Residents' willingness to pay for improved liquid waste treatment in urban Ethiopia: results of choice experiment in Addis Ababa

This paper discusses residents’ willingness to pay (WTP) for improved liquid waste treatment in Addis Ababa based on data collected in 2011 using random parameter logit model. Findings indicate that respondents are willing to contribute for improved liquid waste treatment with higher quantity and quality. Their mean WTP for the medium improvement scenario is found to be 15.53 ETB (0.93 USD) per month. The compensation surplus tends to increase from the status quo to the alternative scenarios with aggressive improvement. Finally, the paper concludes by indicating the socioeconomic difference across households, and sub-cities need to be considered in designing environmental protection plans for the city.     

On the value of large predators in Sweden: a regional stratified contingent valuation analysis

This paper contributes with an applied policy analysis of the predator preservation policy in Sweden. We estimate the overall mean willingness to pay (WTP) for preserving the four large predators in the Swedish fauna by applying the contingent valuation method. Using survey data from 2004 we find that 50 percent of the Swedish population is willing to contribute financially toward implementation of the predator policy package, and that the estimated overall mean WTP is approximately SEK 290. Further, we test for spatial differences in attitudes and WTP and find that respondents in Stockholm have the highest overall mean WTP, while respondents living in wolf-territories have the lowest. Our mean WTP measure is flawed with upward bias, since we cannot estimate the willingness to accept for those with clearly negative preferences regarding the predator policy package (e.g. hunters). In this paper, we set their WTP equal to zero. Thus, we cannot rule out the possibility that the mean willingness to pay is, in fact, negative, i.e. the social-value of implementing the predator policy is negative. Finally, the estimates of the overall WTP are sensitive to response-uncertainty. When the respondents indicate uncertainty about their valuation, they tend to state higher values.     

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.     

Scope effects of respondent uncertainty in contingent valuation: evidence from motorized emission reductions in the city of Nairobi,Kenya

This study analyzed the scope effects of respondent uncertainty in contingent valuation (CV) by evaluating whether willingness to pay (WTP) estimates were sensitive to changes in the magnitudes of motorized emission reductions in the city of Nairobi, Kenya. The WTP estimates were elicited through the conventional payment card (PC), stochastic payment card (SPC) and the polychotomous payment card (PPC) formats. While SPC and PPC formats were used to capture respondent uncertainty, the PC format captured respondent certainty regarding the amounts individuals were WTP for emission reductions. Based on parametric and nonparametric analysis, results show that certain (PC) respondents stated significantly larger WTP amounts for larger emission reductions than for smaller reductions. Conversely, uncertain (SPC and PPC) respondents stated smaller amounts for larger emission reductions than certain (PC) respondents. The implication is that though respondents were sensitive to the scope of motorized emission reductions, respondent uncertainty lowered their sensitivity to scope.     

Valuation of National Park System Visitation: The Efficient Use of Count Data Models, Meta-Analysis, and Secondary Visitor Survey Data

The National Park Service (NPS) currently manages a large and diverse system of park units nationwide which received an estimated 279 million recreational visits in 2011. This article uses park visitor data collected by the NPS Visitor Services Project to estimate a consistent set of count data travel cost models of park visitor willingness to pay (WTP). Models were estimated using 58 different park unit survey datasets. WTP estimates for these 58 park surveys were used within a meta-regression analysis model to predict average and total WTP for NPS recreational visitation system-wide. Estimated WTP per NPS visit in 2011 averaged $102 system-wide, and ranged across park units from $67 to $288. Total 2011 visitor WTP for the NPS system is estimated at $28.5 billion with a 95% confidence interval of $19.7–$43.1 billion. The estimation of a meta-regression model using consistently collected data and identical specification of visitor WTP models greatly reduces problems common to meta-regression models, including sample selection bias, primary data heterogeneity, and heteroskedasticity, as well as some aspects of panel effects. The article provides the first estimate of total annual NPS visitor WTP within the literature directly based on NPS visitor survey data.     

ARE RURAL RESIDENTS WILLING TO PAY ENOUGH TO IMPROVE DRINKING WATER QUALITY?1

ABSTRACT: The concentrations of iron and sulfate in community water supplies are a concern for a number of areas in southwestern Minnesota. This study used the contingent valuation method to determine how much consumers would be willing to pay to improve their drinking water quality. On average, individuals were willing to pay US$5.25 per month (in 1995 U.S. dollars) to reduce the level of iron and US$4.33 per month to reduce the level of sulfate in their water to the USEPA's secondary standards for drinking water quality. Respondents with negative perceptions of their drinking water quality were willing to pay more to improve water quality. The aggregate annual willingness to pay (WTP) for all consumers in community water systems in southwestern Minnesota that were out of compliance with water quality standards were estimated to be US$2.4 million and US$2.0 million (in 1995 dollars) for reducing the levels of iron and sulfate, respectively. Yet the total WTP of consumers who use small community water systems may not be enough to pay the full cost of providing improved water in those systems. Economies of scale in water treatment and difficulties in financing improvements mean that technical innovation, government assistance, or institutional changes may be needed to improve water quality in these areas.     

A COST‐BENEFIT ANALYSIS OF WATER QUALITY PROTECTION IN THE CATAWBA BASIN1

ABSTRACT: The primary objective of this study was to perform a cost‐benefit analysis of maintaining the current level of water quality in the Catawba River basin. Economic benefits were estimated using a stated preference survey method designed to value respondents' willingness to pay for a management plan to protect water quality in the Catawba basin over time. From the surveys conducted with 1,085 area residents, we calculated an annual mean willingness to pay of $139 for the management plan, or more than $75.4 million for all taxpayers in the area. Over the five‐year time horizon in which respondents were asked to pay for the management plan, this resulted in a total economic benefit of $340.1 million. The Watershed Analysis Risk Management Framework model was used to estimate the amount of management activities needed to protect the current level of water quality in the basin over time. Based on the model results, the total cost of the management plan was calculated to be $244.8 million over a ten‐year period. The resulting cost‐benefit analysis indicated that the potential benefits of this management plan would outweigh the costs by more than $95 million.     

VISITOR VALUES AND LOCAL ECONOMIC IMPACTS OF RIPARIAN HABITAT PRESERVATION: CALIFORNIA'S KERN RIVER PRESERVE1

ABSTRACT: Preservation of the few remaining ecologically vital riparian areas in the southwestern United States is a significant policy concern. This article reports on two economic aspects of preserving a nationally renowned riparian birding area in Southern California. First, the article examines visitor willingness to pay (WTP) for habitat restoration and estimates an annual WTP of US $77 per visitor to preserve the habitat, about a half‐million dollars a year for estimated visitor numbers in 2000 and 2001. Second, it documents visitor expenditures in the local economy to be approximately three‐quarters of a million dollars per year. This direct visitor spending attributable to the riparian habitat generates around US $1.3 million in increased local business activity in this relatively remote rural area.     

‘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).     

Information and Willingness to Pay in a Contingent Valuation Study: The Value of S. Erasmo in the Lagoon of Venice

This paper reports on a contingent valuation (CV) study eliciting willingness to pay (WTP) for a public program for the preservation of lagoon, beach and infrastructure in the island of S. Erasmo in the Lagoon of Venice, Italy. We use split samples to investigate the effect of providing a summary of reasons for voting in favor and against the program before the referendum valuation question. Reminding respondents of the reasons for voting for or against the program increases WTP among less highly educated respondents, and decreases WTP among more highly educated respondents.     

Hypothetical and Real Economic Commitments,and Social Status,in Valuing a Species Protection Programme

There has been a long-running debate on the reliability and validity of the contingent valuation method, connected with the hypotheticality of the situation when respondents are asked to state their willingness to pay (WTP) for species protection (the so-called 'hypothetical bias'). Additionally, a number of recent arguments regarding donations to good causes and the benefits of achieving social status have questioned the motives of respondents who have stated their WTP. An experiment at the University of Klagenfurt tested for hypothetical bias by asking participants to state their hypothetical and real WTP for a species protection programme in the Hohe Tauern national park. Hypothetical and real WTP differed significantly. Additionally, it emerged that the pure ecological motive for stating a WTP might be concealed by arguments about donating in order to achieve social status and contributing to a good cause.     

Lexicographic preference in biodiversity valuation: Tests of inconsistencies and willingness to pay

Previous contingent valuation (CV) studies on biodiversity have indicated that as much as one-quarter of the respondents show lexicographic preferences when facing biodiversity-money trade-offs. This behaviour is incompatible with welfare theory underlying CV, and thus questions the validity and reliability of the outcome of CV of changes in biodiversity. However, it is difficult from CV responses to distinguish between strict and modified lexicographic preferences, and those attaching a high value to biodiversity. This paper adds to the empirical evidence showing that what at first hand seems to represent strict lexicographic preferences is at most representing modified lexicographic preferences, and probably rather represent just high valuation of biodiversity. Data on both hypothetical and actual willingness to pay (WTP) from a CV study on biodiversity were used to perform tests of inconsistent attitudes to estimate the maximum share of non-compensatory preferences for biodiversity. The results show that there are very few respondents in the group that consistently state high preference for biodiversity preservation and show clear reluctance to trade-off biodiversity with other goods. However, this group also had higher WTP, both hypothetical and actual, than the reference group. This is consistent with exchange preferences and steep indifference curves. Thus, people with lexicographic preferences for biodiversity are probably less numerous than previously indicated.     

Using a choice experiment to measure the environmental costs of air pollution impacts in Seoul

Air pollution, a by-product of economic growth, has been incurring extensive environmental costs in Seoul, Korea. Unfortunately, air pollution impacts are not treated as a commercial item, and thus it is difficult to measure the environmental costs arising from air pollution. There is an imminent need to find a way to measure air pollution impacts so that appropriate actions can be taken to control air pollution. Therefore, this study attempts to apply a choice experiment to quantifying the environmental costs of four air pollution impacts (mortality, morbidity, soiling damage, and poor visibility), using a specific case study of Seoul. We consider the trade-offs between price and attributes of air pollution impacts for selecting a preferred alternative and derive the marginal willingness to pay (WTP) estimate for each attribute. According to the results, the households' monthly WTP for a 10% reduction in the concentrations of major pollutants in Seoul was found to be approximately 5494 Korean won (USD 4.6) and the total annual WTP for the entire population of Seoul was about 203.4 billion Korean won (USD 169.5 million). This study is expected to provide policy-makers with useful information for evaluating and planning environmental policies relating specifically to air pollution.     

Investigating household preferences for kerbside recycling services in London: a choice experiment approach

Recent developments in national and European Union waste management policy have prompted considerable interest in alternative waste management programs, such as recycling, which could divert a portion of the municipal solid waste stream from landfills. This paper examines household preferences for kerbside recycling services and uses a stated preference choice experiment method to estimate households' valuation of such services. Using a sample of 188 households in the London area, the empirical analysis yields estimates of the willingness to pay for the number of 'dry' materials collected, the collection of compost, textile collection and the frequency of collection.     

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.     

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).     

Stakeholder Willingness to Pay for Watershed Restoration in Rural Bolivia1

Abstract: Two CVM surveys were administered to 211 urban households and 188 rural farmer‐irrigators in the Comarapa watershed in Bolivia, South America, to estimate stakeholder willingness to pay (WTP) for a proposed upper watershed restoration program. Mean monthly household WTP to improve drinking water was $1.95 (65% of current charges), while mean annual WTP among farmer‐irrigators to improve irrigation water was $17 per hectare (34% of current costs). Aggregated to the entire population of households and farmer‐irrigators total WTP is $77,400 per year, which is 77% of the minimum cost to implement a watershed restoration program.     

成渝地区大气污染生命统计价值评价研究——基于单边界二分式的条件价值法

大气污染生命统计价值是进行大气污染造成的人体健康损失核算和大气污染防治政策成效评估的关键指标。本文运用条件价值方法的单边界二分式函数模型,对成渝地区降低大气污染健康风险的平均支付意愿和生命统计价值进行了计算。主要结论如下:①成渝地区大气污染的平均支付意愿是1974.2元,生命统计价值为394.8万元。其中,四川部分地区和重庆地区的生命统计价值分别为402万元和392.8万元。②性别、家庭年收入和自我认知的身体健康状况等指标对平均支付意愿影响较大。③在生命价值评估方法中,国内普遍使用人力资本法,而国外主要使用条件价值法。条件价值法计算的生命统计价值高于人力资本法计算的结果,但与发达国家相比,我国成渝地区的生命统计价值相对较低。     

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.