Abstract
This study is an application of CVM to a specific area in Brazil, the Corumbatai river basin, in the state of Sao Paulo, aiming to estimate the value attached by affected people to a hypothetical riparian forest restoration project. The method used was the double bounded dichotomous choice under a logit model. Data were obtained by street-intercept interviews with a net sample of 930 individuals, 20 years or older, living in seven municipalities (cities and respective rural areas) that contain the basin. Protest bid responses were not excluded in a first approximation, resulting in a R$ 2.06 mean willingness to pay (WTP) for the riparian forest restoration, equivalent to approximately R$ 274,000 per month (R$ 1.00 equivalent to US$ 0.52 at the survey period) when accounting for about 133,000 residences in the area. It was observed an expressive number of "no-no" responses from people ascribing the problem to government and farmers and suspecting on misuse of funds by the official agencies involved.
Highlights
The main environmental services supplied by riparian natural vegetation is a well studied matter
Cost-benefit analysis of preservation and increase in the area covered by riparian forests, under the neoclassical theory, face a strong limitation: environmental services are usually non-market goods, with no indicator of their values represented by market prices
Hanemann’s model (1984; 1989) on utility differences was used as the basis to estimate the willingness to pay (WTP) for riparian forest restoration in the studied area
Summary
The main environmental services supplied by riparian natural vegetation is a well studied matter. Randall & Stoll (1980) built a model that predicts welfare changes due to a variation in the quantity supplied of a good, not necessarily with changes in income and prices The application of their conclusion to public goods, depends upon a crucial assumption: the existence of a demand function for these goods so that it is possible to estimate the individual WTP to consume a certain amount of it. If the service is a non-market good and if it has no associated market goods and the objective is to estimate the total value, including use and non-use values, the only method largely accepted is the Contingent Valuation Method (CVM) In this case, if the project focus on individual’s response to an increase in the supply service, WTP, rather than WTA, seems to be the appropriate measure to be used
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