PT  - JOURNAL ARTICLE
AU  - Lundhede, Thomas
AU  - Jacobsen, Jette Bredahl
AU  - Hanley, Nick
AU  - Strange, Niels
AU  - Thorsen, Bo Jellesmark
TI  - Incorporating Outcome Uncertainty and Prior Outcome Beliefs in Stated Preferences
AID  - 10.3368/le.91.2.296
DP  - 2015 May 01
TA  - Land Economics
PG  - 296--316
VI  - 91
IP  - 2
4099  - http://le.uwpress.org/content/91/2/296.short
4100  - http://le.uwpress.org/content/91/2/296.full
SO  - Land Econ2015 May 01; 91
AB  - Stated preference studies tell respondents that policies create environmental changes with varying levels of uncertainty. However, respondents may include their own a priori assessments of uncertainty when making choices among policy options. Using a choice experiment eliciting respondents’ preferences for conservation policies under climate change, we find that higher outcome uncertainty reduces utility. When accounting for endogeneity, we find that prior beliefs play a significant role in this cost of uncertainty. Thus, merely stating “objective” levels of outcome uncertainty will not necessarily solve the problem of people valuing something differently from originally intended: respondents’ prior beliefs must be accounted for. (JEL C53, D62)