Spatial heterogeneity of ecosystem services: a distance decay approach to quantify willingness to pay for improvements in Heihe River Basin ecosystems.

Abstract

The growing appreciation of distance decay as an important parameter necessary for estimating willingness to pay (WTP) is hugely recognized in the literature. In this paper, we estimated the extent to which distance decay and individual's socioeconomic characteristics influence the WTP for restoration of environmental quality attributes in the Heihe River Basin. A choice experiment technique was used to evaluate the household's WTP for the improvements in local environmental attributes. The results of mixed logit model significant impact of distance on the individual's WTP for the improvements in environmental attributes. Findings of the study revealed that people living within 25 km from the river are willing to pay more for an increase in the river water quality level, a reduction in sandstorm days, and an increase in the area of the east Juyan Lake than the people living within the range of 50 km and much more compared to 50 km away from the river. Based on the socioeconomic characteristics, it is concluded that the level of education, age, household's annual income, and household size have a significant effect on the WTP. Results of the implicit prices for each attribute showed the preferences of the inhabitants for every attribute, where the highest WTP in pooled data was recorded for river water quality level (i.e., RMB 124.81/year) and the lowest for leisure and entertainment (i.e., RMB 0.40/year). The highest WTP for water quality suggests that water quality level was the most favored attribute compared to others, subject to the given conditions of water quality and the river basin.