Economic Valuation of the Aquatic Biodiversity Conservation in South Korea: Correcting for the Endogeneity Bias in Contingent Valuation

Ik-Chang Choi,Trung Nguyen,Hyun Kim,Hio-Jung Shin,John Tenhunen

doi:10.3390/su9060930

Abstract

In this study, we use the Contingent Valuation (CV) method to estimate households’ willingness to pay (WTP) for the aquatic ecosystem health (biodiversity) improvement. This paper extends CV studies by dealing with the endogenous effect of a proxy variable, namely the subjective experience of negative environmental quality changes. The results show that the correction for the endogeneity bias facilitates the efficiency of parameter estimation in the empirical model. The mean WTP per household accounts for around 46.8% (KRW 79.6) of the current water use charge (KRW 170 per cubic meter). The total benefit from conserving the biodiversity is around KRW 198.62 billion. We found several factors that affect households’ WTP for fish biodiversity conservation, suggesting the importance of these factors in the formulation of water policies associated with aquatic biodiversity. In addition, the inefficient water management costs should be redistributed to other projects or new programs such as for the fish biodiversity conservation.

Highlights

Fish is at the very top of the aquatic ecosystem food chain and is widely used as a water quality indicator organism [1,2]
We examine and correct the endogeneity bias of a proxy variable underlying unobservable characteristics based on the subjective experience of negative environmental quality changes caused by the turbid water
The proportion of fish species living in category A of the basin such as Rhynchocyprisoxycephalus, Rhynchocypriskumgangensis, and Brachymystaxlenok had been sharply reduced from 22.2% in 2008 to 12.5% in 2011 [10]

Summary

Introduction

Fish is at the very top of the aquatic ecosystem food chain and is widely used as a water quality indicator organism [1,2]. Rich fish diversity contributes to the provision of social-economic services, and to the maintenance of the ecological balance of natural resources [3]. The restoration of fish habitats and the increases in populations of endangered fish can, contribute to an improved provision of various ecosystem services [4,5]. Decreases in fish biodiversity may have an adverse impact on the value of cultural services of aquatic ecosystems such as recreation, ecotourism, and education. Once the cultural value is distorted it can never be replaced [6]. Fish biodiversity conservation confers wider environmental benefits and protects aquatic biodiversity for future generations [7]

Objectives

Methods

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Discussion

Conclusion