Title
Reducing gains/loss asymmetry : a virtual reality choice experiment (VRCE) of land use change
Description
Recent research suggests that, in some situations, numeric information may lack the ‘evaluability’ of visual representations of the same data. In such cases, reliance upon numeric information exacerbates tendencies for survey respondents to rely upon heuristics rather than their underlying preferences in formulating responses. Adapting such insights to the field of non-market valuation, for certain environmental goods, information on increases or decreases in the numeric levels of an attributes may trigger reliance upon the loss aversion heuristic, leading to an exacerbation of the well know gains/loss asymmetry problem (Horowitz and McConnell, 2002). A split sample choice experiment (CE) is described in which standard approaches to conveying a land use change scenario (relying principally on numeric information) are contrasted with an alternative treatment in which objectively identical information is presented in visual form via virtual reality (VR) visualisations. A third treatment combines both formats. Results show that the gains/loss asymmetry is roughly twice as strong under a conventional numeric CE design than in the presence of visual information. The combined VRCE methodology developed in the paper therefore significantly ameliorates this pervasive anomaly and, we contend, represents an exciting prospect for the incorporation of complex real world environments within economic analyses.
URL
http://www.webmeets.com/ERE/WC3/Prog/
URL Description
Conference programme
Language
English
Author
Ian Julian Bateman
Author
Andy P. Jones
Author
Brett Day
Author
Simon Jude

experimental economics; choice experiments; coastal zones; gains/loss asymmetry; land use change; loss aversion; non-market valuation; virtual reality; land use; choice

Body involved
EAERE, AERE and the Society of Environmental Economics and Policy Studies (SEEPS)
Is this item peer reviewed?
No
Body involved role
Organisers
Conference event title
World congress of environmental and resource economists
ConferenceLocation
Kyoto, Japan
Conference number
3rd