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Abstract: Despite the vital role of the utility function in welfare measurement, the implications of working with incorrect utility specifications have been largely neglected in the choice experiments literature. This paper addresses the importance of specification with a special emphasis on the effects of mistaken assumptions about the marginal utility of income. Monte Carlo experiments were conducted using different functional forms of utility to generate simulated choices. Multi-Nomial Logit and Mixed Logit models were then estimated on these choices under correct and incorrect assumptions about the true, underlying utility function. Estimated willingness to pay measures from these choice modeling results are then compared with the equivalent measures directly calculated from the true utility specifications. Results show that for the parameter values and functional forms considered, a continuous-quadratic or a discrete-linear attribute specification is a good option regardless of the true effects the attribute has on utility. We also find that mistaken assumptions about preferences over costs magnify attribute mis-specification effects. [Copyright &y& Elsevier]

Environmental cost-benefit analysis has traditionally assumed that the value of benefits is sensitive to their timing and that outcomes are valued higher, the sooner in time they occur following implementation of a project or policy. Though, this assumption might have important implications especially for the social desirability of interventions aiming at counteracting time-persistent environmental problems, whose impacts occur in the long- and very long-term, respectively involving the present and future generations. This study analyzes the time sensitivity of social preferences for preservation policies of adaptation to climate change stresses. Results show that stated preferences are time insensitive, due to sustainability issues: individuals show insignificant differences in benefits they can experience within their own lifetimes compared to those which occur in the longer term, and which will instead be enjoyed by future generations. Whilst these results may be specific to the experimental design employed here, they do raise interesting questions regarding choices over time-persistent environmental problems, particularly in terms of the desirability of interventions which produce longer-term benefits. [ABSTRACT FROM AUTHOR]