Practice 45(1), 63 – 79.
Brekke, K. A., Kverndokk, S. and Nyborg, K.: 2003, An economic model of moral motivation, Journal of Public Economics 87(9-10), 1967 – 1983.
Brouwer, R., Brander, L. and Van Beukering, P.: 2008, A convenient truth: air travel passengers’ willingness to pay to offset their CO2 emissions, Climatic Change 90, 299–313.
Bruvoll, A., Halvorsen, B. and Nyborg, K.: 2002, Households’ recycling efforts, Resources, Conservation and Recycling 36(4), 337 – 354.
Camerer, C. F.: 2003, Behavioral game theory, Princeton University Press.
Champ, P. A., Bishop, R. C., Brown, T. C. and McCollum, D. W.: 1997, Using Donation Mechanisms to Value Nonuse Benefits from Public Goods, Journal of Environmental Economics and Management 33(2), 151 – 162.
Clark, C. F., Kotchen, M. J. and Moore, M. R.: 2003, Internal and external influences on pro-environmental behavior: Participation in a green electricity program, Journal of Environmental Psychology 23(3), 237 – 246.
Conte, M. N. and Kotchen, M. J.: 2010, Explaining the Price of Voluntary Carbon Offsets, Climate Change Economics 1(2), 93–111.
Cornes, R. and Sandler, T.: 1984, Easy riders, joint production, and public goods, The Economic Journal 94, 580–598.
Cornes, R. and Sandler, T.: 1986, The Theory of Externalities, Public Goods and Club Goods, second edn, Cambridge University Press.
Cornes, R. and Sandler, T.: 1994, The comparative static properties of the impure public goods model, Journal of Public Economics 54, 403–421.
Cummings, R. G. and Taylor, L. O.: 1999, Unbiased value estimates for environmental goods: A cheap talk design for the contingent valuation method, The American Economic Review 89, 649–665.
Dawes, R. M. and Thaler, R. H.: 1988, Anomalies - Cooperation, Journal of Economic Perspectives 2, 187–197.
Diederich, J. and Goeschl, T.: 2011a, Giving in a Large Economy: Price vs. Non-Price Effects in a Field Experiment, University of Heidelberg Department of Economics Discussion Paper Series 514.
Diederich, J. and Goeschl, T.: 2011b, Willingness to Pay for Individual Greenhouse Gas Emissions Reductions: Evidence from a Large Field Experiment, University of Heidelberg Department of Economics Discussion Paper Series 517.
Diekmann, A. and Preisendörfer, P.: 1998, Umweltbewusstsein und Umweltverhalten in Low- und High-Cost-Situationen. Eine empirische Überprüfung der Low-Cost-Hypothese, Zeitschrift für Soziologie 27(6), 438–453.
Fehr, E. and Gächter, S.: 2000, Fairness and retaliation: The economics of reciprocity, The Journal of Economic Perspectives 14(3), 159–181.
Fehr, E. and Schmidt, K. M.: 1999, A Theory Of Fairness, Competition, And Cooperation, The Quarterly Journal of Economics 114(3), 817–868.
Ferrini, S. and Scarpa, R.: 2007, Designs with a priori information for nonmarket valuation with choice experiments: A Monte Carlo study, Journal of Environmental Economics and Management 53(3), 342–363.
Fischbacher, U., Gächter, S. and Fehr, E.: 2001, Are people conditionally cooperative? Evidence from a public goods experiment, Economics Letters 71(3), 397 – 404.
Frey, B. S. and Meier, S.: 2004, Social comparison and pro-social behavior: testing "conditional cooperation" in a field experiment, The American Economic Review 94, 1717–1722.
Frey, B. S. and Stutzer, A.: 2006, Environmental morale and motivation, Institute for Empirical Research in Economics Working Paper 288.
Gächter, S.: 2006, Conditional Cooperation: Behavioral Regularities from the Lab and the Field and Their Policy Implications, Mimeo.
Gössling, S., Haglund, L., Kallgren, H., Revahl, M. and Hultman, J.: 2009, Swedish air travellers and voluntary carbon offsets: towards the cocreation of environmental value?, Current Issues in Tourism 12(1), 1–19.
Hardin, R.: 1971, Collective Action as an Agreeable n-Prisoner’s Dilemma, Behavioral Science 16, 472–481.
Hensher, D. A. and Greene, W. H.: 2003, A latent class model for discrete choice analysis: contrasts with mixed logit, Transportation Research Part B 37, 681–698.
Hertwich, E. and Peters, G.: 2009, Carbon Footprint of Nations: A Global, Trade-Linked Analysis, Environmental Science and Technology 43(16), 6414–6420.
Holländer, H.: 1990, A Social Exchange Approach to Voluntary Cooperation, The American Economic Review 80(5), 1157–1167.
House of Commons: 2007, The Voluntary Carbon Offset Market. Sixth Report of Session 2006-07, House of Commons, Environmental Audit Committee.
Kahneman, D.: 1992, Reference points, anchors, norms, and mixed feelings, Organizational Behavior and Human Decision Processes 51(2), 296 – 312.
Kotchen, M. J.: 2006, Green markets and private provision of public goods, Journal of Political Economy 114, 816–834.
Kotchen, M. J.: 2009a, Offsetting Green Guilt, Stanford Social Innovation Review 26–31.
Kotchen, M. J.: 2009b, Voluntary Provision of Public Goods for Bads: A Theory of Environmental Offsets, Economic Journal 119(537), 883–899.
Kotchen, M. J. and Moore, M. R.: 2007, Private provision of environmental public goods: Household participation in green-electricity programs, Journal of Environmental Economics and Management 53, 1–16.
Kotchen, M. J. and Moore, M. R.: 2008, Conservation: From Voluntary Restraint to a Voluntary Price Premium, Environmental and Resource Economics 40, 195–215.
Lange, A. and Ziegler, A.: 2012, Offsetting versus Mitigation Activities to Reduce CO2 Emissions: A Theoretical and Empirical Analysis for the US and Germany, CER-ETH Economics Working Paper Series 12/161.
Ledyard, J. O.: 1995, Handbook of Experimental Economics, Princeton University Press, chapter Public goods: A survey of experimental research, 111–194.
Liebe, U., Preisendörfer, P. and Meyerhoff, J.: 2011, To pay or not to pay: Competing theories to explain individuals’ willingness to pay for public environmental goods, Environment and Behavior 43, 106–130.
Loeschel, A., Sturm, B. and Vogt, C.: 2010, The Demand for Climate Protection - An Empirical Assessment for Germany, ZEW 10-068.
Lütters, H. and Strasdas, W.: 2010, Kompensation von Treibhausgasen - Verbraucherbefragung der Hochschule für nachhaltige Entwicklung (HNE), Presentation.
Lu, J.-L. and Shon, Z. Y.: 2012, Exploring airline passengers’ willingness to pay for carbon offsets, Transportation Research Part D: Transport and Environment 17(2), 124 – 128.
MacKenzie, I. A., Ohndorf, M. and Palmer, C.: 2012, Enforcement-proof contracts with moral hazard in precaution: ensuring ‘permanence’ in carbon sequestration, Oxford Economic Papers 64(2), 350–374.
MacKerron, G. J., Egerton, C., Gaskell, C., Parpia, A. and Mourato, S.: 2009, Willingness to pay for carbon offset certification and co-benefits among (high-) flying young adults in the UK, Energy Policy 37(4), 1372 – 1381.
Mair, J.: 2011, Exploring air travellers’ voluntary carbon-offsetting behaviour, Journal of Sustainable Tourism 19(2), 215–230.
Marschak, J.: 1960, Stanford Symposium on Mathematical Methods in the Social Sciences, Stanford University Press, chapter Binary choice constraints on random utility indications, pp. 312–329.
Martínez-Espiñeira, R. and Lyssenko, N.: 2012, Alternative approaches to dealing with respondent uncertainty in contingent valuation: A comparative analysis, Journal of Environmental Management 93(1), 130 – 139.
McFadden, D.: 1974, Frontiers in Econometrics, Academic Press, chapter Conditional Logit Analysis of Qualitative Choice Behavior, pp. 105–142.
Morey, E., Thacher, J. and Breffle, W.: 2006, Using Angler Characteristics and Attitudinal Data to Identify Environmental Preference Classes: A Latent-Class Model, Environmental and Resource Economics 34, 91–115.
Nyborg, K., Howarth, R. B. and Brekke, K. A.: 2006, Green consumers and public policy: On socially contingent moral motivation, Resource and Energy Economics 28, 351–366.
Nyborg, K. and Rege, M.: 2003, Does public policy crowd out private contributions to public goods?, Public Choice 115, 397–418.
Olson, M.: 1965, The Logic of Collective Action: Public Goods and the Theory of Groups, Harvard University Press.
Peters-Stanley, M. and Hamilton, K.: 2012, Developing Dimension: State of the Voluntary Carbon Markets 2012, Ecosystem Marketplace & Bloomberg New Energy Finance.
Quality Assurance Scheme: 2011, Carbon offset organisations vow to keep quality standard alive, published online on June 30 2011.
Ready, R., Whitehead, J. and Blomquist, G.: 1995, Contingent Valuation When Respondents Are Ambivalent, Journal of Environmental Economics and Management 29(2), 181–196.
Rose, J. M. and Bliemer, M. C. J.: 2009, Constructing Efficient Stated Choice Experimental Designs, Transport Reviews 29(5), 587–617.
Scarpa, R., Thiene, M. and Tempesta, T.: 2007, Latent class count models of total visitation demand: days out hiking in the eastern Alps, Environmental and Resource Economics 38, 447–460.
Schwartz, S. H.: 1970a, Altruism and Helping Behavior. Social Psychological Studies of Some Antecedents and Consequences, Academic Press, chapter Moral decision making and behavior, 127–141.
Schwartz, S. H.: 1970b, Elicitation of moral obligation and self-sacrificing behavior: An experimental study of volunteering to be a bone marrow donor, Journal of Personality and Social Psychology 15, 283–293.
Schwartz, S. H.: 1977, Advances in Experimental Social Psychology, Vol. 10, Academic Press, chapter Normative Influences on Altruism, 221–279.
Schwartz, S. H. and Howard, J. A.: 1981, Altruism and helping behavior: Social, personality, and developmental perspectives, Erlbaum, chapter A normative decision making model of altruism, 189–211.
Schwartz, S. H. and Howard, J. A.: 1984, Development and Maintenance of Prosocial Behavior, Plenum, chapter Internalized Values as Motivators of Altruism, 189–211.
Smith, V. H., Kehoe, M. R. and Cremer, M. E.: 1995, The private provision of public goods: Altruism and voluntary giving, Journal of Public Economics 58, 107–126.
Stern, P. C., Dietz, T., Kalof, L. and Guagnano, G. A.: 1995, Values, Beliefs, and Proenvironmental Action - Attitude Formation toward Emergent Attitude Objects, Journal of Applied Social Psychology 25, 1611–1636.
Sugden, R.: 1982, On the economics of philanthropy, The Economic Journal 92, 341– 350.
Thaler, R.: 1985, Mental Accounting and Consumer Choice, Marketing Science 4, 199–214.
Thaler, R.: 1999, Mental Accounting Matters, Journal of Behavioral Decision Making 12, 183–206.
The Economist: 2007, Another stab at carbon offsets, published online on March 7 2007.
Train, K.: 2003, Discrete Choice Methods with Simulation, Cambridge University Press.
UNEP Finance Initiative: 2008, Making Forests Competitive - Exploring insurance solutions for permanence, UNEP Finance Initiative.
Vicary, S.: 1997, Joint production and the private provision of public goods, Journal of Public Economics 63(3), 429–445.
Vicary, S.: 2000, Donations to a public good in a large economy, European Economic Review 44, 609–618.
Ziegler, A., Schwarzkopf, J. and Hoffmann, V. H.: 2012, Stated versus revealed knowledge: Determinants of offsetting CO2 emissions from fuel consumption in vehicle use, Energy Policy 40, 422 – 431.