Relative income and the WTP for public goods

Transcription

1 CERE Workng Paper, 2014:6 Relatve ncome and the WTP for publc goods - A case study of forest conservaton n Sweden Thomas Broberg Centre for Envronmental and Resource Economcs, Umeå Unversty, Sweden The Centre for Envronmental and Resource Economcs (CERE) s an nter-dscplnary and nter-unversty research centre at the Umeå Campus: Umeå Unversty and the Swedsh Unversty of Agrcultural Scences. The man objectves wth the Centre are to te together research groups at the dfferent departments and unverstes; provde semnars and workshops wthn the feld of envronmental & resource economcs and management; and consttute a platform for a creatve and strong research envronment wthn the feld. Department of Economcs, Umeå Unversty, S , Umeå, Sweden

2 Relatve ncome and the WTP for publc goods - A case study of forest conservaton n Sweden Thomas Broberg Centre for Envronmental and Resource Economcs, Umeå Unversty, Sweden Abstract The man objectve wth ths paper s to test the hypothess that peoples stated WTP for an envronmental publc good (old growth forest n Sweden) are senstve to the respondents relatve ncome. To do that I use an expermental valuaton queston n a splt-sample settng, condtonng the respondents on hypothetcal changes n ther absolute and relatve ncome. The results ndcate that the relevant ncome measure may not only be the ncome level per se, but also the ncome level relatve to others. People wth green atttudes and males react more strongly to changes n ther relatve poston than others. The results stress that growth n ncomes may not be a guaranty for growth n WTP, the dstrbuton of growth also matter. Keywords: contngent valuaton; ncome-effect; socal responsblty; relatve ncome. JEL-Codes: C81, D12, D31, D64, Q20

3 1. Introducton In contngent valuaton (CV) studes ncome s often ncluded as a covarate n the estmated WTP-functon. A farly smple justfcaton test of estmates of WTP for envronmental goods s to check ther consstency wth economc theory and a pror expectatons. Expectatons concernng the relatonshp between WTP and ncome may be founded n expectatons about how the margnal utlty of money (prvate consumpton) vares over ncome levels (Haab and McConnell, 2002). If the margnal utlty of money s decreasng wth the ncome level, rch people are expected to state a hgher WTP compared to poor people. The ncome level s also one of the man factors that determnes a person s budget constrant, and hence, her ablty to pay. The mportance of the ablty to pay has been manfested n suggestons and practses to (1) remnd respondents about budget constrants and substtutes (Arrow et al., 1993), (2) model assumptons that constran WTP by the respondent s ncome level (Hanemann and Kannnen, 1999; Haab and McConnell, 2002) and (3) remove outler responses where the stated WTP consttutes a large fracton of the respondent s ncome (Freeman, 2003). In the prevous lterature ncome, ndependent of other ndvduals ncomes and consumpton patterns, has been judged as the relevant varable to study (Schläpfer, 2006). It has also been shown that the statstcal relevance of ncludng ncome n the WTPfuncton s senstve to the ncome measure used (Broberg, 2010). Ths paper contrbutes to the prevous lterature on the emprcal relatonshp between WTP and ncome by studyng the relevance of the relatve ncome. The a pror hypothess s that not only the absolute level of ncome matters to an ndvdual when she s asked to state her WTP for an envronmental publc good, but also her ncome relatve to other ndvduals. Sgnfcant support for the hypothess would stress that an ncrease n ablty to pay not automatcally transforms nto an ncrease n WTP and that the ncome dstrbuton may be relevant to consder n non-market valuaton. The relatve ncome has hstorcally receved lttle attenton n manstream economcs where consumpton and savngs are ndependent of context. However, socal comparson has ganed some attenton n the feld of happness research. Some argue that socal comparson s a potental explanaton of the Easterln paradox of unchanged happness n developed countres despte substantal growth n real ncome levels (see a throughout revew of the lterature n Clark et al., 2008). The relatve ncome level has also receved some attenton n the feld of publc economcs. The assumpton of context ndependence was challenged already n Duesenbury (1949) who analyzed the mplcatons of demonstraton and habtaton effects on consumpton and savng rates. Hrsh (1976) and 1

4 Frank (1985) extended the theory by defnng postonal and nonpostonal goods. The term postonal refers to the goods ablty to sgnal socal status. The latter study showed theoretcally that f preferences are nterdependent,.e. ndvduals consumpton depends on other ndvduals consumpton, then the demand for nonpostonal goods wll be lower f ndvduals act ndependently than f they act co-operatvely. In the co-operatve case they realze that ther consumpton gve rse to externaltes that affect other ndvduals consumpton decsons and hence consume less of the postonal good. Few studes exst n the feld of envronmental economcs that study the relevance of takng the relatve ncome nto consderaton. One excepton s Magnan (1999) who analyzes whether or not the demand for envronmental qualty s affected by relatvencome effects on an aggregate level. The startng pont for her study was the observaton of dfferences n envronmental degradaton across hgh-ncome countres (wth majorty votng systems). After examnng cross-country data she concluded that economc growth has two effects on envronmental preferences: 1) an absolute ncome effect 2) a relatvencome effect. The frst effect s due to the ndvdual s ablty to pay and s strctly postve. The second effect s due to the ndvdual s wllngness to pay and s not necessarly postve, t can be negatve. As a consequence, economc growth n tself s not a suffcent condton for envronmental mprovement, also ncome dstrbuton matters. To be sure that economc growth has postve effects on the envronment the ncreasng ncome has to be equally dstrbuted. However, other studes usng aggregated household data have found that equalty may ncrease emssons (Brännlund and Ghalwash, 2008). In ths paper the relevance of relatve ncome s analyzed on the mcro level. To study the mportance of relatve ncome, I examne CV data concernng preservaton of old-growth forest n Sweden. Specfcally, I adopt a splt-sample approach to study how ndvduals beleve that they would change ther WTP as ther absolute and relatve ncome changes. As the valuaton concerns provson of a publc good n fxed quantty, WTP rather than demand s n focus of ths study. The relatve ncome may nfluence WTP for publc goods through ndvduals perceptons about socal responsbltes and far-payments and ther propensty to free-rde on other tax-payers. In a recent study Brännlund and Persson (2012) apply the stated choce experment approach to elct WTP for dfferent aspects of clmate polcy measure and fnd that Swedes have preferences for clmate polcy nstrument havng a dstrbuton of costs that s progressve n ncome. One possble nterpretaton of ths result s that relatve ncome does matter when people decde on ther WTP for envronmental goods. 2

5 The paper s structured as follows. Secton 2 provdes a bref presentaton of a conceptual theoretcal framework ncludng a moral context. Secton 3 descrbes the survey and presents descrptve statstcs. The econometrc model s presented n Secton 4 and the results n Secton 5. Fnally, Secton 6 concludes the paper. 2. Theory and descrpton of the experment The present analyss of relatve ncome s based on the broader hypothess that moralty plays a sgnfcant role n the decson of how much to pay for envronmental publc goods. In the splt-sample experment presented n ths paper people are asked to state ther WTP for an envronmental publc good, namely preservaton of old-growth forests. Followng Levtt and Lst (2007) the moral context can be descrbed by the followng conceptual utlty functon: U ( a, v, n, s) W ( a, v) M ( a, v, n, s) (1) Ths functon says that ndvdual derve utlty from a sngle choce of acton (a) through both a wealth effect (W) and a moral effect (M). In the present case (a) s the decson on how much to pay for preservng vrgn forests. The moral effect s a functon of the stakes (v) and how the ndvdual magnes that her acton wll be scrutnzed (S). For example, t can be assumed that more attenton s gven to the wealth effect as the stakes get larger and that ndvduals are more lkely to comply wth socal norms f they beleve that ther behavor s beng observed and judged. The moral effect s also a functon of socal norms (n) that n turn may be a functon of relatve ncome. People may, e.g., feel a socal responsblty and an oblgaton to pay for conservng vrgn nature and the perceved oblgaton to pay may be a functon of relatve ncome, such that, when ther relatve poston worsens ther sense of oblgaton weakens. In order to test the hypothess regardng relatve ncome and WTP, I desgned a smple splt-sample experment. The respondents were dvded nto two groups where one group was contngent on an ncome ncrease that kept ther relatve ncome unchanged, whle the second group was contngent on a hgher absolute ncome, but a lower relatve ncome. Throughout ths paper the groups wll be referred to as neutral and dscouraged. 3

6 3. The survey and descrptve statstcs The dataset concerns Swedes WTP for preservaton of old-growth forests. Sweden s total land area s approxmately 41 mllon hectares, wth ffty percent covered by boreal forests domnated by Scots pne (Pnus Sylvestrs) and Norway spruce (Pcea Abes). Accordng to the Swedsh Forestry Agency, about 18 percent of the forest area s owned by the State. Almost all of the old-growth forests n Sweden belong to the state and are manly concentrated n the sparsely populated sub-mountanous area n Northwestern Sweden (shaded area n Fgure 1). A rather large part, 43% or 660,000 hectares, of the old-growth forests n sub-mountanous area was already protected n In 2002 the Swedsh Envronmental Protecton Agency was commssoned by the government to assess the envronmental value of the State s forests, wth a focus on old-growth forests. The results from the forest assessment was publshed n 2004 and concluded that there were an addtonal 126,000 hectares (8 percent) of productve old-growth forest n the sub-mountanous regon worthy of addtonal preservaton. A survey was sent out n the fall of 2005 wth the man objectve to study atttudes toward forest preservaton among the Swedsh populaton and ultmately to estmate the mean WTP for mplementng the preservaton program descrbed above. The sample ncluded 2,000 ndvduals between the ages of 18 and 84. The study reled on stratfcaton to assure selecton of ndvduals lvng n muncpaltes near the studed forest areas. In total the response rate was 49 percent, ncludng 2.5 percent blank survey responses. The dataset ncludes 922 consstent responses. 1 Fgure 1: Sub-mountanous area of Sweden (Source: The Swedsh envronmental protecton agency) 1 Two weeks after the frst mal-out a remander was sent out. Non-respondents were contacted va telephone and asked for ther reasons for not answerng the mal survey. Lazness and tme-constrants were the most common reasons. 4

7 Broberg (2007) used the same dataset, as used n ths study, and estmated the mean WTP for mplementng the forest preservaton program. The mean WTP based on estmaton of a spke model, whch allowed for zero WTP, was approxmately SEK 300 (approxmately 33). The study found that the WTP was sgnfcantly correlated wth ncome and envronmental awareness. In addton to an ordnary WTP queston the respondents were also asked to state how they would change ther WTP f ther monthly ncome after tax would ncrease by SEK 1,000 (approxmately 110). A splt-sample approach ncludng two samples was adopted. Both groups (samples) were gven the same nformaton about the change of ther personal ncome, but dfferent nformaton about the change n average ncome n Sweden. The average ncome were sad to ncrease wth SEK 1000 n one of the subsamples and wth SEK 2000 n the other. Hence, the relatve ncome was unchanged for the frst group whereas t decreased for the second group. Ths paper analyzes the answer to the follow-up queston concernng how the respondents would change ther WTP gven a hypothetcal ncome change. The follow-up queston was drected to respondents who stated a postve WTP, gven ther current budget constrant, and respondents who had zero WTP but sad they were wllng to pay f ther budget allowed for t. Table 1 presents descrptve statstcs for the varables used n the emprcal analyss. The follow-up queston was dvded nto three stages. Frst, the respondents were asked f they would pay anythng at all gven ther new hypothetcal budget constrant. The respondents who answered yes got to answer how they would change ther WTP (stated earler n the survey): ncrease decrease or not change. Respondents ndcatng that they would change ther WTP were asked to mark the hghest change they would accept on a pre-specfed payment card ncludng 16 dfferent amounts, rangng between SEK 10 and SEK 2,500. 5

8 Table 1: Descrptve statstcs for the aggregated sample and specfc samples. Mean values (standard devaton) Varables Whole sample (922 obs.) Age (16.81) Male (Yes=1) Income (16 categores) Green a (Yes=1) Lower WTP bound (Gven WTP>0) 0.50 (0.50) 5.40 (3.11) 0.33 (0.47) (643.42) Neutral (448 obs.) (16.95) 0.50 (0.50) 5.31 (2.92) 0.34 (0.47) (555.02) a If = 1: Respondent wants the government to ncrease ts envronmental expendtures Dscouraged (474 obs.) (16.70) 0.49 (0.50) 5.48 (3.28) 0.34 (0.47) (715.48) Table 2 presents descrptve statstcs for the two groups concernng ther responses to the follow-up queston. As shown a hgh percentage of the respondents that stated a postve WTP gven ther current budget answered that they would contnue to have a postve WTP f ther ncome would ncrease. However, the numbers of no responses are hgher wthn the dscouraged group. One reason why respondents leave the market when ther relatve economc status worsens could be that they beleve that those gettng relatvely rcher should pay more,.e. ndvduals may feel that there s a relatonshp between socal responsblty and relatve standng. More dffcult to explan s the ten respondents n the neutral group that leave the market f the ncome of all ctzens n the economy ncreases wth an equal amount. Once agan, perceptons about payment responsblty may matter, but also the perceptons about the relatve growth of ther personal ncome level. It s also possble that ndvduals protested aganst the hypothetcal settng by gvng seemngly strange answers. Concernng the ndvduals that sad they were not wllng to pay n the frst valuaton queston, only a small fracton of them ncrease ther WTP when gven the hypothetcal ncrease n ncome. The fracton s smaller wthn the dscouraged group. The result s nterestng for two reasons. Frst, the relatve ncome seems, agan, to matter. Secondly, the majorty of the respondents referrng to ther tght budget constrant when answerng no to the valuaton queston dd not change ther answer when they were gven a relatvely large hypothetcal ncome ncrease. One explanaton for ths may be that some people found t easer to refer to ther budget constrant than to smply say I don t care,.e. they gave answers that were socally comfortable to them. In Table 3 we see that many respondents would ncrease ther WTP f ther ncome was about to ncrease as descrbed n the valuaton scenaro. However, a larger fracton of the 6

9 respondents wthn the dscouraged group stated that they would leave ther WTP unchanged, or even decrease t, compared to the neutral group. Table 3 further ndcates that respondents do react on changes n ther relatve standng. Table 4 presents descrptve statstcs for the payment card queston concernng the hghest change n WTP that the respondents would accept gven the ncome ncrease. The value presented s the mean of the lower bound of the ndcated change-categores. A comparson of the two groups further ndcates that relatve ncome matters to the respondents. The average ncrease s smaller wthn the dscouraged group compared to the neutral. Table 2: Descrptve statstcs for responses to the frst step of the follow-up WTP queston concernng f WTP>0 contngent on the ncrease n ncome. Responses are categorzed n terms of whether respondents had a postve WTP pror to the hypothetcal change n ncome. All Neutral Dscourag ed Sample sze 2,00 1,000 1,000 0 Responses Respondents wth postve WTP gven the ntal scenaro Yes No Mssng Total Respondents wth Zero WTP gven the ntal scenaro Yes No Mssng Total

10 Table 3: Change n WTP n case of an ncreased ncome level. Number of observatons. All Neutral Dscourag ed Increase Decreas e Not change Mssng Total Table 4: Lower bound of the change n WTP contngent on an ncreased ncome level. Mean values (standard devatons). All Neutral Dscouraged Increase (435.94) Decrease (340.14) Total (364.83) (427.82) (451.53) -- * (358.54) (382.66) (339.78) Mssng *Only two observatons 4. The econometrc model To analyse the change n WTP followng the hypothetcal ncome change, an nterval estmaton approach (Cameron and Huppert, 1989) s appled. The change n WTP s modelled as a lnear combnaton of personal characterstcs, X, a dummy for the hypothetcal change n average ncome, DY A (equals one f respondents belong to the dscouraged group and zero otherwse) and an addtve stochastc term, υ: Y WTP X DY (2) A An ndvdual wll reject payng more for the envronmental good f the cost (n our case a tax ncrease), A, s larger than the change n WTP followng the change n ncome. Hence; Pr( WTP Y A ) Pr( X DYA A ) (3) 8

11 Denotng the cumulatve dstrbuton of the change n WTP wth F(υ), Eq.(3) can be wrtten as: Pr ( WTP Y A ) F( (4) Hence, the probablty of acceptng a tax change s 1- F(. The probablty that ( WTP Y ) les between the bounds gven by the double-bounded data ( A L and A Lu ) can be wrtten as: Pr( WTP ( A, A )) F( ) F( ) (5) Y L U U L where η s the standardzed error term (υ/σ). When specfyng the log-lkelhood functon t should be consdered that ndvduals may not want to change ther WTP gven the hypothetcal ncome change and, therefore, a spke at zero WTP change s ntroduced that allows such answers. The nterval spke model s gven by 2 : L N k ln F ( ) F( ) (1 k ) ln( F(0) U L 1 (6) where k equals one f the ndvdual stated a postve change n WTP and zero for no change responses Results Table 5 presents results derved from estmaton of the spke model gven by Eq. (6), explanng the sze of the change n WTP condtoned on the hypothetcal ncome change. The regresson model s appled on all the respondents who answered the splt-sample queston and also separately on those who sad they were wllng to pay gven ther current ncome. Note that ths model excludes respondents that would decrease ther WTP 2 Spke models appled on WTP data allowng for zero WTP can be found n Krström (1997) and Nahuelhual-Munoz et al. (2004). Yoo & Kwak (2002) extend the DC spke model n Krström (1997) to the case wth double bounded DC. 3 The small number of decrease answers have been excluded from the analyss. Ths wll bas the estmate of the change upwards. If the data had allowed for t, an extended spke model ncludng such answers could have been estmated. 9

12 gven the new scenaro. The results n Table 5 are based on a model ncludng only one covarate, the dscouraged dummy. The results for both the whole sample and the subsample consstng of respondents wth a postve WTP show that people react sgnfcantly to the socal context presented n the valuaton scenaro. The dscouraged dummy s negatve and hghly sgnfcant. Table 6 presents estmates of the change n WTP contngent on the hypothetcal ncome change, based on the estmates of Model 1 n Table 5. As can be seen, the ncrease n WTP s smaller wthn the dscouraged group. However, the dfferences between the splt-sample groups are statstcally sgnfcant (on the fve percent level) only for those who had stated a postve WTP (n the ntal scenaro). Table 5: Spke model on the change of WTP contngent on the hypothetcal ncome change. Parameter estmates (standard devatons) Varables Constant *** WTP 0 ntal scenaro Model 1a WTP (0.135) Dscouraged *** (0.206) Bd *** (0.000) WTP > 0 ntal scenaro Model 1b WTP (0.170) *** (0.252) *** (0.000) Χ 2 1,265 *** *** NOBS *, **, *** ndcates f the estmates are sgnfcant on the 10, 5 and 1 percent level Table 6: Mean WTP contngent on the hypothetcal ncome change (Standard devatons) WTP unchanged relatve ncome (n SEK) WTP decreased relatve ncome (n SEK) Whole sample 144 (19) 85 (13) Part sample (WTP > 0) 248 (34) 130 (23) The results from more detaled models ncludng several covarates are presented n Table 7. To study whether dfferent types of ndvduals react dfferently to the hypothetcal change n ther relatve ncome, nteracton terms are also ncluded. The dfference between Model 2 and Model 3 s the ncluson of the respondents WTP (n the ntal scenaro wthout any change n ncome), whch to some degree s determned by other covarates n the model (e.g. age, gender and ncome). However, ths covarate s relevant to study because t also captures factors unobservable to the researcher, e.g. atttudes and perceptons about socal responsblty and far payments. 4 4 There seems not to be any serous co-lnearty problem n the model. The hghest correlaton coeffcent s 0.16 and concerns the correlaton between the varables WTP and green. 10

13 In Table 7 t can be seen that the ncrease n WTP s postvely correlated wth respondents atttudes toward publc expendtures on the envronment ( green ) and ther WTP (n the ntal scenaro), wth the correspondng nteracton terms beng negatve. These fndngs ndcate that the effects are smaller wthn the dscouraged group. Ths supports the noton that the unobservable characterstcs of respondents, captured by the WTP varable, also covers perceptons about far payments. The results also show that males wthn the dscouraged group tend to state smaller ncreases compared to females, whch would ndcate that males react stronger to the socal context manfested n the relatve ncome change. The estmates of Model 2b and Model 3b show that the results reman stable when the same model s regressed only on those who stated a strctly postve WTP (n the ntal scenaro). The only estmate that changes substantally s the estmates of the age parameter whch n that case s statstcally sgnfcant. 11

14 Table 7: Spke model on the change of WTP contngent on the hypothetcal ncome change. Parameter estmates (standard devatons) Varables WTP 0 ntal scenaro Model 2a WTP Constant *** (0.549) Age (0.009) Male (0.291) Income (0.050) Green *** (0.296) Model 3a WTP ** (0.583) (0.009) (0.295) (0.052) *** (0.302) WTP *** Dscouraged (0.829) Dscouraged Age (0.013) Dscouraged Male ** (0.475) Dscouraged Income (0.076) Dscouraged Green ** (0.437) (0.000) (0.851) (0.014) * (0.472) (0.077) (0.449) Dscouraged WTP ** Bd *** (0.000) (0.000) *** (0.000) WTP > 0 ntal scenaro Model 2b WTP ** (0.751) * (0.012) (0.371) (0.060) ** (0.383) Model 3b WTP *** (0.797) ** (0.012) (0.371) (0.062) * (0.376) *** (1.087) (0.017) ** (0.602) (0.090) ** (0.555) (0.000) (1.144) (0.018) ** (0.600) (0.091) * (0.563) *** (0.0006) *** (0.000) *** (0.000) Χ 2 1,170 *** 1,140 *** *** 1,050 *** LL AIC NOBS *, **, *** ndcates f the estmates are sgnfcant on the 10, 5 and 1 percent level

15 6. Dscusson and Concludng remarks The analyss n ths paper focuses on the relevance of consderng socal context aspects of the valuaton scenaro when studyng the relatonshp between WTP and ncome. Specfcally, the paper analyzes the relevance of respondents relatve ncome level. To study the relevance of relatve ncome, ths paper apples a splt-sample approach, usng survey data concernng preservaton of old-growth forest n Sweden. An expermental CV queston asked respondents how they would change ther WTP (stated earler n the survey) f ther absolute ncome and the average ncome n Sweden were to ncrease by a specfc amount. Two samples were compared, both condtoned on the same ncrease n personal ncome, but on dfferent nformaton about the change n average ncome. The results from the analyss ndcate that respondents react on the socal context gven n the valuaton scenaro, wth greens and males havng a stronger reacton than others. Respondents who were asked to consder a decrease n ther relatve ncome stated a lower ncrease n WTP (on average) compared to those whose relatve ncome remaned unchanged, all else equal. The estmated models ncluded the respondents WTP (n the ntal scenaro) as a covarate. Respondents who stated a hgh WTP also stated a hgh ncrease n ther WTP gven that ther hypothetcal ncome ncreased. However, when ther hypothetcal relatve ncome decreased, they stated a smaller ncrease n WTP. From the analyss n ths paper t s not possble to study why some respondents react stronger than others to the hypothetcal ncome change. However, the results ndcate that respondents react to nformaton (change n the average ncome n Sweden) whch accordng to the conventonal CV lterature should be rrelevant to them. Even though an ndvdual s ncome level s an mportant determnant of WTP, t s not ndependent of the socal context. In other words, people seem to have perceptons about who should pay for publc goods, whch mples that an ncrease n ncome does not necessarly mply an ncrease n WTP. Ths paper asked about WTP for a good that many respondents conceve as a genune publc good: the preservaton of bodversty wthn a vrgn forest that provdes value almost exclusvely from ts nonuse attrbutes. Many respondents stated that ther man motve for valung the preservaton program was ther desre to conserve vrgn nature for future generatons. One nterpretaton of the results s that peoples perceved oblgaton to pay for conservng vrgn nature s a functon of ther relatve ncome, such that, when ther relatve poston worsens ther sense of oblgaton weakens. Ths mples that the ncome-effect on the WTP for publc goods s more 13

16 complcated than suggested n the conventonal CV lterature. It also mples that valuaton of publc goods s not ndependent of the socal context descrbed to respondents n the valuaton scenaro. The results are n lne wth the fndngs n Brännlund and Persson (2012) that Swedes have preferences for envronmental polcy nstrument that have a dstrbuton of costs that s progressve n ncome. Contngent valuaton estmates of WTP have been found to suffer from hypothetcal bas (see Ready et al., 2010 for a revew of lterature). Whle the exact numbers of WTP may be based, I beleve that the dfferences between the sub-samples and groups of respondents are more relable and reveal nformaton from whch we can draw some cautous conclusons. The results have relevance for beneft transfers across regons and over tme as they suggest that growth n ncomes may not be a guaranty for growth n WTP, the dstrbuton of growth also matter. In the future, studes examnng the ncome-effect on WTP should more carefully descrbe ther choces of ncome measure and modellng assumptons and further study the nfluence of the socal context,.e. n what degree an ndvdual s WTP s nfluenced by the ncome levels and contrbutons of other ndvduals. Also, studes expermentng wth the socal context need to address desgn ssues of CV questons and obtan a better understandng of the workngs behnd the responses. 14

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