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The main objective of this study was to investigate the effects of the Big Five personality domains on WTP statements in contingent valuation surveys. The theoretical foundation for this investigation was developed in Chapter 4, which described how insights obtained from the Big Five model were integrated into the CVM framework and the theoretical predictions regarding the effects of each of the five personality domains on WTP statements. The empirical measurement of the domains using the NEO-FFI, as presented in the last section, resulted in domain scores which could then be used to test the theoretical predictions made previously. The results of this empirical test constitute the main content of this section.

The investigation described in this section made use of the probit and tobit regression models for the WTP decisions introduced in section 2.3.2. Based on these models, those variables that were systematically associated with the stated WTPs, i.e. the WTP determinants, could be identified. In order to test if the Big Five personality domains are a determinant of WTP statements, the Big Five scales were included as the core independent variables of the probit and tobit regression models. In addition, several socio-economic and attitudinal variables were also included in the models, for two reasons, first, so that their effects on WTP statements could be controlled, and two, so that it would be possible to check for the plausibility of the WTP statements. Plausible WTP data formed an important basis for an analysis of the relationship between personality and WTP statements, but as previously discussed, one of the main difficulties arising from the hypothetical nature of the CVM is the lack of any criterion able to be used to verify its results. By making predictions on how certain respondent characteristics would affect the stated WTP, the CVM results could be validated to a certain extent. In the following section,

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the socio-economic and attitudinal variables that were included in the probit and tobit models will be introduced, and their expected influence on the stated WTPs will be discussed.

To begin with, general socio-economic variables such as the sex and age of the respondents (SEX and AGE) were expected to vary systematically with stated WTP, whereas the number of people in the household (HHSIZE) was expected to positively influence stated WTP. This was due to the fact that a household with more members would be likely to receive more benefits from an environmental project than a household with fewer members. Furthermore, respondents with a higher level of education and income (EDU and INCOME) were expected to be willing to contribute more to the tap water improvement program. The same was expected of respondents who spent more on bottled water each month (BOTTBILL), as they were likely to benefit more from the drinkable tap water. Note that the above-mentioned socio-economic variables were obtained directly from responses to the questions contained in the fourth part of the CVM questionnaire (see Appendix 1).

Unlike the socio-economic variables presented above, the attitudinal variables could not be obtained from the attitudinal questions, because each attitudinal question contained many small question items. As a result, it was necessary to conduct principle component analysis to reduce the question items’ dimensions to a smaller number of factors. In total, three extracted factors were included in the probit and tobit regression models. The first factor - WORRY, represented the extent to which respondents were worried about the ailments and diseases they could contract from the consumption of contaminated tap water (such as diarrhea, kidney stones and cancer). The more respondents worried about their tap water quality, the more they could be expected to want to pay for the water improvement program. So, a positive coefficient of WORRY was anticipated. The second and third factors (BENEFIT and PROTEST) were extracted from question 8 concerning the reasons for the WTP decisions (Appendix 1), where BENEFIT referred to the various private and public benefits resulting from the program, and PROTEST represented items that assessed the respondents’ views on protesting (including: “I have severe doubts that

these improvements can be realized as described”, “I think government is responsible for such a program and should pay for it”, and “My water costs are already high enough; we should receive the good quality service without additional costs”). Respondents who expected more benefits

from the program could be expected to contribute more; with the opposite expected of those who scored highly on the protest belief. Therefore, the coefficients of BENEFIT and PROTEST were expected to be positive and negative, respectively. Description of the variables used in this analysis are summarized in Table 5-12.

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Table 5-12: Description of the variables used in regression analyses Variables Description

BID Proposed WTP bids (for DC dataset)

SEX Sex of the respondents (0 = female, 1 = male)

AGE Age of the respondents

EDU Level of education of the respondents HHSIZE The number of people in the household

INCOME Net monthly income

BOTBILL Average monthly expenditure on bottled water

WORRY Level of worry about ailments from contaminated tap water (1 = “not worried at all”, 5 = “very worried”)

BENEFIT Various private and public benefits expected from the program PROTEST Various protest belief towards the program

NEURO Level of neuroticism

EXTRA Level of extraversion

OPENN Level of openness to experience

AGREE Level of agreeableness

CONSC Level of conscientiousness

Results of the analysis of the influence of personality on WTP statements are presented in Table 5-13 and 5-14. Tables 5-13 shows the results of the probit regression model for the DC dataset, with the WTP answers as independent variables and the five personality domains (together with the other variables introduced above) as explanatory variables. Table 5-14 exhibits the results of the tobit regression model for the PC dataset, with the midpoints of WTP intervals as independent variables. Before looking at the results in detail, it should be mentioned at the outset that the magnitude of the estimated coefficients displayed in the two tables cannot be interpreted in the same manner as normal regression coefficients (Greene 2007). This means that only the signs of the coefficients can be meaningfully interpreted, such that positive coefficient estimates indicate a positive effect of the respective independent variables on the WTP statements. Due to this reason, the marginal effects of the coefficients were also computed. They are displayed on the third column of Table 5-13 and 5-14.

Looking at Table 5-13, many variables display the expected effects on stated WTP, with the variable representing WTP bids (BID) having a significantly negative impact on WTP

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answers. This result is plausible since the higher the proposed bids, the less likely it was that respondents would want to pay for them. Furthermore, age of the respondent (AGE) had a negative effect on the stated WTP. This result is in line with expectations and means that the older the respondents, the less likely they were to be willing to pay for the proposed program. This could be attributed to the fact that elderly people usually expect fewer benefits from an environmental project whose impacts are not immediate and that may only be generated in the far future. Next, the coefficients of both INCOME and BOTTBILL are significantly positive, as expected. Households with a higher level of income systematically had a higher WTP, and households with higher monthly bottled water expenses expected more benefits from the tap water improvement program, and as a result, were willing to pay more to support the program. As to the attitudinal variables, both WORRY and BENEFIT exhibited a positive association with the stated WTP, in other words, respondents who were more worried about the quality of their tap water and expected more benefits to be created by the program, were more likely to be willing to pay for it. PROTEST had a significantly negative effect on the stated WTP, suggesting that households who did not agree with the scenario tended to pay less. All in all, these effects confirm the prior expectations and confirm the plausibility of the elicited WTP.

When it comes to the effects of the five personality domains on the stated WTP, it is apparent that some of the five personality domains were statistically significant variables in explaining the systematic variations of WTP answers. More specifically, openness to experience (OPENN) had a strongly significant and positive effect on WTP answers, as did conscientiousness (CONSC) but to a lesser degree, at only a 5% level. Therefore, the first, important finding is that respondents’ openness to experience and conscientiousness could explain the stated WTP levels above and beyond the controlled socio-economic and attitudinal variables. In other words, after controlling for the effects of the variables sex, age, education, number of household members, income levels, worries over water quality, reasons for the contribution, and reasons for disagreement with the project scenario, respondents’ WTP statements were determined to a significant degree by their personality domains openness to experience and conscientiousness. This result supports hypothesis 4 - that respondents a high level of openness to experience are more likely to state a significantly higher WTP than respondents with a low level of openness to experience. The result, however, contradicts hypothesis 6 - that conscientiousness does not have an effect on WTP statements. In particular, the evidence here suggests that respondents a high level of conscientiousness are more likely to state a significantly higher WTP than respondents with a low level of conscientiousness.

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The second important finding here is that not all five personality domains exhibited a direct association with stated WTP. More specifically, the expected relationships between neuroticism (NEURO), extraversion (EXTRA) and agreeableness (AGREE) on the one hand and the WTP answers on the other could not be confirmed by using this probit model for the DC dataset. The lack of statistical significance for the three personality domains holds true even in a reduced regression model excluding all other socio-economic and attitudinal variables. This indicates that no relationships could be detected between stated WTP and the neuroticism, extraversion and agreeableness scores, even if such a relationship was only spurious, as induced by confounding variables. As a result, on the basis of this finding it is not possible to confirm hypotheses 2, 3 or 5. These two tentative findings were further tested in the PC version of the CVM survey.

Looking at the marginal effects of the explanatory variables in the DC model, a 1000-baht increase in the WTP bids (BID) decreases the probability that the respondents will accept the bids by 144 percentage points. At the same time, a 1000-baht increase in the net monthly income (INCOME) increases the probability that the respondents will accept the proposed bids by 3 percentage points. A one-unit increase in openness to experience (OPENN) and conscientiousness scores (CONSC) will increase the probability that the respondents will accept the proposed bids by nine and fourteen percentage points respectively.

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Table 5-13: Personality as explanatory variables for WTP in the DC dataset

Variables Coeff. p-value Marginal

effect BID -6.97** _{0.00 -1.44} SEX -16.45 0.90 7.71 AGE -13.92** _{0.03 -5.18} EDU -16.21 0.66 -8.99 HHSIZE 37.20 0.42 2.45 INCOME 0.08* _{0.07 0.03} BOTTBILL 3.77** _{0.00 0.89} WORRY 173.79** _{0.01 47.16} BENEFIT 268.52** _{0.00 110.14} PROTEST -178.56** _{0.00 -39.83} NEURO 0.14 0.27 0.07 EXTRA -0.15 0.22 -0.04 OPENN 0.26** _{0.03 0.09} AGREE 0.14 0.37 0.03 CONSC 0.26* _{0.05 0.14} N 345

Modified McFadden’s pseudo-R2

(Herriges 1999) 0.08

Note: Standard double-bounded probit model. As this model does not correspond to a pre- existent model, a log likelihood function (as shown in equation 2-32) was directly specified and maximized in Nlogit to estimate the parameters of the model. Seven independent variables were rescaled by dividing by 1000 (BID, SEX, AGE, EDU, HHSIZE, INCOME, and BOTTBILL). Marginal effect is based on the single-bounded model. ** means significance at the 5% level, * significance at the 10% level

When it comes to the tobit regression model for the PC dataset, relatively few socio-economic and attitudinal variables had a significant effect on the WTP statements (Table 5 -14). BENEFIT exhibited a positive association with stated WTP. This was in line with expectations and supported the plausibility of the elicited WTP answers. Two surprising outcomes should be noted here. First, respondents from larger households (HHSIZE) had a significantly lower WTP than respondents from smaller households. This result would seem counterintuitive, but can be explained by the fact that respondents living with more household members had more household expenses. As a result, such respondents were under greater financial pressure than those living with fewer people. The second puzzling result was a missing significant income effect (INCOME) on WTP, and this is more difficult to explain. Typically, income is a reliable WTP

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determinant, but in this study INCOME exhibited no influence on the relevant WTP. Had other variables in the PC model not exhibited their expected influence on the stated WTP, this absence of a significant association between income levels and WTP would have created doubt in terms of the validity of the model.

There were four key results regarding the effect of personality domains on WTP answers. The first of these was the strongly significant and positive influence of openness to experience on stated WTP in the PC regression model. This finding adds to the evidence supporting hypothesis 4 that respondents a high level of openness to experience are more likely to state a significantly higher WTP than respondents with a low level of openness to experience. Second, the finding that conscientiousness had a positive association with stated WTP was also reproduced in the PC model. Again, this result contradicted hypothesis 6 – that conscientiousness does not have an effect on WTP statements. Third, a significantly negative association between extraversion and the stated WTP was detected, which is contrary to hypothesis 3 predicting a positive association. Fourth, the absence of a significant influence of neuroticism and agreeableness on the WTP was replicated in the PC dataset.

To better understand the estimation results, the marginal effects of the explanatory variables on stated WTP were also analyzed. An increase of one household member (HHSIZE), for example, will lead respondents to reduce their stated WTP by nine baht. A one-baht increase in the average monthly expenditure on bottled water (BOTTBILL) will lead respondents to decrease their stated WTP by 0.14 baht. At the same time, a one-unit increase in openness to experience score will lead to an approximately 20-baht increase in stated WTP. A one-unit increase in conscientiousness score will also lead to an approximately 19 -baht increase in WTP answers.

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Table 5-14: Personality as explanatory variables of WTP for the PC dataset

Variables Coeff. p-value

SEX 7.97 0.40 AGE -0.68 0.15 EDU -0.67 0.34 HHSIZE -8.92** _0.02 INCOME 2.46 0.55 BOTTBILL 0.14** _0.02 WORRY -2.07 0.68 BENEFIT 15.81** _0.00 PROTEST -2.63 0.59 NEURO 15.77 0.13 EXTRA -20.25** _0.03 OPENN 19.80** _0.03 AGREE 0.96 0.91 CONSC 9.05** _0.06 N 213 McFadden’s pseudo-R2 _0.02

Note: Tobit regression model. Dependent variable is the midpoint of payment card intervals. Four independent variables were rescaled. INCOME was divided by 1000. WORRY, BENEFIT, and PROTEST were multiplied by 1000. ** means significance at the 5% level, * significance at the 10% level

Taken together, the evidence shown in Tables 5-13 and 5-14 confirms hypothesis 4. The openness to experience domain had a significantly positive effect on the stated contributions to be made for the proposed environmental project. Since this effect occurred in both the DC and PC versions of the survey, it would seem to be a robust result. However, hypothesis 6, which stated that conscientiousness does not have an effect on WTP statements, have to be rejected. This is because in both DC and PC datasets, conscientiousness varied systematically with stated WTP. More specifically, conscientiousness had a significant and positive effect on WTP answers.

Hypothesis 3, which stated that respondents with a high level of extraversion are more likely to

state a significantly higher WTP than respondents with a low level of extraversion, has to be rejected, as it predicted a positive association between extraversion and the stated WTP. Evidence which refutes this hypothesis was produced by the PC version of the survey, in which respondents who scored high on extraversion had a significantly lower WTP than the low scorers. Last but

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not least, hypotheses 2 and 5 could not be confirmed on the basis of the regression results of this study. In both the DC and PC versions of the survey, neither neuroticism nor agreeableness had a significant effect on the WTP statements. Before looking into these results in more detail, the effects of the five personality domains on other CVM response behavior should be tested, those predicted based on the insights obtained from the Big Five model (section 4.3).

In total, five theoretical predictions were made in section 4.3 with respect to the relation between the five personality domains and different CVM response behavior. To start with, neuroticism was expected to be an important determinant of protest belief. Next, a positive association between extraversion and extreme response style was anticipated, because of the exaggerated communication styles of the extraverts. Last but not least, openness to experience, agreeableness and conscientiousness were expected to provide an intrinsic incentive among respondents to answer the CVM questionnaire as carefully as possible. As a result, these three personality domains were expected to positively affect the amount of time respondents used to answer the questionnaires.

To test the theoretical predictions mentioned above, three OLS regressions using differing response behavior as dependent variables were performed. The three dependent variables of interest were protest belief, extreme response style, and time used for interview. These were measured as follows. For protest belief, a “protest scale” (Meyerhoff and Liebe 2006) was calculated by summing up the ratings interviewees gave on a five-point Likert scale to three protest statements in the CVM questionnaire, these being: “I have severe doubts that these

improvements can be realized as described”, “I think the government is responsible for such a program and should pay for it”, and “My water costs are already high enough we should receive the good quality service without additional costs”. A higher protest score represented a stronger

protest against the proposed scenario. Extreme response style was measured by counting the number of positive and negative extreme responses (Meisenberg and Williams 2008), such as “strongly agree” and “strongly disagree”, that each respondent gave to all 78 question items which contained the five-point Likert scale in the CVM questionnaire. The more often he or she used the endpoints of the Likert scale, the higher the “extreme response score” each respondent obtained. Finally, to record the timings of each interview, the interviewers were asked to record the overall time each respondent needed to complete it.

The independent variables of the three regression models consisted of the Big Five scores and a set of socio-economic variables. The regression results are shown in Table 5 -15, and these suggest that several of the socio-economic variables were important in determining the protest beliefs and extreme response styles of the respondents, as well as the amount of time it took them

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to complete each interview. Looking first at the determinants of the respondents’ protest beliefs,