What can egocentric network measures contribute to stated preference analyses? An exploration

Abstract

While economics has long recognized concern for others (e.g. altruism and bequest motives), explicit inclusion of social network metrics in non market valuation models is relatively recent. Social network effects on willingness to pay can propagate through the entire network and bias willingness to pay (WTP) estimates. However, social networks are complex systems of relationships between individuals, and measuring them can be difficult. We explored the potential for egocentric social network (ESN) measures to help explain variations in preference for the status quo. Using simulated random networks, we demonstrate that respondents more likely to choose an alternative to the status quo are part of more dense ESNs. A strong influence of an attitude toward the impact of economic development on the environmental goods and services is consistent with network structure and preference for environmental improvements being jointly determined.