Scale and taste heterogeneity in the case of an unfamiliar good as biodiversity: does the modelling approach of serial nonparticipation affect results?

Serial non-participation is a response behavior that is frequently found in stated choice experiments. One form of serial non- participation is that a varying number of respondents chooses always the zero-price or status quo alternative. The approaches used in the literature to deal with this problem vary from excluding those respondents to using applying latent class models to endoge- nously allow for different preference structures. However, latent class models also allow to assign respondents to a known class. In this paper we compare specifications of latent class models with and without restrictions. Additionally, we control for differences in the error variance across respondents by applying a scale-extended latent class model. The comparisons are designed to show whether respondents are allocated differently among classes and whether willingness to pay estimates are affected significantly. The data are from a choice experiment regarding management actions to enhance forest biodiversity. The data set is characterized by a high percentage of respondents who were not willing to pay; almost 50% of the respondents always chose the zero price alternative locating this sample rather at the top of the range of respondents who are not willing to pay.