Evaluation of non-market goods: the relevance of considering “behavioural anomalies”

Abstract

Environmental valuation techniques are intended to provide valuable insights in helping scientists and decision-makers to make informed choices about the trade-offs that are inherent to the scarcity restrictions of our daily decisions. However, among other limitations, values obtained on the assumption of a rational behaviour may only be of use for policy guidance if people make consistent and systematic choices. This research embraces the challenge of contributing to organize the complexities of valuation of non-market goods, rather than just ignoring them. We address the ongoing debate on symptoms of bounded rationality in studies applying stated or revealed preferences methods by examining the theoretically consistency of preferences using observed and intended behaviour without monetary values being directly asked. The environmental good considered in our empirical approach is a national wood (Mata do Bussaco), located in a European country (Portugal). Overall, the results reveal that visitors are sensitive to both price and quality changes. In the deterioration scenario, the intended number of trips would be seriously reduced and respondents would suffer an important welfare loss. Another key finding is the apparent inconsistency between preferences expressed by revealed and observed behaviour. As inconsistencies are detected for changes resulting from manager’s action, it is argued that they are likely the outcome of strategic behaviour.