Estimating the non-market value of island biodiversity in China: Controlling for warm glow bias in contingent valuation method

Abstract

Island ecosystems have always played a leading role in conservation biology globally. However, the rich biodiversity of islands is seriously threatened by human activities. Quantifying island biodiversity in economic terms is important since it allows the benefits associated with island biodiversity to be directly compared with the economic value of alternative resource use options, which is essential in the formulation of effective policies for island biodiversity conservation. The main objective of this paper is to assess the economic value of island biodiversity on Pingtan Island, China. The contingent valuation method (CVM) was used to obtain a public willingness to pay (WTP) estimate for a policy to protect island biodiversity. To obtain a more reliable WTP estimation result, a grouped data model was used to test and correct for warm glow bias. The results demonstrate that more than half of the positive bidders are individuals who could be considered to exhibit warm glow behavior and that the warm glow effect will result in an overestimation of WTP. After endogenizing the warm glow effect, the estimated total value of marine biodiversity on Pingtan Island is 73.72 million Chinese yuan (CNY) per year. The results could provide a data basis for cost-benefit analysis, ecological restoration and other environmental management schemes related to island biodiversity.