Date of Award

Spring 5-10-2019

Level of Access

Open-Access Thesis

Degree Name

Master of Science (MS)

Department

Economics

Advisor

Caroline Noblet

Second Committee Member

Keith Evans

Third Committee Member

Kathleen P. Bell

Additional Committee Members

Bridie McGreavy

Abstract

Over the last few decades, discrete choice experiments (DCEs) have become increasingly popular across different subfields of economics as a way to elicit citizens‟ stated preferences for product and service attributes as well as various environmental and infrastructure features. The DCE framework could be seen as a time- and cost-effective alternative to the revealed preferences framework that is based on data obtained using transactions observed in real-world markets. DCEs offer the advantage over revealed preferences data because they allow learning about consumer preferences for hypothetical products or product attributes without bearing the costs of introducing new products to the market. Past research shows that despite being hypothetical in nature, stated preferences could serve as accurate forecasts of consumer behavior in the real world. In our study, we use discrete choice experiments for elicitation of citizens‟ perceptions and preferences for the aquaculture industry in Maine. The rapid expansion of aquaculture has contributed to changes in seafood markets and the transformation of infrastructure along Maine‟s coast. The industry‟s growth has also led to a growing need for development of policies and effective coastal management programs that would support sustainable growth of the industry and help balance the interests of different groups in Maine‟s coastal areas. This thesis describes two pilot studies that contribute to the body of knowledge about the use of the stated preference approach, and particularly, the discrete choice experiment method for analysis of citizens‟ preferences for aquaculture industry. The first chapter of the thesis describes the analysis of citizens‟ preferences for different seafood attributes as well as the effect of product presentation strategy on consumer choice. The second chapter of the thesis explores the effect of proximity to different types of coastal usage on Maine citizens‟ willingness to pay for coastal homes. Both pilot projects described in this thesis contribute to the body of knowledge about the methodology and study design for elicitation of consumer preferences in the rapidly changing sectors such as the seafood and coastal infrastructure sectors. The research work presented in this thesis was conducted as a part of the Sustainable Ecological Aquaculture Network (SEANET) which is a research grant that serves to promote sustainable aquaculture industry in Maine. The sustainable development of an industry could be characterized by multiple dimensions including environmental, social and economic sustainability. Sustainable development of aquaculture would demand balancing interests of different population groups, promoting industry-related products, services and coastal management programs that would be accepted and supported by general public. Employing the discrete choice experiment method to the analysis of consumer preferences for aquaculture may contribute to the efforts of understanding people‟s needs and wants and minimize the possibility of conflicts of interest in the sector. The findings of both studies described in this thesis could inform Maine‟s aquaculture industry stakeholders and policymakers of Mainers‟ preferences for seafood products and coastal usage, and could facilitate the development of seafood production, and certification standards and coastal management programs that could ensure sustainable expansion of aquaculture practices in Maine. The results of both pilot studies confirm previous research findings about consumer preferences for seafood attributes and coastal usage. Particularly, consistent with previous studies on the topic, we find that Maine‟s consumers prefer wild caught over farm-raised products, locally grown seafood over products imported from other states and abroad, and certified products over non-certified products. Regarding coastal home owners‟ preferences for coastal usage, we find that Maine citizens tend to prefer undeveloped coastal areas to the areas of coastal fishing and aquaculture, with aquaculture being the least preferred type of coastal usage. Our thesis generates interesting findings regarding Maine consumers‟ behavior in response to different product presentation strategies. Furthermore, in our first study, we find that product presentation strategy may have an impact on consumer behavior in some cases, but not in others, and that there may be a link between consumers‟ familiarity with seafood products and their choices in response to different product presentation techniques. In our second study, we find that citizens may exhibit different preferences depending on whether or not they live within proximity to the ocean. Future research would be needed to test our findings on larger datasets, and examine the geographic variation of the trends that we observe. Although both studies are built upon the principles of utility maximization framework and the assumption that individuals are rational and seek to maximize their utility, we acknowledge the complexity of human choice, the potential for respondents‟ irrational decision-making and the possibility of different choce outcomes in response to various choice format and environment characteristics. Such limitations are present in any behavioral experiments and do not diminish the usefulness and applicability of findings and lessons learned throughout this thesis work.

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