![]() Differences in welfare estimates resulting from the use of different cost vectors might change outcomes of cost-benefit analyses. We find weak support that marginal WTP of lower income respondents is affected differently compared to higher income respondents through the use of different cost vectors. After accounting for the differential use of a decision strategy that might not be consistent with random utility modelling, cost vectors that are higher in magnitude result in higher WTP, consistent with an anchoring hypothesis. A key finding is that the choice of cost vectors can affect the incidence of decision strategies. ![]() ![]() This case study employs a split sample approach with three different cost vectors that vary considerably in the cost levels offered to respondents, and investigates differences between treatments with respect to marginal WTP estimates, status quo choice, use of decision strategies and attribute non-attendance. We present a conceptual framework that describes why cost vector effects might occur in choice experiments, and investigate cost vector effects empirically drawing on data from a choice experiment in the context of peatland restoration in Scotland. ![]() Despite this central importance, there are only few investigations into the impact of the design of the cost attribute vector on choices and WTP estimates. The estimation of marginal utility of income in discrete choice experiments is of crucial importance for the estimation of willingness to pay (WTP) and welfare estimates. ![]()
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