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Abstract
The incentives that motivate respondents to reveal their preferences truthfully have
been a long-standing area of research in the non-market valuation literature. A
number of studies have been undertaken to investigate incentive compatibility in nonmarket
valuation. Most of these used laboratory environments rather than field
surveys (e.g. Carson and Burton, 2008, Harrison, 2007, Lusk and Schroeder, 2004,
Racevskis and Lupi, 2008). Only a few studies investigating incentive compatibility
have considered multi-attribute public goods with an explicit provision rule in a
choice experiment (Carson and Groves, 2007, Collins and Vossler, 2009, Carson and
Burton, 2008).
The design of a choice modelling study that avoids strategic behaviour has proven
particularly difficult because of multiple choices and difficulties in developing a
majority voting provision rule.
This study investigates the impact of the inclusion of a framing statement for
incentive compatibility in a field survey choice modelling study. An incentive
compatible statement (provision rule) that sets out to respondents the rule relating to
when the good under consideration will be provided was employed. The impact of a
provision rule across three alternative choice modelling multiple choice
questionnaires was tested by comparing results between split samples with and
without a provision rule. Four split samples were used to test the impact of a provision
rule on preferences across different communities including local/rural residents and
distant/urban residents. A choice modelling analysis that involved a conditional logit
model and a random parameter model was used to elicit household willingness to pay
for improvements in environmental quality in the Hawkesbury-Nepean catchment.
The results of the study show that the inclusion of a provision rule had an effect on
preferences in the distant/urban communities. However, the impact of a provision rule
in the local/rural community sub-samples was negligible. This study suggests that the
impact of a provision rule should be analysed in the context of different community
characteristics.