Open Access

Lumpy Heterogeneity in Groundwater Service Values and Time Preferences

Kent F. Kovacs, Heather Snell, Brandon R. McFadden and Rodolfo M. Nayga Jr.

Abstract

From a choice experiment about groundwater management, we consider time preferences and groundwater service values through socio-demographic characteristics using a model called the discounted latent class model. A policy motivated latent class has a higher income, greater familiarity with an aquifer, and more concern for the risks that groundwater decline poses to people and the environment. A business-as-usual latent class has a conservative ideology. Exponential discounting is preferred, and the discount rate is larger for the policy group than the business-as-usual group. Other models we use include the discounted mixed logit model, and the discounted logit mixed logit model.

This open access article is distributed under the terms of the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0) and is freely available online at: http://le.uwpress.org