Valuation of ecosystem services using choice experiment with preference heterogeneity: A benefit transfer analysis across inland river basin

Abstract

River ecosystem services offer a variety of benefits to the inhabitants of inland areas. For the valuation of environmental goods and services in the context of attaining a better environmental status across Heihe River basin (HRB), Northwest of China by 2020, a survey was conducted employing choice experiment approach across the entire river basin. The selected ecological attributes were defined in combination with ecological improvements in the three sub-basins namely upper, middle and lower sub-basins. For estimating spatial preference heterogeneity, the benefits for the inhabitants were estimated by conditional logit and mixed logit models. Results indicated that the willingness to pay (WTP) estimates for river water quality, farmland irrigation, sandstorm days, lake area, biodiversity, landscape and leisure & entertainment were significantly different across sub-basins. The WTP for water quality in upper basin was RMB 126.6 per year, while in middle and lower sub-basin was RMB 97.1 and 66.4 per year respectively. The estimates of mixed logit model indicated the reduced transfer errors with the insertion of taste heterogeneity. However, transferring benefits from middle sub-basin to upper sub-basin the estimated transfer errors were 27.3%, from lower to middle the transfer errors were 23.4% and from upper to lower the transfer errors were 14.1%. Our obtained results recommend the transferability of non-market benefits among sub-basins.