Income and distance-decay effects on willingness to pay estimated by the contingent valuation method

This study suggests a methodology for enhancing accuracy in evaluating amenity by the contingent valuation method when household's willingness to pay (WTP) is dependent to its income and the distance between a respondent's residence and the location of a target facility. Using a linear city model, this study demonstrates the influences of income and distance-decay effects on WTP. Simulations are performed to check the validity of the model, as well as to predict consequences when income and distance-decay effects are not properly treated. Finally, the suggested methodology is applied to two real cases. The estimation results from a structural model show that the calculated total benefit varies largely when income and distance-decay effects exist and are ignored. Also, an ad hoc model generates significantly different estimates from the utility difference model this study adopted. The difference in estimates suggests that the total benefit has to be estimated by a structural model.     

Convergent validity between willingness to pay elicitation methods: an application to Grand Canyon whitewater boaters

We directly compare trip willingness to pay (WTP) values between dichotomous choice contingent valuation (DCCV) and discrete choice experiment (DCE) stated preference surveys of private party Grand Canyon whitewater boaters. The consistency of DCCV and DCE estimates is debated in the literature, and this study contributes to the body of work comparing the methods. Comparisons were made of mean WTP estimates for four hypothetical Colorado River flow-level scenarios. Boaters were found to most highly value mid-range flows, with very low and very high flows eliciting lower WTP estimates across both DCE and DCCV surveys. Mean WTP precision was estimated through simulation. No statistically significant differences were detected between the two methods at three of the four hypothetical flow levels.     

Tourist Support for Marine Protection in Nha Trang,Viet Nam

Environmental planners often propose tourism as a means of financing programmes to protect significant environmental areas. Surveys of tourists can provide useful information about the significance of environmental problems, trade-offs among policy objectives, willingness to pay (WTP) for protection programmes and preferences for different payment mechanisms. In Khanh Hoa Province, the provincial People's Committee, the Ministry of Fisheries and the World Conservation Union are working to implement Viet Nam's first marine protected area (MPA) in Nha Trang Bay. This paper reports the results of a survey of local and other Vietnamese and foreign tourists to islands that will be included in the MPA. The majority of respondents thought rubbish on the beaches, water pollution and vendors on beaches were problems and that the MPA was a good idea. Foreign tourists were significantly more likely to perceive environmental problems than were Vietnamese tourists, and persons who agreed there were environmental problems were significantly more likely to support the concept of an MPA, despite the potential for possible economic effects with distributive consequences. WTP for protection was modest and positively correlated with education and income. Although foreign tourists were on average willing to pay more, a larger proportion of Vietnamese tourists were willing to pay some amount to support the MPA. Analyses indicate that changes in income and education expected with economic development will increase both awareness of problems and WTP for protection. The results of this analysis are both encouraging and cautionary. The need for an MPA is clearly recognized by most tourists, and most tourists are willing to pay small fees to support the MPA. Given that education has significant impacts on both perceptions of problems and WTP, educational programmes may be an effective strategy for managing the competing objectives of protection and use.     

Public support for ecosystem restoration in the Hudson River Valley,USA

We applied the Theory of Planned Behavior to help understand the relationships between environmental beliefs, support for ecosystem restoration actions, and willingness to pay (WTP) for restoration and protection goals in the Hudson River estuary, New York State, USA. We conducted a mail survey with 3,000 randomly-chosen local residents of the Hudson River estuary in the fall of 1999. As hypothesized, the broad ecosystem restoration goals of the Hudson River Estuary Action Plan were more strongly supported than the corresponding specific implementation actions. We found that beliefs and past behavior were better explanatory variables than sociodemographic characteristics for explaining people's support for ecosystem restoration actions and WTP for restoration and protection goals. Because ecosystem restoration goals appear to be more generally acceptable than specific restoration actions, proponents of restoration programs should not become complacent about the need for active public outreach and involvement even if initial restoration program discussions have been low in controversy. Efforts to assess and foster support for ecosystem restoration should be targeted toward audiences identified on the basis of beliefs and past behaviors rather than on sociodemographic characteristics.     

A comparison of alternative contingent valuation elicitation treatments for the evaluation of complex environmental policy

Attempts to evaluate the economic benefits associated with complex environmental policies, using the contingent valuation (CV) method, have been dogged by controversy. In particular, debate has centred on the influence of embedding and related effects on the validity of CV willingness-to-pay (WTP) estimates. This paper discusses these effects in the context of identifying the most appropriate WTP elicitation treatment to evaluate the willingness to pay for the various elements of a multi-dimensional environmental policy. The findings of an empirical experiment demonstrate that a top-down allocation treatment, which uses independent sub-samples for individual policy components, provides the most reliable treatment to value all aspects of a multi-dimensional policy, whilst also overcoming embedding bias problems.     

Can you be bothered? The role of participant motivation in the valuation of species conservation measures

Group-based approaches to the elicitation of stated preferences are considered particularly suitable for valuing unfamiliar or complex environmental goods. While such exercises provide participants with detailed information and time to think and deliberate, they require a considerable degree of motivation from the respondents. Effects of motivation on willingness to pay (WTP) tend to be ignored within the valuation research community, although similar effects have been reported in psychological literature. In this study, a novel approach using video recordings and behaviour coding of participants in group-based Market Stall meetings was employed to measure motivation as well as its impact on WTP and the theoretical and convergent validity of stated WTP. Indicators of motivation correlated significantly with both WTP statements and their validity, with more motivated individuals stating higher and more valid bids. These findings suggest that the recognition of motivation is an important novel element of research into stated preferences, particularly with respect to usefulness and quality of WTP measures.     

Economic Value of Instream Flow for Non-Commercial Whitewater Boating Using Recreation Demand and Contingent Valuation Methods

Whitewater river kayaking and river rafting require adequate instream flows that are often adversely affected by upstream water diversions. However, there are very few studies in the USA of the economic value of instream flow to inform environmental managers. This study estimates the economic value of instream flow to non-commercial kayakers derived using a Travel Cost Method recreation demand model and Contingent Valuation Method (CVM), a type of Contingent Behavior Method (CBM). Data were obtained from a visitor survey administered along the Poudre River in Colorado. In the dichotomous choice CVM willingness to pay (WTP) question, visitors were asked if they would still visit the river if the cost of their trip was $Y higher, and the level of $Y was varied across the sample. The CVM yielded an estimate of WTP that was sensitive to flows ranging from $55 per person per day at 300 Cubic Feet per Second (CFS) to a maximum $97 per person per day at flows of 1900 CFS. The recreation demand model estimated a boater’s number of trips per season. We found the number of trips taken was also sensitive to flow, ranging from as little as 1.63 trips at 300 CFS to a maximum number of 14 trips over the season at 1900 CFS. Thus, there is consistency between peak benefits per trip and number of trips, respectively. With an average of about 100 non-commercial boaters per day, the maximum marginal values per acre foot averages about $220. This value exceeds irrigation water values in this area of Colorado.     

A conspectus on valuing the environment

A distinction is drawn between opportunity cost and willingness‐to‐pay (WTP) valuations of the environment and the latter are shown to be appropriate only in situations where no agreed environmental standards exist. WTP measures of environmental effects form the basis of the Pigovian model of externalities. This model is applicable where individuals directly perceive environmental effects as nuisances or the reverse. But with many environmental problems direct perception does not occur and the Pigovian model is not applicable. In these circumstances it is wrong to talk of biases in WTP estimations since no ‘true’ WTP exists. A decision rule grounded in WTP could still be used but is open to serious objections. The preferred approach is through the development of environmental standards.     

Air quality assessment by contingent valuation in Ji'nan, China

Along with urbanization and environmental deterioration within China, many residents' desire for improved air quality has increased. To address this topic, this study focuses on the relationship between poor air quality and residents' willingness to pay for improved air quality in the city of Ji'nan. As a means of quantifying an individual's willingness to pay (WTP) for improved air quality, a contingent valuation method (CVM) was employed. A sample of 1500 residents was chosen, based on the stratified sampling method. The respondents' WTP was then elicited through a series of face-to-face interviews, conducted using a range of hypothetical, open-ended scenario questions. The results showed that 59.7% of respondents were able to express a positive WTP, and that the average WTP was 100 Chinese Yuan (CNY) per person, per year. In order to establish the relationship between endogenous variables and WTP, both a Probit model on the probability of a positive WTP, and a stepwise regression model were constructed. Most parameters in the econometric analysis demonstrated the expected results. It was found that annual household income, expenditure on the treatment of respiratory diseases and workers in the family significantly influenced WTP. The rates of positive WTP and the monetary amount were also larger for men than for women. Unlike developed countries, most respondents regard air quality improvement as a government responsibility in that more than 40% of respondents had no incentive to bear the costs of attempting to achieve better air quality, indicating a relatively low environmental consciousness.     

‘Been There Done That’: Disentangling Option Value Effects from User Heterogeneity When Valuing Natural Resources with a Use Component

Endogeneity bias arises in contingent valuation studies when the error term in the willingness to pay (WTP) equation is correlated with explanatory variables because observable and unobservable characteristics of the respondents affect both their WTP and the value of those variables. We correct for the endogeneity of variables that capture previous experience with the resource valued, humpback whales, and with the geographic area of study. We consider several endogenous behavioral variables. Therefore, we apply a multivariate Probit approach to jointly model them with WTP. In this case, correcting for endogeneity increases econometric efficiency and substantially corrects the bias affecting the estimated coefficients of the experience variables, by isolating the decreasing effect on option value caused by having already experienced the resource. Stark differences are unveiled between the marginal effects on WTP of previous experience of the resource in an alternative location versus experience in the location studied, Newfoundland and Labrador (Canada).     

Preventing land loss in coastal Louisiana: estimates of WTP and WTA

A dichotomous-choice contingent-valuation survey was conducted in the State of Louisiana (USA) to estimate compensating surplus (CS) and equivalent surplus (ES) welfare measures for the prevention of future coastal wetland losses in Louisiana. Valuations were elicited using both willingness to pay (WTP) and willingness to accept compensation (WTA) payment vehicles. Mean CS (WTP) estimates based on a probit model using a Box-Cox specification on income was $825 per household annually, and mean ES (WTA) was estimated at $4444 per household annually. Regression results indicate that the major factors influencing support for land-loss prevention were income (positive, WTP model only), perceived hurricane protection benefits (positive), environmental and recreation protection (positive), distrust of government (negative), age (positive, WTA model only), and race (positive for whites).     

Assessing Societal Impacts When Planning Restoration of Large Alluvial Rivers: A Case Study of the Sacramento River Project, California

Studies have shown that ecological restoration projects are more likely to gain public support if they simultaneously increase important human services that natural resources provide to people. River restoration projects have the potential to influence many of the societal functions (e.g., flood control, water quality) that rivers provide, yet most projects fail to consider this in a comprehensive manner. Most river restoration projects also fail to take into account opportunities for revitalization of large-scale river processes, focusing instead on opportunities presented at individual parcels. In an effort to avoid these pitfalls while planning restoration of the Sacramento River, we conducted a set of coordinated studies to evaluate societal impacts of alternative restoration actions over a large geographic area. Our studies were designed to identify restoration actions that offer benefits to both society and the ecosystem and to meet the information needs of agency planning teams focusing on the area. We worked with local partners and public stakeholders to design and implement studies that assessed the effects of alternative restoration actions on flooding and erosion patterns, socioeconomics, cultural resources, and public access and recreation. We found that by explicitly and scientifically melding societal and ecosystem perspectives, it was possible to identify restoration actions that simultaneously improve both ecosystem health and the services (e.g., flood protection and recreation) that the Sacramento River and its floodplain provide to people. Further, we found that by directly engaging with local stakeholders to formulate, implement, and interpret the studies, we were able to develop a high level of trust that ultimately translated into widespread support for the project.     

Economic valuation of urban forest benefits in Finland

Urban development projects may cause loss of amenity values of green areas, which should be taken into consideration in planning. Therefore, quantitative information on residents' valuation concerning urban forests is needed for assessing urban land use. The purpose of this investigation was to study the valuation of urban forests in two different urban environments Joensuu and Salo, Finland. The aims were to study the attitudes towards and benefits related to the use of urban forests and, in particular, to measure the valuations in monetary terms using contingent valuation, i.e. measure the residents' willingness-to-pay for larger wooded recreation areas and for small forested parks. Urban forests were seen in both towns as clearly producing positive benefits rather than causing negative effects. The negative features of forests were related to the management of the areas rather than their existence. The main values were related to nature and social functions of forests. In contrast, timber production achieved a distinctively low priority in both study towns. The results stress the importance of defining urban forest policies for municipalities in Finland. More than two-thirds of the respondents were willing to pay for the use of recreation areas. Good location and active management raised the average WTP. Moreover, approximately half of the respondents were willing to pay for preventing construction in urban forests. The results also show that the monetary value of amenity benefits in recreation areas is much higher than the present maintenance costs. The examples concerning the advantageousness of construction on green areas suggest that a limit could be found where the infill of housing areas is not worthwhile from the point of view of society, if the losses of green space benefits are taken into account.     

Effect of Human Activities on Overall Trend of Sedimentation in the Lower Yellow River,China

The Yellow River has been intensively affected by human activities, particularly in the past 50 years, including soil–water conservation in the upper and middle drainage basin, flood protection in the lower reaches, and flow regulation and water diversion in the whole drainage basin. All these changes may impact sedimentation process of the lower Yellow River in different ways. Assessing these impacts comprehensively is important for more effective environmental management of the drainage basin. Based on the data of annual river flow, sediment load, and channel sedimentation in the lower Yellow River between 1950 and 1997, the purpose of this paper is to analyze the overall trend of channel sedimentation rate at a time scale of 50 years, and its formative cause. It was found in this study that erosion control measures and water diversion have counteractive impacts on sedimentation rate in the lower Yellow River. Although both annual river flow and sediment decreased, there was no change in channel sedimentation rate. A regression analysis indicated that the sedimentation in the lower Yellow River decreased with the sediment input to the lower Yellow River but increased with the river flow input. In the past 30–40 years, the basin-wide practice of erosion and sediment control measures resulted in a decline in sediment supply to the Yellow River; at the same time, the human development of water resources that required river flow regulation and water diversion caused great reduction in river flow. The former may reduce the sedimentation in the lower Yellow River, but the reduction of river flow increased the sedimentation. When their effects counterbalanced each other, the overall trend of channel sedimentation in the lower Yellow River remained unchanged. This fact may help us to better understand the positive and negative effects of human activities in the Yellow River basin and to pay more attention to the negative effect of the development of water resources. The results of this study demonstrate that, if the overuse of river water cannot be controlled, the reduction of channel sedimentation in the lower Yellow River cannot be realized through the practice of erosion and sediment control measures.     

Estimating the value of improved wastewater treatment: The case of River Ganga,India

In this paper we employ a stated preference environmental valuation technique, namely the choice experiment method, to estimate local public’s willingness to pay (WTP) for improvements in the capacity and technology of a sewage treatment plant (STP) in Chandernagore municipality, located on the banks of the River Ganga in India. A pilot choice experiment study is administered to 150 randomly selected Chandernagore residents and the data are analysed using the conditional logit model with interactions. The results reveal that residents of this municipality are willing to pay significant amounts in terms of higher monthly municipality taxes to ensure the full capacity of the STP is used for primary treatment and the technology is upgraded to enable secondary treatment. Overall, the results reported in this paper support increased investments to improve the capacity and technology of STPs to reduce water pollution, and hence environmental and health risks that are currently threatening the sustainability of the economic, cultural and religious values this sacred river generates.     

Willingness to pay towards a public good: how does a refund option affect stated values?

Mandatory taxes and/or voluntary contributions are commonly adopted as the payment vehicle when eliciting willingness to pay (WTP) in environmental valuation studies. While mandatory taxes may arouse negative feelings, voluntary contributions may lead to strategic behaviour (over bidding) or free riding (under bidding). In this paper, we explore an alternative payment vehicle which avoids the draconian undertones associated with taxes and may be more incentive compatible than a voluntary contribution – a tax that incorporates a refund option. The template for such a payment vehicle is the value added tax charged to tourists in Ireland, but which can be reclaimed on exiting the country. In the context of raising public funds to support the conservation of rural countryside landscape, a comparison is made between the elicited WTP via a mandatory tax and that elicited via the alternative payment method incorporating a refund option. While we observe similar participation rates between the two payment methods, the refund option reveals a higher stated WTP.     

Contingent Valuation and Real Economic Commitments: Evidence from Electric Utility Green Pricing Programmes

This paper presents the findings of two 'green pricing' studies conducted to evaluate public support of utilities' investments in renewable energy technologies. These studies compared hypothetical WTP statements with actual payment commitments. The results of these studies indicate that the CVM can be an accurate indicator of an individual's WTP, but that it is an unreliable predictor of which individuals will actually pay. This has important implications for aggregating mean WTP estimates of the value of environmental benefits. It also suggests that market simulations can be useful for predicting programme participation rates when voluntary donations are used as a payment vehicle.     

新安江流域生态补偿政策效果评价研究

本文基于流域生态补偿的经济学原理,以成本效益分析(CBA)为基本框架,通过对新安江流域生态补偿政策实施的成本和效益进行定性定量的分析,对黄山市实施新安江流域生态补偿政策的成效比E1以及外部效应内部化程度指数E2进行计算,进而科学合理地衡量新安江流域生态补偿政策的实施效果。2010—2013年,黄山市在新安江流域生态补偿工作中的成本总计189.06亿元,黄山市环境效益增加33.52亿元,黄山市新安江流域生态补偿工作成效比E1为0.24,外部效应内部化程度指数E2为0.81,说明新安江流域生态补偿起到了一定的效果,黄山市环境效益预测结果表明,流域生态补偿的效果会随着时间的推移更加明显。由此提出建议,现阶段黄山市应继续以解决经济发展与环境保护的矛盾为重心,同时注重流域生态补偿工作的落实。     

Integrated Wastewater Management Reporting at Tourist Areas for Recycling Purposes, Including the Case Study of Hersonissos, Greece

Wastewater treatment facilities in tourist areas, in comparison to other municipal facilities, require specific configurations and additional management actions in order to achieve a reliable and cost-effective treatment. For example, the same facility operates during winter with minimum flows and in summer with peak flows. Moreover, careful effluent management is required to minimize environmental impact and health effects on tourists. In this study, effluent management data, including quantitative and qualitative effluent characteristics, reuse, and economic aspects of the Hersonissos Wastewater Treatment Plant (WTP) in Greece, are discussed. It has been designed to treat both municipal wastewater from the Hersonissos Municipality and septage from the wider area. Analysis of effluent quantitative data showed two flow peaks in the summer period and only one in winter. The WTP was found to provide a reliable level of treatment in terms of biochemical oxygen demand (95.9%), total suspended solids (97.2%), and total nitrogen (87.7%) removal, but increased numbers of fecal coliforms were measured at some peak flow periods, suggesting the need for additional management strategies. Effluent is reused mainly for agricultural irrigation; secondary uses include fire protection and landscape irrigation. Economic analysis showed that for each cubic meter treated, the total annual economic cost for treatment, filtration, and reuse infrastructure was 1.07 €, 0.05 €, and 0.08 €, respectively.     

Exploring Values,Context and Perceptions in Contingent Valuation Studies: The CV Market Stall Technique and Willingness to Pay for Wildlife Conservation

Public preferences for conservation and environmental management may be identified in willingness to pay (WTP) studies. Normally part of a contingent valuation exercise, WTP studies elicit monetary estimates of non-market economic goods. This paper describes a new approach to WTP, the CV Market Stall, a technique that adds a discursive, qualitative dimension to contingent valuation. It is suggested that the CV Market Stall technique is a good method for exploring attitudes and responses to environmental project proposals. The flexible format, with an emphasis upon information provision, discussion and learning would also allow contingent valuation to be extended to much more complex and uncertain environmental issues.