Choice difficulty and risk perceptions in environmental economics
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Date
2010-09
Authors
Duquette, Eric Nigel, 1978-
Journal Title
Journal ISSN
Volume Title
Publisher
University of Oregon
Abstract
Economists typically assume that individuals behave in accordance with rational choice theory. In practice, however, individual behavior can deviate from the predictions of models founded upon basic economic theory. The extent to which these deviations are important to individual decision-making in environmental economics, and thus to the development of sound environmental policies, is not fully understood. The objective in this dissertation research is to investigate potential deviations from rational choice behavior in some environmental economics contexts and to identify their relevance to environmental policy.
Chapter I uses a stated-preference survey for the valuation of environmental health-risk reductions in which respondents rate the subjective difficulty of each key choice they are asked to consider. Existing literature identifies many potential categories of biases in the empirically estimated valuation of non-market goods in stated-preference research. One potential source of bias stems from the "objective complexity" of the choice scenario. I find that existing objective measures of choice set complexity do not fully explain subjective choice difficulty ratings in this valuation survey. Instead, subjective difficulty appears to result from the interplay among objective complexity, preferences, and cognitive resource constraints.
In Chapter II, I consider the possible consequences of choice difficulty from the standpoint of neuroeconomics. Within the scope of neuroeconomics, one can identify some neurobiological correlates of economic decision-making activity. I study the apparent effects of choice difficulty on the neurobiological encoding of individuals' value assessments. Information from this study provides a neurological basis for deviations from simple economic theory based on conventional models of rational choice.
Chapter III examines risk perceptions that may influence individuals' decisions to migrate within the U.S. to reduce potential health and economic risks related to climate change. My analysis treats historical patterns of migration among counties as a function of varying spatial and temporal patterns in tornado activity, along with other spatially and temporally delineated variables intended to capture the evolution of subjective perceptions of these tornado risks. Results suggest that the perception of risk from extreme weather events can have a small but statistically discernible effect on migration behavior across sociodemographic groups for both out-migrants and in-migrants.
Description
xv, 173 p. : ill. (some col.) A print copy of this thesis is available through the UO Libraries. Search the library catalog for the location and call number.
Keywords
Environmental economics, Risk perceptions, Climate change, Migration, Stated-preference surveys, Neuroeconomics, Choice difficulty, Economics, Climatic changes