‘No-choice’ options within a nested logit model: one model is insufficient

Abstract

We examine the impact of providing a ‘no-choice’ option in attribute-based valuation experiments. The aim of the experiment was to assess monetary values of cockle fishery management practices in the Dutch Wadden Sea for different stakeholder groups, namely Dutch citizens, local residents and tourists. The current policy debate about the management of the Wadden Sea stresses the fact that individual preferences with respect to cockle-fishery differ. The aim of this article is to analyse the individual preferences in a objective way. Special attention is given to the influence of including a ‘no-choice option’, which is analysed using a nested logit model. We test whether the full set of options can be considered as close substitutes. The estimation results show that the influence of including the no-choice option differs among the stakeholders considered.

Acknowledgements

This research was supported by the Netherlands Organization for Scientific Research (NWO), under the Priority Program for Sustainable Use of Marine Resources.

Notes

¹ We also interviewed local politicians and natural scientists. However, the resulting samples were too small to make them suitable for inclusion in the analysis here. We also tried to interview the local fishermen, but they refused to participate.

² Source: http://www.waddenvereniging.nl

³ Source: http://www/wildekokkels.nl

⁴ A more detailed interpretation of the signs and significance of the remaining variables is presented in de Blaeij et al . (2004) in paper submitted to the EAERE conference 2004, Budapest.