Lumpy Heterogeneity in Groundwater Service Values and Time Preferences

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.