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Conjoint Analysis Conjoint Analysis surveys should be performed to provide a systematic procedure to measure the valuation of goods without market price. A general understanding of people’s relationship with Narragansett Bay is necessary in order to conduct a proper conjoint analysis.
Background Information: Narragansett Bay is a 28-mile bay that extends from the North Atlantic into the heart of Rhode Island. The bay virtually divides the state into two pieces; therefore, it plays a vital role in the economic and social structure of the state. Rhode Island’s fishing and recreation industries, as well as its chief ports, Providence and Newport, are serviced by Narragansett Bay. Pollution from inadequate sewage facilities and the impact of industry has caused parts of the Bay and at times the entire Bay to be closed to fishermen and/or recreational use. Rainfalls of more than a half-inch result in an overflow of raw sewage from overused waste treatment runoff systems into the Bay.
Description of the Analysis: The goal of this analysis is to determine the social value people place on each of the proposed scenarios. Each scenario proposes different levels of the vital aspects of the Bay. Through people’s rating of these scenarios we can estimate the worth each scenario presents to the community and develop a plan to improve the Bay’s conditions depending on what the results show to be important to the people surveyed. In a conjoint analysis it is important to include people who represent both use values and nonuse values. Those who have use values are the people who come into direct contact with the Bay or its waterfront. The people who have nonuse values are not directly related to the Bay, but still value the general condition of the environment. People who would be surveyed would include fishermen (commercial, recreational), tourists, waterfront businesses, private residents, and the people who don’t use the Bay, but still value it as an environmental asset. Two hundred people from each of the sectors would be asked to participate in the analysis. We would select these people because they represent a wide variety of people who engage in the activities the Bay provides.
Demographic Information:
$35,000-$74,999 [ ] $75,000 and over [ ] Recreational [ ] Occupational [ ] Residential [ ] Nonuse [ ] It is important to get an idea of who is responding to the survey in order to properly assess the value of their answers, but we must make sure we do not bombard them with so many questions that they are hesitant to respond to our survey. We chose these questions because they provide us with important information concerning who uses the Bay and who benefits from the Bay. Age and Gender provides us with relevant responses that are quick and simple to answer. They will provide us with information telling us whom local businesses and tourist attractions should be targeting with their advertising campaigns. The hometown question is important because it gives us an idea about how far people are traveling and from this we can calculate the travel costs they incur. The travel costs are another monetary value for measuring the use values. The salary question gives us an idea about the financial background of the people we are surveying. The most important question in this section is the respondent’s relationship to Narragansett Bay because it tells us why these people value the Bay. The last question gives us an idea about whether they vacation in other spots and whether they are willing to vacation elsewhere if the condition of the Bay continues to deteriorate.
Scenarios: We would ask each person surveyed to rate each scenario based on his or her personal preferences. They would be asked to assign each scenario a number 1 through 10, 1 meaning this scenario is not desirable to them and 10 meaning it is very desirable to them. The following variables would be evaluated: water quality (pollution level), restriction level of fishing, tourism revenue, property value, and biodiversity. The water quality attribute is the independent variable that determines the reaction of the other attributes. Definitions of each variable would be provided to ensure that the participants understand what they are rating. Water quality- general cleanliness, benefits to beach goers, levels of recreational health hazards, and biodiversity of the Bay Fishing restrictions- amount of the Bay that is closed to fishing (a vital part of the local economy) Tourism revenue- dollar amount of revenue collected from waterfront business and water related activities Beach permits- dollar amount for the use the beach for the day Each participant would be given a survey with a selection of 4 scenarios from the following list. One of the 4 scenarios would be the status quo and 3 random scenarios would be chosen to accompany the status quo scenario
Possible Scenarios: 1. Status quo for each category, moderate pollution, Bay completely open for fishing unless rainfall over ½ inch, $400000/day tourism revenue, $5 beach permit. 2. High Pollution, Bay half closed to fishing, $320000/day tourism revenue, $2 beach permit. 3. Very High Pollution, Bay closed for fishing, $250000/day tourism revenue, Free beach use. 4. Extremely Hazardous Pollution, Bay closed for fishing, $100000/day tourism revenue, Free beach use 5. Low Pollution, Bay completely open for fishing at all times, $420000/day tourism revenue, $5 Beach permit 6. Very Low Pollution, Bay completely open for fishing at all times, $500000/day tourism revenue, $7 Beach permit 7. Lowest Feasible Pollution, Bay completely open for fishing at all times, $500000/day tourism revenue, $10 Beach permit |