Assessing willingness to accept compensation for polluted farmlands: a contingent valuation method case study in northwest China

Abstract

It is difficult to assess the value of environmental damage, such as that related to polluted farmlands, because of no markets exist that are relevant to such valuation. This paper applies the contingent valuation method to measure the compensation value considered acceptable to those working and living on polluted farmlands. Baiyin and Jinchang Cities in northwest China are chosen for a case study based on 382 completed questionnaires. It is shown that a willingness to accept (WTA) measure is necessary for damage assessment and is reasonable when those negatively affected by pollution of farmlands also hold relevant property rights. The study applied two methods (the Tobit model and the Logit model) to estimate the MWTA compensation value. Based on our findings, Logit model could be more effective in detecting and correcting respondent bias. The Logit model indicates that the set of explanatory variables considered influences respondents’ WTA decisions which is positively related to farmland size and family size, and is also affected by income and education levels.