Choice modelling and its potential application to tropical rainforest preservation

Abstract

Loss of rainforest occurs in part because of a global market failure problem. Markets routinely transmit signals about international demands for forest products such as timber, but fail to transmit signals about demands for preservation. To make efficient resource allocation choices, decision makers need some framework to estimate the non-use values that might be held by an international community for rainforest preservation. Non-market valuation techniques can be used for this purpose, but framing and other problems limit the application of the contingent valuation method (CVM). An alternative technique, choice modelling (CM), appears to hold some promise because it can be used to model complex situations and to frame choices consistent with 'real life' choices. In this paper a CM experiment to assess the values that Australians hold for rainforest conservation in Vanuatu is reported. The experiment disguises effectively the issue of interest, rainforest conservation in Vanuatu, within a pool of other conservation locations. Also, the experiment demonstrates that choice tradeoffs may involve a variety of environmental and socio-economic factors, rather than be concentrated on some monetary tradeoff. The results demonstrate that a variety of predictive and valuation tools can be gained from a CM experiment, and suggest that further development is warranted. (C) 2000 Elsevier Science B.V. Show more