Abstract:
The effect of preference uncertainty on estimated willingness to pay (WTP)
is examined using identical payment cards and alternative uncertainty elicitation procedures
in three split samples, focusing on air quality improvement in Nairobi. The effect
of the stochastic payment card (SPC) and polychotomous payment card (PPC) are compared
with a conventional payment card (PC). Substantial financial support is found for
improved air quality in Nairobi, with approximately 85 per cent of the whole sample
stating a positive WTP. The way WTP values are elicited, with and without ability to
express preference uncertainty, has significant effect on WTP welfare estimate. Allowing
respondents to express experienced uncertainty when statingWTP value yields more
conservative but less accurate WTP values for inclusion in policy analysis. The PPC seems
to hold more promise since it is easier to understand and imposes less cognitive burden
on survey participants than the SPC in a developing country context.
