The temporal stability of WTP estimates for the emissions reduction using the contingent valuation survey in Queensland, Australia

Abstract

Abstract The temporal stability of willingness to pay (WTP) estimates, from contingent valuation method (CVM) surveys, is required for reliable benefit transfer. While there have been numerous tests of the temporal stability of WTP estimates over a short time period, the evidence of the stability of WTP estimates over a long time period is limited. In this study, the temporal stability of WTP estimates for the emissions reduction over a ten-year period in Queensland, Australia is assessed. The first survey was conducted in 2009 at the end of the global financial and economic crises. The second survey was conducted in 2018 when the economic background changed significantly. The paper is focused on two main questions: (1) whether WTP is stable over a long time period under the changes in the background economic conditions and (2) if WTP is not stable, whether it is due to changes in socio-economic characteristics or underlying preferences. The results indicate that CVM estimates of WTP for emission reduction are stable over a ten-year period even after changes in underlying socio-economic conditions. However, care should be taken when transferring the estimates under the changes in the business cycle due to possible changes in WTP distribution.