以條件評估法衡量台灣公共廣電價值

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(1)CONTENT CHAPTER 1 INTRODUCTION ................................................................1 1.1 Public Service Broadcasting (PSB) at the Turn of the Century.......................1 1.2 Purpose of the Study ........................................................................................2 1.3 Research Methods and Data Sources ...............................................................3 1.4 Structure of Research .......................................................................................4. CHAPTER 2 LITERATURE REVIEW.....................................................5 2.1 Literature Review on the Accountability of PSB ............................................5 2.1.1 Identity Crisis of Public Service Broadcasting .....................................5 2.1.2 Reaction: Media Accountability ...........................................................7 2.1.3 Forms of Public Fund............................................................................9 2.1.4 Is Direct Grant Appropriate? ..............................................................10 2.1.5 Public Funding Mechanism in Taiwan: A Comparison......................10 2.1.6 Funding Policy Corresponding to the Social Need.............................11 2.2 Literature Review on CVM and its Practice ..................................................12 2.2.1 Use Value vs. Nonuse Value ..............................................................13 2.2.2 Welfare Measures: WTP v.s. WTA ....................................................14 2.2.3 Commissioning a CVM Study ............................................................15 2.2.4 Criticism of CVM ...............................................................................18 2.2.5 Protest Responses in CV survey .........................................................19 2.3 How CVM is Applied on the Assessment of PSB Value: Examples from Other Countries ....................................................................................................21 2.3.1 CBC of Canada ...................................................................................22 2.3.2 RTÉ of Ireland ....................................................................................23 2.3.3 BBC of UK .........................................................................................24 2.3.4 NHK of Japan .....................................................................................26 2.3.5 Key Explanatory Variables Affecting Citizens’ WTP........................31. CHAPTER 3 RESEARCH DESIGN AND SURVEY.............................33 3.1 Focus Group...................................................................................................33 3.1.1 Execution Process and Results............................................................34 3.1.2 A Brief Summary for the Focus Group...............................................36 3.2 Survey and Sampling Procedure ....................................................................37 3.3 Questionnaire Design.....................................................................................37 3.3.1 Contents of the Questionnaire.............................................................37 3.3.2 The Contingent Valuation Scenario and Elicitation Format...............39. CHAPTER 4 SURVEY RESULTS..........................................................42 4.1 Data and Sample Statistics.............................................................................42 4.1.1 Descriptive Analysis of Respondents’ Characteristics and TV usage 42 4.1.2 Expectations of and Satisfactions with Public Values ........................46 4.1.3 Descriptive Analysis of Attitudes toward PTS ...................................48 4.2 Distribution of the Dichotomous Choice Responses .....................................49 4.3 The Protest Responses ...................................................................................51 4.3.1 The Selection of Protests in this Study ...............................................51 4.3.2 Does Protests Matter? .........................................................................53. i.

(2) CHAPTER 5 THE EMPIRICAL MODEL...............................................56 5.1 Model Specification .......................................................................................56 5.2 Definition of the Explanatory Variables ........................................................58 5.3 Empirical Estimation: Probit Regressions .....................................................63 5.3.1 Use Value Scenario.............................................................................63 5.3.2 Nonuse Value Scenario.......................................................................65 5.4 Estimating WTP for Use Value and Nonuse Value.......................................66 5.5 Profile Analysis: Least Significant Difference (LSD) Test ...........................68. CHAPTER 6 CONCLUSION AND LIMITATIONS..............................71 6.1 Conclusion .....................................................................................................71 6.2 Limitations and Suggestions for Future Research .........................................72. REFERENCE............................................................................................74 APPENDIX 1 AN INTERNATIONAL COMPARISON OF PUBLIC BROADCASTING AND PUBLIC FUNDING MECHANISM .............79 APPENDIX 2 QUESTIONNAIRE ..........................................................81 APPENDIX 3 OPEN-ENDED REASONS FOR NOT PAYING FOR THE CHARGE .........................................................................................91. ii.

(3) LIST OF TABLES AND FIGURES Table 1: A comparison of the elicitation formats ........................................................17 Table 2: Examples of protest responses across two studies.........................................20 Table 3: A comparison between the CVM studies in public service broadcasting......29 Table 4: Characteristics of the participants in focus group..........................................33 Table 5: WTP for use value and nonuse value ............................................................35 Table 6: Descriptive statistics of respondents’ socioeconomic characteristics ...........44 Table 7: Descriptive statistics of respondents’ media usage .......................................45 Table 8: Descriptive statistics of respondents’ preferences toward different program genre...............................................................................................................45 Table 9: Regression on hours of watching PTS...........................................................46 Table 10: Frequency distribution of the expectations of the PSB functions and satisfaction with commercial broadcasters ....................................................47 Table 11: Frequency distribution of opinions toward funding issues (unit: %) ..........49 Table 12: The distribution of dichotomous responses (Single bound) ........................49 Table 13: The distribution of dichotomous responses (Double bound).......................51 Table 14: Selection of protest response in this study...................................................52 Table 15: The distribution of dichotomous responses after eliminating the protests ..53 Table 16: Independent T-test by protests.....................................................................54 Table 17: Chi-square test for opinions by protests ......................................................54 Table 18: Probit regression on protest responses.........................................................55 Table 19: Definitions and predicted coefficient signs of variables used in the model.61 Table 20: Probit regressions on use value samples......................................................64 Table 21: Probit regressions on nonuse value samples................................................65 Table 22: descriptive analysis of the calculated WTP .................................................67 Table 23: Compare the estimated WTP with the GDP: an international comparison .68 Table 24: Least significant difference (LSD) test........................................................70 Figure 1: Illustration-- tracking consumer benefits .......................................................9 Figure 2: Compensating surplus (CSU) and equivalent surplus (ESU).......................14 Figure 4: Net citizen surplus and net consumer surplus. .............................................26 Figure 5: The Committee (“約束”評価委員会) and the executive broad of NHK ..27 Figure 6: WTP for NHK’s individual service..............................................................28 Figure 7: The differences between expectation and satisfaction of the 6 public functions.......................................................................................................48 Figure 8: distribution of dichotomous responses -- use value .....................................50 Figure 9: distribution of dichotomous responses -- nonuse value ...............................50 Figure 10: Estimated WTP for use value .....................................................................67 Figure 11: Estimated WTP for nonuse value ...............................................................67. iii.

(4) CHAPTER 1 INTRODUCTION 1.1 Public Service Broadcasting (PSB) at the Turn of the Century. The public service broadcasting in most western European countries is in a state of flux, if not in any crisis (Brants, 2003; Collins, et al. 2001). The convergence of broadcasting and telecommunication, the switch from analogue to digital communication, and the changes associated with globalization and privatization —all leads it more difficult to define the concept of public service (Bardoel & D’Hanenes, 2004; Collins, et al. 2001; Brown, 1996b). In addition to the challenges caused by material forces, PSB is also challenged on the ideological ground, say, a shift in mentality from liberalization/ democratization to postmodern/ neoliberal sentiments that may have profound implications for the type of cultural policy regulation of which PSB is a part (Syvertsen, 2003). Both the material and nonmaterial forces cause the legitimacy of PSB being challenged and undermined and consequently made public financing for PSB become stagnated, and altered the context to which broadcasters and policy makers must respond (Croteau & Hoynes, 2001). However, the development of public service broadcasting in Taiwan is opposite to that of the Europe. After passing the Amendment of Broadcasting & Television Act in 2003 in which the government, military, and political party were required to withdraw from the terrestrial television, the idea of launching a larger scale of public service broadcasting in Taiwan emerged (Cheng, 2005). On July 1st 2006, Taiwan Broadcasting System (TBS 台灣公共廣播電視集團) is established by the merge of Public Television Service Foundation (PTS) and Chinese Television System (CTS), which is government-owned in the previous 35 years. Furthermore, Hakka TV, Indigenous TV and Taiwan Macroview TV also joined TBS in the beginning of 2007. It seems to be a satisfying result to counterbalance and to fight against the over market-oriented media environment in Taiwan. However, it also confronted with the embarrassment of lacking substantial and stable public investment fund that can promise the practice of public value without the intervention of commercial and political force. As far as the fund is concerned, there never come out an agreement about how much a reasonable public funding should be, and the funding mechanism still leaves room for debate. To what extant should the government budget for the public 1.

(5) broadcasting every year, or to say, how much should the public fund to invest in public broadcasting, still remains a significant media policy controversy. It is also suggested that TBS should collect the so called “license fee” rather than rely on the annual budget from the government, just like what BBC and NHK have done for decades. By the collection of license fee, the civil right can be protected and the production of high quality program can be ensured. However, since the audiences in Taiwan have got used to the free access to terrestrial public broadcasting, having the audiences to pay for the public broadcasting service would undoubtedly a failure-unless the audience can perceive the concrete value of and can state their preference to public service broadcasting. Although the benefits to which PTS was designated to accomplish are clearly stated (PTS, 2007a; Harrison & Woods, 2001; Coppens, 2002), yet empirical evidence of the claimed benefits is seldom pursued in the literature so far. The lack of quantification is due to the inherent difficulties of valuing the non-traded good. To estimate the value of PTS, or to say, the benefit that the citizen perceived, this research conducts the Contingent Valuation Methodology (CVM) and elicits the citizen’s willingness to pay (WTP) for PTS.. 1.2 Purpose of the Study To understand whether people hold positive values for public service broadcasting which have limited apparent personal economic relevance, this study employ the reveled-preference technique (e.g. CVM) eliciting the participants’ willingness to pay (WTP) for public service broadcasting to estimate the value of PTS. This study discusses only the value of PTS instead of the TBS as a whole because the TBS has been established simply for one year and is still not very well recognized by Taiwan citizens. In this research, the terms “PSB” and “PTS” must be clearly defined that “PSB” is a conceptual term and “PTS” (the abbreviation of「公共電視台」) is the practice of PSB in Taiwan and is the operational definition of PSB in this study. Actually, the implication of WTP is two-fold: to the audience, the WTP can be the seen as the benefit that they derived from program receiving; to the broadcasters, WTP can be regarded as the value generated from program production. As a result, WTP can be further used in other analyses. Take Japan’s studies for example, 2.

(6) researchers use the result of audiences’ WTP for TV watching to conduct the cost-benefit analysis for broadcasting industry (Hisao et al, 1993). A recent case can be found in NHK. In the evaluation of NHK’s achievement of their promises, the amount of NHK audiences’ WTP serves not only an indication of audiences’ evaluation, but serves as the numerator considering their Value for Money (VFM) as well. (see NHK“約束”評価委員会，2007). It has been 9 years since PTS, Taiwan’s first public service broadcasting institution, introduced its public service. Although the contribution of PTS is “invaluable” to the civil society, this study is intended to have it “valuable” to see if people hold positive value toward the service. Owing to the fact that it is the commercial broadcasting that dominant the media market and PTS is strongly threatened by the commercial counterparts, people’s attitude toward commercial broadcasting seems to be a potential determinant for interpreting value of PTS. In brief, the purpose of the study is: (1) to estimate the use and nonuse value of public service broadcasting in monetary term by eliciting Taiwan citizen’s willingness to pay. In addition to the estimation of WTP, other purposes of this study are to: (2) to find out what kind of public service broadcasting functions that citizens emphasize, and see whether their expectation of PTS and satisfaction with commercial broadcasters influence their WTP; and (3) to examine the influences of citizen’s socio-economic characters, media usage behavior and attitudes, and see to what extent these variables may affect their WTP.. 1.3 Research Methods and Data Sources To answer the research questions, a national wide telephone survey is conducted by Research center for Survey Research, Academia Sinica in December 2007. Respondents’ socioeconomic characteristics, attitudes and opinions are collected to get a holistic view on how people perceive PTS in Taiwan. To know how these characteristics influence their willingness to pay for PSB, probit regression model is used as an analytical tool to examine the influence of these determinants. Finally, 3.

(7) individual’s willingness to pay for PSB is estimated with the empirical model which is developed under the notion of welfare measures proposed by Hanamann (1984). 1.4 Structure of Research This study proceeds with a discussion of the relevant literatures on media accountability and on contingent valuation methodology in Chapter 2. After the literature, the survey procedures are explained in Chapter 3, the results of the survey are described in Chapter 4, and the empirical model is presented in Chapter 5. Finally Chapter 6 concludes with the discussion of the main findings.. 4.

(8) CHAPTER 2 LITERATURE REVIEW When broadcasting was invented in 1920s, it soon turned out to be the most highly regulated industries in every country for its cultural and political importance. Public service broadcasting (PSB), without exception, was designated to transmit and to produce the programs that “educate, informs, and entertain” the audiences (Holtz-Bacha & Norris, 2001). Taiwan Public Television Service Foundation (PTS), founded in 1998, operated as an independent public organization and launched the public broadcasting service with the following mission statements (PTS, 2007a: p7.): (1) to produce and broadcast diverse and quality programs, (2) to promote the development of a civil society, (3) to inculcate national cultural values, and (4) to broaden international culture exchange. The benefits to which PTS was designated to accomplish are clearly stated, yet empirical evidence of the claimed benefits is seldom pursued. In this chapter, we are going to review the literatures on why the value of PSB should be examined, and why Contingent Valuation Methodology (CVM) is appropriate for the evaluation of PSB. The procedure of conducting CVM, its advantages and disadvantages will also be introduced. Finally, studies using CVM to estimate the value of PSB in the existing literature are reviewed as well for further discussion.. 2.1 Literature Review on the Accountability of PSB 2.1.1 Identity Crisis of Public Service Broadcasting A brief definition of “what public service broadcasting is” can be found in the Broadcasting Research Unit (BRU) pamphlet presented in 1985. In the document, BRU provided eight principles that PSB should follow regardless of whatever system they are in. The eight principles are (BRU, 1985; cited from Brown, 1996a): (1) universal accessibility (geographic); (2) directly funded by the viewing and listening audience; (3) independence from government vested interests; (4) universal appeal (general tastes and interests); 5.

(9) (5) particular attention to minorities; (6) contribution to sense of national identity and community; (7) competition in good programming rather than for numbers; and (8) guidelines that liberate rather than restrict program makers. The first three items reflect the relationship between the government, the audience, and the broadcaster; the rest items indicate the philosophy of program production. Follow those principles, Tracey (1998, p. 26-32) provides the similar viewpoints suggesting PSB should operate independently and distant from the government’s intervention. Syvertsen (2003) illustrates three key characteristics describing PSB in terms of structure: first, PSB are certain companies or institutions entrusted with a set of privileges to insulate them to some degree from the market factors, these privileges may be of an economic (public funding) or technology nature; second, PSB are obligated to fulfill certain obligations (universal coverage, high-quality programming, national culture identity protection, and so on) in return for the privileges; third, PSB are subjected to certain forms of governance which is set to assess the performance of the privileged institution and ensure that obligations are interpreted in accordance with the general consensus. Although there are guidelines suggesting what a public broadcasting should be, the forms of PSB vary from country to country and also from time to time. For example, in the U.S. the public broadcasters are outlets for the programs the commercial broadcasters will not pursue. In contrast, the public broadcasters in the European countries are considered as public service akin to public education and public spaces (Nordicity Group Ltd, 2006). Harrison & Woods (2001) reviewed the European Community (EC) documentations concerning the merit of PSB and found that the documents show some degree of consensus about the importance of PSB, but no legal standards or practical guidelines exist which could allow a coherent definition of PSB in EC. For example, the 1997 Amsterdam Protocol states that it is up to national governments to determine the funding and mandate of public service broadcasting institutions in their respective countries (Harrison & Wood, 2001; Syvertsen, 2003). In addition to the disagreements of PSB merit among countries, the shift of PSB is also observed in the evolution of television (Jakubowicz, 2003). All the arguments 6.

(10) provided above ascertain the dynamic nature of the role of PSB. In fact, the real problem in defining PSB is not how to improve the list of public service principles, but rather HOW to apply the principles (Raboy, 1995). In other words, to prevent the PSB from suffering the “identity crisis”, it is necessary for PSB to return to even more fundamental value regarding broadcasting and its role in society. Strange enough, however, many critics tend to define PSB from the perspective what it should NOT be. As Croteau & Hoynes (2001) describe: If media industry is different, in most respects, from other industries, the underlying conceptual reason is that media outlets have a distinctive relationship with the public. Rather than simply supplying consumer goods in a free market context, media in a democratic society are expected to serve the public interest. It is no small task to define what public interest means or how our mass media can serve in this capacity. In fact, critics often find it easier to identify what is not in the public interest—too much violence in television or news that is too focus on the crime, for example—than to explain what serving the public interest entails (p.33). The dynamic nature of public service broadcasting is also reflected in the amendment of Public Broadcasting Act in Taiwan. The draft of the Amendment brought up by PTS shows a tendency to broaden the definition of public service broadcasting (Government Information Office, 2005). The current Act for PTS defines that public service TV is to serve as a compensation for the insufficiencies of commercial television (Act of PTS, 2004). This kind of definition regards PTS is at best a supplement filling the gaps disdained by profit-making broadcasters and, from the viewpoint of PTS, is not comprehensive enough to capture the full mandate of PSB. As a consequence, PTS suggests an amendment of this article that broadens the subject of regulation from PTS to PSB, and redefines that PSB is to form a balanced media environment.. 2.1.2 Reaction: Media Accountability The trend of redefining PSB also sheds new lights on the awareness of pursuing “accountability” in PSB management. Media accountability has gained considerable 7.

(11) attention over the last decade. Bardoel & D’Haenens (2004) proposed four accountability mechanisms: political, market, professional and public accountability, and examined how the accountability mechanisms have been taken into practice in Western Europe. Public service broadcasting, with the very name of “public”, has already suggested the strong emphasis on public accountability. Public accountability places emphasis on the need to maintain a more direct relationship with the citizen, in addition to the relationship with the state and the market (Bardoel & D’Haenens, 2004). In other words, PSB should get rid of the “paternalism” mindset ignoring the citizen’s popular taste and culture, and show their willingness to be measured and evaluated instead. Measuring the public service broadcasting is never easy considering the complexities of consumer benefits. Hastings (2004) proposed that measuring the consumer benefits is directly aligned to the perception of value attained by the viewing experience, and such a benefit also indicates the extent to which a consumer surplus is delivered by the public service broadcasting. The most often quoted terms used for the measurements of audience are reach and share. Compared with reach which addresses the fundamental tenets of PSB—universality, share seems to be a less appreciate measure while it allows the comparison of popularity with commercial sectors. Whatever term is used, they both capture neither the quality of the program nor the enjoyment of the viewers. To carry out a measurement that captures the value or enjoyment of programs, some PSB conduct quality surveys inquiring audience’s attitude regarding the quality of the programs, and their enjoyment and satisfaction on the programs. TvQ adopted by PBS, AI (Appreciation Index) by BBC, EI (Enjoyment Index) by CBC, and the Program Appreciation Index by RTHK are all examples of attitudinal-based measurements. All the measurements are used to counterbalance the PSB’s over leaning on rating. Hastings (2004) proposed an input-output-outcome model illustrating the consumer benefits:. 8.

(12) Input to process. Input measures - total fees collected/ revenue generated - % non-payments (in case of license fee) - % of budget devoted to program making. outcome/ behavioral change. Output measures - hours of programming produced per genre. Outcome measures - Attitudinal: perceived value for money - Attitudinal: impact (& recall) - Stated preference: WTP. Figure 1: Illustration-- tracking consumer benefits Source: “Discussion of performance measures in public service broadcasting,” by C. Hastings, 2004, Aslib Proceedings, 56(5), 307. As is shown in Figure 1, consumer benefits of PSB can be measured by both outputs and outcomes which rely less on capturing the quantity but more on the audience perception of quality and perception. WTP, as one of the outcome measures, can help illustrate the consumer surplus in PSB. In this regard, the estimation of WTP is not only meaningful to the outcome, but also indicative of efficiency and effectiveness of input. In a democratic society, the usage of public fund should under scrutiny so that the effectiveness of the public organization is ensured.. 2.1.3 Forms of Public Fund Public funding can be achieved via many options. According to the Legal Department of European Broadcasting Union (EBU), the different sources of funding includes the license fee paid by the viewer, the concession fee paid by commercial operators, allocations from the government budget, advertising, sponsorship, subscriptions fee for pay services, and some other revenues from program sales, teleshopping, merchandising and so on. Most European countries adopt the mixed funding to prevent the over-reliance of one particular source of funding which might run the risk of undermining the independence of PSB. Another reason supporting the. 9.

(13) mixed funding is that a mixed system is more robust in a rapidly changing environment (EBU, 2000). 2.1.4 Is Direct Grant Appropriate? Most countries adopt either the license fee or the government grant as the main funding mechanism for the PSB, seldom do the two mechanisms coexist in a single country. It consequently leads to some discussions regarding the appropriateness of the two funding options. Graham & Davis (1992) propose four considerations suggesting that the public funding should not take the form of a direct grant from government. With the considerations that PSB should keep at arm’s length from the government and should be able to count on a predicable/secure source, Graham & Davis (1992, p.198-9) recommended that the adoption of the special tax, especially the license fee, is the most proper way of funding. The consideration of the relationship between the government and media prevails not only in broadcasting but also in the press industry. Columbia Journalism Review, one of the leading quality publications, convened a panel of top editors and a media investor to discuss the future of newspapers in early 2007. In the panel, the discussion of whether press should be supported by government is presented, and the worry of government intervention is also expressed. But the conclusion made in the panel is optimistic, and believe that the benefit from the government support still have the possibility to outweighs the harm from government influence (Nordenson, 2007).. 2.1.5 Public Funding Mechanism in Taiwan: A Comparison Early in 1998 when PTS came to exist, media critics have been aware of the difficulties and potential challenges that PTS might confronted with. Kwan (1998) pointed out that the financial facet would be one of the most bothersome problems. Other problems would rise due to the unclear identity and poor knowledge and supports from the general public to the public TV service. Kwan analyzed possible financial resources and proposed charging the radio-wave tax to subsidize the PTS, realizing concept of using public goods (radio wave) to serve the public good (public interest) (Kwan, 1998). The funding practice in Taiwan is much similar to the U.S. where most of the funding comes from the government grant and relay on audience’s donation as well. 10.

(14) PTS receives the annual government grant of NT 900 million dollars as the primary income, other revenues include donation, product sales, rentals, grant from the Cable Radio & Television Development Fund, and so on (PTS, 2007a). The amount of government’s grant constitutes 66 % of total revenue, but is far from satisfaction if it is compared with the expenditure. Another problem for the government fund is that it is not subject to regular review, thus lead to the inflexible of the fund. Such a financial difficult goes from bad to worse when PTS incorporated CTS to form TBS. CTS, as a government-owned broadcaster, relies heavily on the advertising income. The reliance remains since there is no funding mechanism designed to react to the broadening of the PSB system. The funding in Taiwan is poor not only in the mechanism but also in quantity. A calculation of per capita funding level shows that Taiwan’s public investment in PSB is 39 NTD per person. Compared with the amount in Japan (1427 NTD) and Korea (389 NTD), the public find for broadcasting in Taiwan is relatively poor (PTS, 2007b). The international comparison incorporating the funding facts in Europe and Asia is provided in Appendix 1as a comparison. PTS also recognize the crucial influence of public fund on their operation. In the draft of the Amendment brought up by PTS (Government Information Office, 2005), PTS advocates the need to ensure the current funding level from the government and the amount of funding should subject to a regular review taking the price index and annual projects into account, with the attempt to enable the funding policy “flexible” to respond to the dynamic media environment.. 2.1.6 Funding Policy Corresponding to the Social Need However, without robust evidence suggesting the value of the public broadcasting service, the debate of funding cannot but remains a “political issue” (O’Hagan & Jennings, 2003). That is the reason why Canadian Broadcasting Corporation (CBC) asked Nordicity Group Ltd to examine the financial sources provided by governments to public broadcasters in western countries. The result indicates that poor funding does not always lead to poor performance: while Canada appears to derive a significant benefit from public broadcasting, the PSB in Canada receives substantially less support than it does in most other countries (Nordicity, 11.

(15) 2006). Whatever form of public funding is adopted, there are some criteria that a proper funding should meet. The former president of EBU, Albert Schart, suggests four funding principles deserve ongoing discussion are (Schart, 1999: p.4-5): (1) stability: the need for a stable funding framework; (2) independence: safeguards against political and economic pressure; (3) proportionality: funding corresponding to the need; and (4) transparency: open procedures and public accountability. The third principle “proportionality” implies that the amount of fund granted to PSB should be sufficient to ensure them to carry out their missions but should not go beyond what is necessary. Nonetheless, how to justify whether a certain amount is sufficient or not leaves room for debate. It is also the reason why researchers from the discipline of economic adopted the methodology of contingent valuation (CV) to investigate the performance of PSB. CVM, although developed for estimating environment goods and public goods, is also employed to access the benefit of cultural projects for they share certain properties with environmental products (Noonan, 2003). Public service broadcasting, as the name suggests, serves as a public good in the society and can not be traded in the market. Besides, with the externalities that it brought to culture, democracy, community, empowerment and so on, it is also being regarded as a cultural good. As a result, many countries conduct the CVM through the expression of citizen’s willingness to pay for PSB to examine their funding policy and to justify the legitimacy of their PSB. The introduction of the methodology and its applications in public service broadcasting are provided and illustrated in the following section.. 2.2 Literature Review on CVM and its Practice Contingent Valuation Methodology (CVM) is a technique that allows the value of public goods or services, especially those cannot be traded in a real market place, to be estimated in terms of monetary. Value of goods, like environmental goods and cultural goods, cannot always be revealed by the transactions. As a result, their values are to be “stated” by consumer preferences rather than being “revealed” through the 12.

(16) market mechanism. Among the methods dealing with the STATED PREFERENCE, CVM is one of the approaches that most commonly used. CVM can elicit both use and non-use value, and indeed is the only possible technique for the evaluation of non-use value (Markandya et al., 2002). CVM can be practiced by providing individuals a set of hypothetical/ illustrative scenario, asking individuals their maximum amount of willingness to pay (WTP) or their minimum willingness to accept (WTA) for a given loss and damages (Mitchell & Carson, 1989). By doing so, individuals can state to what extent is their preference to the goods. CVM emerged in 1960s in the environmental economics literature and later attracted a great deal of attention from other areas of economics such as cultural economics & public good economics after the endorsement of the National Oceanic and Atmospheric Association (NOAA) panel chaired by Nobel laureate Kenneth Arrow and Robert Solow (Arrow, Solow, Portney, Leamer, Radner, & Schuman, 1993). 2.2.1 Use Value vs. Nonuse Value Economists have generally settled the taxonomy of ‘total economic value’, which can be distinguished into use values from non-use values (Barbier, 1994). Use value, as the name suggests, refers to the value that individuals make use of; however, nonuse value covers situations in which individuals do not make use, or intend to make use of any given assets. Individuals may just wish to see various entities conserved ‘in their own right’ (termed existence value), or conserve the entities on the basis of retaining options for future generations beyond (termed bequest value). Nonuse values do not have well-defined boundaries for it is outside the scope of conventional utilitarian economic thoughts (Turner, 2001). Use values are usually expressed by the revealed preference (RP) while non-use values are expressed by the stated preference (SP). Unlike RP data, with SP surveys values may not be clearly defined prior to their measurement. SP instruments also limit the mode in which values can be expressed. SP surveys should thus be seen as vehicles that assist the contribution of values and enable their expression, rather than as instruments which reveal pre-existing values (Lockwood, 1998: p.293). In this study, use value is defined as the value that audiences derive from their own use of PTS, and nonuse value is defined as the benefit that PTS brought to the society.. 13.

(17) 2.2.2 Welfare Measures: WTP v.s. WTA In theory, with an improvement of utility U0 to U1, as shown in figure 1, the maximum amount of money that the individual is willing to pay to secure this improvement is the compensating surplus (CSU). In contrary, if the individual has the utility of U1 and considers it a loss to give up the improvement, than the minimum amount of a monetary compensation is the equivalent surplus (ESU). In practice, CSU is expressed in the elicitation form of WTP and ESU of WTA. X m3 ESU m0= m2 CSU. U1. m1. U0. 0 E0. E1. E. Figure 2: Compensating surplus (CSU) and equivalent surplus (ESU). Source: Environmental economics of for sustainable growth: a handbook for practitioners ( p. 424), by A. Markandya, et al., 2002, MA: Edward Elgar Publishing. Choosing a proper welfare measure according to the property rights structure from the status quo position is important. It is worth mentioning that there is a disparity between the amount of WTP and WTA, even though the target of evaluation is the same. It has been proved that the amount of WTA is higher than WTP for several times (Hanemann, 1991; Cummings, Brookshire & Schulze, 1986) , given the fact that WTA measures are not constrained by income and respondents may give a tendency to overbid. Although WTP and WTA are both evaluations that can be seen in the literature, it is WTP that more recommended by the researches (Mitchell & Carson, 1989; Arrow et al., 1993; Cumming, Brookshire & Schulze, 1986) because the WTP approach is more similar to the transaction scenario in the real world, the result of WTP is said to be more convincing and valid than the result of WTA.. 14.

(18) 2.2.3 Commissioning a CVM Study The research process of CVM is illustrated as follow: the research has to decide the object to be valued, and establish the hypothetical scenario. The respondents will state how much their WTP is for the evaluated object, and finally, the data will be collected and calculated to estimate the value. The process of a CVM research is illustrated in the following figure:. 15.

(19) 1. Definition of the objectives. 2. Questionnaire design. 3. Survey of sampled visitors. 4. Database creation and date analysis. 5. WTP estimation. 1a. Identification of the value to be valued. 2a. Introduction. 3a. Decide the sampling technique. 4a. Collection and verification of data. 5a. WTP models choice. 1b. Establishment of value to be estimated and unit of measurement 1c. Identification of time span of the valuation 1d. Identification of who should be interviewed (population). 2b. Socioeconomic information 2c. Scenario formulation 2d. WTP/ WTA elicitation format 2e. Payment vehicle. 3b. Decide how, when, and where to run interviews 3c. Training of enumerators 3d. Running the interviews. 4b. Database creation 4c. Elimination of invalid questionnaires 4d. Derived variables building 4e. Data analysis. Figure 3: The process of CVM research. 16. 5b. Estimation of annual individual average max WTP. 5c. Annual net benefits 5d. Total value of environmental services.

(20) The second step concerning “questionnaire design” is of fundamental importance and may have crucial influence to the results. A typical CVM questionnaire contains the three components: (1) the description of the scenario, (2) the elicitation question, and (3) the survey of some related socio-economic / attitudinal variables. Among the components, the elicitation question plays the most important role for its critical influence to the validity of the research.. Bidding Game. Open Ended. Payment Card. Single-bounded Dichotomous Choice (referendum question) (take-it-or-leave-i t approach, TIOLI). Table 1: A comparison of the elicitation formats Description Strength Weakness Let the interviewers simple and assisted anchoring iteratively raise/ iterative process. yea-saying lower the proposed high participation boring bid until the rate. respondent alters his yes/no answers. Straightforwardly display the WTP low participate ask for the information in the rates maximum WTP of form that the vulnerable to the respondent by research is looking strategic using one single for behavior (free question after they higher accuracy of riding) are presented with the relevant the hypothetical statistics scenario. Offer the no anchoring the limited range displays the WTP respondents a card of the cards information in the vulnerable to that contains a list format that the strategic of bid amounts and ask them to indicate research is looking behavior which amount of for money on the card they are willing to pay. Ask the simple and assisted yea-saying respondents if they iterative process. too expensive would vote (for or high participation lower accuracy against) upon a rate. of the relevant describe program of no anchoring statistics a single specified incentive cost. It also reflects compatible and the real world facilitate the market decision, respondents’ and simplifies the valuation task. cognition task that procedure familiar an individual in market related confronted with. behavior 17.

(21) Double-bounded Dichotomous Choice. Description An extension of the former (single-bounded) format. An addition of one extra dichotomous choice question for a proposed bid which is dependent on the first bid.. Strength simple and assisted iterative process. high participation rate. no anchoring incentive compatible procedure familiar in market related behavior higher accuracy of the relevant statistics. Weakness yea-saying too expensive complexity of the involved procedures. Source: The contingent valuation of national park (p. 25), by P. Nunes, 2002, UK: Edward Elgar Publishing. Since every elicitation formats has its advantages and disadvantages, researches should be able to distinguish them and make the best use of them. It is reasonable to consider, according to Lockwood (1998), that detailed preference maps provide more reliable indicators of preference than responses to one-off CV questions. In addition to the elicitation format, the payment vehicle is also important in the CVM questionnaire for the payment vehicle is never a neutral mechanism1 (Bateman et al, 2002). Markandya et al. (2002) suggests that a pilot study should be conducted for determining the most appropriate and the most familiar payment method. 2.2.4 Criticism of CVM Despite the spreading of CVM’s wide range of applications, there remains “discomfort” among most economics about using the estimations from CV to measure consumer’s WTP for charges in non-market good (Smith, 2006). The potential biases most criticized when applying CVM are as following (Markandya et al., 2002; Nunes, 2002; Mitchell & Carson, 1989; Throsby, 2003): (1) Strategic behavior in WTP response (free-riding): Many respondents may immediately state zero WTP although the amenity has value for them. They may attempt to misreport their real preferences by bidding untruthfully and thus affecting 1. Payment vehicles can be further distinguished to be voluntary or coercive. Coercive payments include taxes, fees, rates, charges or price, where voluntary payments include the donations and gifts that encourage free-riding and not incentive compatible. 18.

(22) the outcome. In other words, the amount of WTP is biased downward just because the respondents want to “get something for nothing”, which is often referred to as the free-riding problem. (2) Hypothetical bias: It is defined as the systematic differences between the response in the hypothetical market and the actual payments when individuals are presented with the opportunity in reality. Comparing the disparity of hypothetical and actual WTP, Loomis et al. (1996) conclude that the hypothetical bias is caused by the hypothetical nature of CVM, by which the respondents can’t be able to visualize the described scenario. As a result, respondents tend to report “what they thought the market price should be” rather than their true WTP in combination of their budget constraints. To reduce the disparity, the wording of the reminder is sometime necessary (Loomis et al., 1996). It is also recognized that the response of WTP is the reflection of “ethical value”, that is, a social-desired response which lacks the ability to reveal the true preference of the respondents (Diamond & Hausman, 1993). (3) Scope effect: It happens when respondents do not distinguish the differences in the quantity or the scope of the public good. According to Carson & Mitchell (1993), a precautionary measure should minimize the effect by focusing the attention of the respondents on the good of interest with clear instruction in the design stage of questionnaire. (4) Anchoring bias: Also known as “starting-point bias”. This occurs when respondents see the initial bid as a clue or a reference point for his final evaluation. Respondents may also tie the described scenario to a known situation experienced in the real world so that they may make the situation as a reference. (5) Vehicle bias: It is a misrepresentation of the WTP due to the specific payment vehicle hypothesized (e.g. income tax or specific charge). Indeed, the way that the payment vehicle is designed can affect the value judgment (Markandya et al., 2002; Wiser, 2007; Morrison et al. 2000). 2.2.5 Protest Responses in CV survey CV surveys always encounter responses that do not follow the basic assumptions of applied welfare economics: they might hold other beliefs that protest some aspects 19.

(23) of the valuation process rather than the good itself (Jorgensen & Syme, 2000). When a respondent states a zero bid or being refusal to pay in reaction to some unintended aspect of the measurement process, the responses are considered to be suspect or problematic (Jorgensen et al., 1999). Those responses are defined as “protest responses” and need to be treated carefully. But not all zero bidders should be included under the general heading of protest response because people are allowed to respond with values of $0 if they really find no utility in the good being valued (Boyle, 2003: 143). In general, the protest responses are always removed from the samples because they are assumed not indicative of respondents’ true value (Morrison et al., 2000). Boyle (2003) indicates that there are at least three types of potential response categories under the heading of protests, and all the three categories are based on the assumption that those responses do not reports their true values: the protests may (1) protest against some component of the valuation process, may (2) do not understand the what they are being asked to do in the survey, and may (3) behave strategically with an attempt to influence the results and ultimately the policy decision. In fact, the classification of protest responses does not in agreement and the reasons for protest vary across surveys (Jorgensen et al., 1999; Jorgensen & Syme, 2000; Meyerhoff & Liebe, 2006; Wu et al., 2005). Take the CV surveys done by Jorgensen & Syme (2000) and by Meyerhoff & Liebe (2006) for example, they identified the protest responses a little bit differently: Table 2: Examples of protest responses across two studies Jorgensen & Syme (2000, p.258) It is unfair to ask me to pay more money The government should use existing revenue to pay for the pollution controls We would be able to afford better water if the government did not waste so much money It is my right to have clear water and not something I should pay extra for I don’t really believe that the money collected will be spent properly I pay enough already in government. Meyerhoff & Liebe (2006, p.587) I already pay enough for other things The government should use other revenue instead of contribution to a fund It is my right to have a high level of biodiversity in forest without extra cost I refuse to assess biodiversity in monetary terms Those who enjoy biodiversity should pay I don’t have enough information about it. 20.

(24) On the contrary, if the responses are based on (1) budget constraint, (2) respondents’ priority of social issues, or (3) the judgments of the good in question, they are usually considered as non-protest responses and are kept in the analysis as true zero bibbers (see Meyerhoff & Liebe, 2006). Although the definition and classification of protest responses vary among studies, it is suggested that CV practitioners should make explicit the rational used to identify protest responses so that the WTP can be estimated on theoretical grounds (Jorgensen et al., 1999). So far, CVM technique has been used in the evaluation of many non-market goods, such as environmental protection (e.g. Barbier, 1994), natural sources (e.g. Cummings et al, 1986), Culture heritage (e.g. Santagata & Signorello, 2000; Noonan, 2003), health benefits (e.g. Fu & Yeh, 2005; Diener et al., 1998) and reconstruction after disaster (Fu, Yang, & Yeh, 2006). However, only a handful of the literature discusses the value of public broadcasting by means of CVM. The section below provides an overview of how this methodology can be applied in the discussion of the appropriateness of public funding in PSB.. 2.3 How CVM is Applied on the Assessment of PSB Value: Examples from Other Countries Sweden economist Bohm (1972) is the first one to look at the eliciting willingness to pay for broadcasting service. His study is the first one to test the free-riding hypothesis and the only experimental test of overpledging hypothesis. It is also one of the handful tests that compare the WTP in stimulated markets and in hypothetical market. Papandrea (1999) uses the method of contingent valuation to estimate the value of the benefits that the Australian have from the mandatory transmission of Australian domestic programming on television. The domestic programming quota is widely recognized as a kind of culture protection, but the value of the regulatory mechanism lacks the quantitative evidence to estimate it worthiness. Papandrea’s research aims to gauge whether the level of demand for domestic programming was greater than the level of supply and the likely existence of additional demand is supported in the research. A recently published research investigates the paying intent (WTP) of Hong Kang residents for online news and 21.

(25) finds that they are not paying for the online news service neither have no strong intent to pay in the future (Chyi, 2005). Both Bohm (1972) and Papandrea (1999) are forerunners who make use of CVM on the research of broadcasting. It is until 2001 when Finn et al. conducted the contingent valuation on CBC that he discussion of value estimations concerning public broadcasting received great attention. So far, the literature using CVM on the evaluation of PUBLIC BROADCASTING can be seen in four countries: Canada, Ireland, the UK, and Japan as well. In the following section, the four country’s sketch of their public broadcasting, the research motive, the elicitation method, the factors affecting WTP, and the result will be provided. 2.3.1 CBC of Canada The public broadcasting of Canada is the Canadian Broadcasting Corporation (CBC), which is also the biggest cultural institution in Canada. CBC/Radio-Canada provides 27 services available through radio, satellite radio, television, internet, wireless, and musical distribution service as well. CBC/Radio-Canada's mandate is set out in the 1991 Broadcasting Act. According to the Act, CBC/Radio-Canada is funded by a number of different sources and the primary source is the Parliamentary Appropriation for Operations. Although the CBC is operated at arm’s length from the government, it is responsible to the Parliament and to Canadians by submitting the Annual Report to the Parliament every year. However, the government has been struggled to determining how much to spend on public broadcasting and funding of the CBC has been the subject of public debate. Without identifying “what citizens really want”, CBC can’t be really accountable to the Canadians, nor can CBC claim for the appropriate public fund. Therefore, professors in the business school started to try to answer the question by using contingent valuations and choice experiment (Finn, McFadyen, & Hoskins, 2003, 2001). Choice experiment, as a form of conjoint analysis, is the method used to obtain the decomposition of the part-worth value from a set of evaluation of a designated set of multivariate alternatives2. Contingent valuation, on the other hand, is used in their survey to obtain the monetary value of the whole CBC service. By 2. The choice is conducted by asking respondents to provide a yes/ no response to 16 programming offers, each consists a combination of types of program and a monthly payment. Types of rograms are thus classified into 10 categories, and researchers can evaluate the different contributions of each programming type to the whole value of CBC service. 22.

(26) using the open-ended question, respondents are asked to response the amount they are willing to pay for all the CBC’s current services. It should be highlighted here that the survey distinguishes the “use-value” from “non-use value”. The former refers to the benefits of CBC generated from own household consumption, and the later refers to any other external benefits such as building a Canadian cultural or national identity. The two values are proved to be existed collaboratively because respondents can identify and bid for the different values. The results from choice experiment shows that sports programming is identified as making the greatest marginal contribution to overall value. In contrast, the French-language programming is recognized as least valuable. These are useful information for CBC when making resource-allocation decisions. The results from the CVM indicate that $ 664 million is the total value generated from CBC’s current service, with $488 million coming from direct use value and $175 coming from non-use value. However, such an amount is less than the CBC’s $996 million in public expenditures, but close to the CBC’s 1998 parliamentary appropriation of $ 759 million. The results do not support an increased funding for CBC, however, the contribution of public funding cannot be denied (Finn et al., 2001, 2003). 2.3.2 RTÉ of Ireland Radio Telefis Éireann (RTÉ) is the Irish public service broadcasting organization that provides three television services (RTÉ One/ Network 2/ TG4) and four radio services (Radio 1/ 2FM / Lyric FM/ Raidió na Gaeltacha). RTÉ is a Dual funded PSB with approximately 50% of its annual revenue from license fee and the remainder from advertising. With the increase of license fee in 2003, the public fund has become the primary source of RTÉ. However, the funding issue in Ireland has always been a controversy in Ireland politics and the RTÉ is called upon to justify the scale of the license fee. To provide a more robust rational, the CVM research is conducted and the survey is funded by RTÉ (Delaney & O’Toole, 2004, 2006a, 2006b. see also Jennings & Curtis, 2002). The research issues include (1) the amount of WTP for RTÉ service, (2) the extent to which the domestic and international competing services act as complements or substitutes, (3) the effects of usage and/or satisfaction on the WTP, (4) the 23.

(27) distinguishes between individual and household WTP and (5) preferences for making the license fee more progressive. Delaney & O’Toole (2004, 2006a.b.) conducted the nationally representative survey ant the end of 20023. The questionnaire used in the nationwide survey consisted 20 questions, and ordered such that respondents’ usage of and their satisfaction with general RTÉ service. They were then asked to compare RTÉ’s services with the services offered by other broadcasters (the main private indigenous competitor TV3), and subsequently they were asked the WTP. The hypothetical scenario was that there was no license fee any more and the respondents must choose either pay for the services or not receiving the service at all. Be aware that the open-ended elicitation format is accompanied with the follow-up questions which are used to distinguish the exact amount of household WTP from individual WTP. The result shows that the total mean household WTP was €21.5 and can be translated on to an annual mean of € 252.6, which is obviously higher the level of their current license fee. A number of independent variables were constructed from the responses. By using the regression models (OLS/ TOBIT/ LOGIT), some variables are shown to be influential to the willingness to pay. As expected, variable such as household size has a positive and significant effect on WTP in all regressions. The binary LOGIT regression which analyzes the determinants influencing the WTP greater or lower than the median WTP of €15 also indicates that the usage of Network 2, the overall satisfaction with RTÉ services, and the reliance on RTÉ for sports services are all indicative in determining whether one’s WTP will be higher than €15 or not. As to the distinguishes between household and individual WTP, the authors found that males are more likely to answer from an individual perspective while those respondents who are married/ aged 35-64/ with children are more likely to response from a household perspective (Delaney & O’Toole, 2004, 2006a, 2006b). Finally, the result from their study (2006a) shows there is no evidence that there is a widespread demand for a policy of redistribution using license fee as a mechanism.. 2.3.3 BBC of UK The British Broadcasting Corporation (BBC), established in 1922, is the biggest 3. The research is conducted in 2002, that is, before the announcement of the increase of license fee from €107 to €150 in 2003. 24.

(28) public broadcasting corporation in the world. The BBC uses the license fee to provide services including 8 national TV channels, 10 national radio stations, and 40 local radio stations. The BBC is constitutionally established by a Royal Charter that recognizes its editorial independence and sets out its public obligation in detail (BBC homepage). The Royal Charter is not a fixed charter; instead, it is revised every decade to meet the need of the license fee payers of the time. The latest Charter was granted to the BBC on 19 September 2006 and took full effect from 1 January 2007. Among the new reforms, it is the issue of license fee increase that receives most attention. In the latest Charter, the license fee designed to the next decade (2007-2016) remains intact and is determined to rise by 3% gradually over each of the two years, from its current level of £131.50 to £151 by 2012 (Shepherd, 2007/1/18). Without the research carried out by BBC & Human Capital4 (2004) that gives the strong endorsement of the fee increase, this resolute may not be made. According to the research, there is overwhelming support for the BBC across the UK, and people value the BBC twice the rate of the license fee. Such a conclusion is very similar to the optimistic conclusion made by Ehrenberg & Mill (1990) that the great majority of consumers would be willing to pay more for television (Ehrenberg et al. 1990; cited from Graham & Davis, 1992). The research conceptualized the total value of BBC as the combination of consumer value and citizen, as is shown below. To test the existence of the citizen value, this research assigned the respondents to think either as “consumers” or as “citizens” and saw if there is the citizen value. Total Value of BBC. =. Consumer Value. +. Citizen Value. The “consumer value respondents” are required to consider how much the license fee is worth to them personally while the “total value respondents” are asked to consider the fee from the perspective of social and personal benefit as a whole. This approach is quite similar to the approach taken by Finn et al. who distinguishes the “use value” and “non-use value” of CBC. The study generates a “net citizen surplus” of £3.3bn, and a “net consumer surplus” of £2.6bn, as shown in Figure 4. Over 80% of total value respondents and 4. Human Capital is a research institute specified in the business of media. See: http://www.humancapital.co.uk/ 25.

(29) over 76% of consumer value respondents willing to pay the subscription fee same as or even higher than the current license fee to obtain the BBC services.. Figure 4: Net citizen surplus and net consumer surplus. Source: “Measuring the value of BBC,” by BBC & Human Capital, 2004, p20.. It is not only the total value BBC but also the constituent part of the BBC that is being evaluated in the research. By using non-normalised chip-allocation and conjoint analysis, the value of each specific service of BBC is also being calculated. By using genre ranking, the total 38 program genres are also ranked by the two types of respondents to see what kind of genre is most recognized as beneficial to the “consumers” and to the “citizens”. Although these are not techniques used in a contingent valuation analysis, they also reveal some useful information for interpreting the WTP results. 2.3.4 NHK of Japan Nippon Hoso Kyokai (NHK), established in August 1926, is the public service broadcaster in Japan. The revenue of NHK comes from the receiving fee collected from the citizens and provides the terrestrial services (NHK General/ NHK Educational/ NHK Radio 1/ NHK Radio 2/ NHK FM) and the satellite service (NHK BS-1/ NHK BS-2/ NHK BS-hi) as well. We can’t discuss the CVM research in Japan’s public broadcasting without introducing the context of the survey. In Jun 2005, NHK announced a list of promises (約束) and established a committee (NHK“約束”評価委員会，”the Committee”) to assess how successfully NHK was in carrying out its promises. The Committee is 26.

(30) composed by experts independent of NHK and is to conduct the related assessments annually. The relationship between the Committee and NHK is illustrated in the following figure.. Figure 5: The Committee (“約束”評価委員会) and the executive broad of NHK Source: http://www3.nhk.or.jp/pr/keiei/yakusoku/051202.html The Committee emphasizes the necessity of using the scientific methods in the evaluation of NHK’s performances. Due to the quantitative nature of CVM, it is used as one of the scientific evaluation approaches in the assessment of NHK’s promises (Tsuji, 2007). In April 2006, the Committee conducted the survey in the form of personal interviews. Respondents are divided into two groups, one is for answering the WTP and the other is for WTA considering the terrestrial television service and satellite service respectively. WTP/WTA is elicited by a 3-stage dichotomous choice format starting from 1500 yen. However, WTA estimation was dropped for its low response rate. As to the estimation of WTP, the respondents are willing to pay 1,780 yen monthly per person for terrestrial services and 1,245 yen for satellite services. Both the amounts are higher then the current receiving fees (1,395 yen and 945 yen for terrestrial and satellite service respectively). Each respondent is also asked to the relative importance for each of the respective services and those of satellite services. The amount of WTP for each is obtained by multiplying their ratios, as is shown in figure 6:. 27.

(31) Figure 6: WTP for NHK’s individual service Source: “Assessing performance on NHK promises: methods and approaches” by M. Tsuji, 2007, NHK Broadcasting Studies 2006-2007, 5, 12.. The Committee also makes use of the econometric method (Logit analysis) to analyze the factors that might affect WTP. These factors including (1) respondent characteristics, (2) viewer’s satisfaction with NHK’s Promises, and (3) the public value of NHK. The results show that variables such as “age”, “satisfaction with NHK’s program”, and “cities with 100-300 household population” strongly affect the WTP. Taking the Promises into consideration, “better programs”, “relationship with viewers” and “benefit of local society” are extracted significant. The public nature of NHK is broke down into 19 categories to help positioning the role of NHK as a public medium. “Producing programs that are not influenced by advertisements”, “providing information that people can share and discuss”, and “Passing Japanese traditions and cultures to younger generation” are all factors having significant influence on WTP (Tsuji & Miyahara, 2007). The Committee believes that these analyses can be utilized for setting up managerial strategies for public broadcasting. To get a more holistic view, the CVM techniques used by the 4 countries are compared in Table 3.. 28.

(32) Table 3: A comparison between the CVM studies in public service broadcasting Research Background. Sampling Unit Individual.. RTÉ is being called upon to justify the level RTÉ of of TV license fee. The Ireland research is conducted (December by Lansdowne Market Research and is funded 2002) by RTÉ.. Individual.. Conducted by The Committee in April, (conducted 2006. in April, 2006). Factors in Question. 【Gabor-Granger Respondents as (1) Method】 consumers v.s. as Dichotomous Choice (₤5, ₤10, ₤15, ₤20, (2) citizens ₤30, ₤40, ₤50/ per month) . Conducted by BBC & Human Capital in 2004 BBC of UK before the revision of the Royal Charter for (conducted the next decade. The in 2003 research gives the -2004) overwhelmingly support for the rise of license fee.. NHK of Japan. Elicitation Format. . Open-ended questions. Respondents are asked to distinguish (subscription format) whether their answer is from a household or an individual perspective. Individual WTP1009. . Three-stage dichotomous. . WTA1009 . 29. Value Estimation. Distinguishes the citizen value from consumer value. Total value:. Program genre (25 genres). (two times higher than the current license fee). BBC Approval and individual service approval.. ₤20.7 a month. Socio-economical factors. (age / gender / SES / region / multi-channel access). Consumer value:. The domestic/ international competing service. Household WTP: €21.05 / per month (=€252.6 per year). The usage of and/ or satisfaction with the RTE service. Household/ individual WTP. ₤18.35 a month. Higher than the price €150 that is to be raised d in 2003. Socio-economical factors.. Respondent characteristics. 1,780 yen monthly Viewer’s satisfaction with NHK’s per person, higher than the current Promises receiving fee (1,395 The public value of NHK. yen).

(33) Research Background. CBC of Canada (1998). The parliamentary appropriation has decreased while the competition from domestic/international commercial counterparts has increased at the same time in the 90s.. Sampling Unit Household. Elicitation Format 2 Open-ended questions. (the questionnaire is assigned to the (use value and one who is nonuse value, responsible for the respectively) household budget allocation). 30. Factors in Question. Value Estimation. . 【scope of use】Use value and nonuse value as well。. . Types of programming (10 categories of programming). . Attitudes toward CBC. . Frequencies of viewing. $ 644 million with $488 million comes from use value and $175 from non-use value. Lower than the appropriation of the year ($800 million).. . Socio-economical factors..

(34) 2.3.5 Key Explanatory Variables Affecting Citizens’ WTP As the cross-national comparison shown in Table 4, WTP is influenced largely by the factors below: (1) Socio-economic variables: as a minimum requirement, every survey should collect a core set of socio-economic characteristics, such as level of education, income and age. The higher the income/age, the higher the WTP. Number of child seems influential when the educational function of PSB is considered. Some studies also suggest a regional effect, with respondents who live in metropolis would pay less in general (Delaney & O’Toole, 2004). The result from Japan also shows a negative relationship between size of city and WTP although the result doesn’t reach its significant. The region variable is worth noticing while in Taiwan the imbalanced development of media industry is also predominant. (2) Usage of PSB: the usage here refers to the receiving hours of the respondents. More hours spent in watching PSB programs indicates a higher use-value and is expected to increase the amount of WTP. (3) Public Values realized by PSB: since PSB is commissioned to carry out some social function, the extent to which these functions being realized becomes a good determinant in predicting WTP. Tsuji & Miyahara (2007) break the public value of NHK down into 19 categories, and measure the audience’s expectation of and satisfaction with NHK. The gap between expectation and satisfaction is also examined. By doing so, the public values that NHK should fulfill can be clarified and identified from the viewpoint of the audiences. This approach is also appropriate in Taiwan for it can give PTS the insight what kind of public values is heavily embraced by Taiwan citizens.. 31.

(35) (4) Attitudes of the Citizens toward PSB: Many studies implement the attitudinal measurement to see whether the respondents’ attitude toward PSB would influence the amount the WTP. The attitudinal measurement includes variables such as satisfaction with PSB regarding the service it provides, the achievement of the promises, satisfaction with the service provided by the commercial broadcasters, and opinions on the programming. The higher/lower satisfaction that the respondents possess toward public/ commercial broadcaster, the higher the WTP. The satisfaction with PSB and commercial broadcasting indicate the “substitutability” of PSB. This study proposed that the “substitutability” is of particular importance for PTS. With the proliferation of cable channels in Taiwan where most audience’s wants for information and entertainment can be satisfied by commercial broadcasters, the raison d’être of PTS is undermined. Chan-Olmsted & Kim (2002) portrayed the brand image of PSB to clarify the position of public television in a multichannel environment. Schwer & Daneshvary (1995) examined willingness to pay for PBS (the PSB in the US) among residents of Las Vegas, and concluded that people’s support to PBS diminished when PBS is confronted with the cable channels of high quality (“PBS look-alike channels”, such as CNN, Discovery channel, and A&E). In this study, satisfactions with commercial TV5 and attitudes on PTS funding issues are examined to see how the attitudes affect citizens’ WTP in the context of Taiwan.. 5. “Satisfactions with commercial TV” is a determinant that is often investigated in previous studies. However, unlike the pay-TV industry in the US where competitions are active and satisfactions can be approved, Taiwan’s pay-TV sector lags behind that of Asian markets, and competition has been limited (CASBAA, 2008). Objectively speaking, Taiwan’s pay-TV industry underperforms in a number of areas. But for the purpose of this study, it is the subjective satisfaction as a whole that matters. As a result, “satisfaction” needs to be interpreted carefully in this regard and one must be aware of the differences if cross-national comparison is to be made. 32.

(36) CHAPTER 3 RESEARCH DESIGN AND SURVEY Telephone interview is utilized in this study. Before the telephone interview, a focus group was held and a pretest was conducted to determine the reasonable price and to ensure the validity of the questionnaire. The design and the procedure of the survey are illustrated in this chapter. 3.1 Focus Group The most obvious way that focus group can assist in a survey is to provide evidence of how the respondents typically talk about the topic in question, and to ensure that the researcher has a picture of participants’ thinking as completely as possible (Morgan, 1988). In the context of this CV survey, focus group was held before the telephone survey so that a more in-depth insight about people’s perception/ cognition of public service broadcasting in Taiwan can be obtained, and a reasonable price level for valid bidding can thus be designed as well. Participants were selected on a socio-economical basis: those who aged between 25-50, and those who are responsible for their household budget allocation were chosen. Participants were also selected on particular characteristics such as gender, levels of education and their number of child in order to facilitate interaction (see Table 4). Nine participants were recruited and the focus group was held on December 4 in Research Center for Survey Research, Academia Sinica. Table 4: Characteristics of the participants in focus group Gender. Age. Level of Education. Marriage/ Child. Participant A. F. 53. Senior vocational school. Married/ 3. Participant B. M. 25. University. Married/ 1. Participant C. F. 34. Senior vocational school. Married/ 1. Participant D. M. 44. Senior high school. Married/ 2. Participant E. F. 49. Vocational college. Married/ 1. 33.

(37) Participant F. M. 46. Junior high school. Married/ 2. Participant G. F. 58. Junior college. Married/ 0. Participant H. M. 25. College. Single/ 0. Participant I. F. 39. Senior high school. Married/ 2. 3.1.1 Execution Process and Results The participants are designated to execute five evaluation tasks after the warm-up asking their TV viewing habits. The tasks are: (1) WTP for use value, (2) WTP for nonuse value, (3) WTP for an ideal PSB, (4) WTP after they learned the current funding level, and (5) value estimation considering the monthly charge of cable service (600 NTD) as a reference point. At the beginning of the session, respondents were given an answer sheet to respond their willingness to pay for PTS in terms of their use value and nonuse value. They are also required to complete a short questionnaire which is designed to evaluate their knowledge toward the current public service broadcasting in Taiwan. The hypothetical scenario dealing with the use value of PTS is framed as follow: PTS is now funded largely by government grant so it can produce high quality programs regardless of the rating and without the intervention of political force.. Imagine that now the government would no longer provide the fund to. PTS, and PTS cannot but cut down the production cost, give up the production of high quality programs, and instead pursuit the maximum audience to gain the advertising revenue, just like any other commercial channels do. Considering the benefit that PTS brings to your family, what’s the maximum amount of money that your household would be willing to pay every year to maintain the operation of public service broadcasting?. 34.