Estimated Mean Willingness To Pay Research Articles

Exploring visitors' willingness to pay to generate revenues for managing the National Elephant Conservation Center in Malaysia

Financial sustainability of protected areas is one of the main challenges of management. Financial self-sufficiency is an important element in improving conservation effort in these areas. This study seeks to review best practices in recreational fee systems in different countries and to find a relevant entry fee for a wildlife sanctuary in Malaysia. The revenue of the National Elephant Conservation Center (NECC) in Kuala Gandah, Malaysia, comes from several sources, including the national government, but all these budgetary sources are strained by tighter public budgets and greater demands. The present study investigates the introduction of visitor entrance fees to supplement an otherwise inadequate budget for supporting the operational costs of the sanctuary. Factor analysis and a double-bounded contingent valuation method were combined to estimate tourists' willingness to pay (WTP) the proposed entrance fee. Factor analysis showed that respondents' motivation to support the NECC with user fees is conditioned by their direct experiences with elephants, their satisfaction with NECC's educational programs and services, and other experiences it gives to users. The WTP model considered respondents' four motivation factors with their sociodemographic characteristics. Since NECC visitors arrive from both within and outside the country, this study suggests to center managers a two-tier fee structure (residents vs. nonresidents of Malaysia), based upon mean WTP estimates. This study further suggests that revenue from such an entrance fee for NECC could support the Center's management and development costs.

Valuing access to protected areas in Nepal: The case of Chitwan National Park

This paper investigates the international and domestic visitors' willingness to pay (WTP) an entry fee at Chitwan National Park (CNP) in Nepal, the factors affecting their WTP, and the trade-offs among entry fees, visitation demand and park revenue. Based on the contingent valuation surveys of 222 non-South Asian, 48 South Asian, and 40 domestic visitors, the logit regression results suggest that the visitors have a substantially higher WTP than the current entry fees. Depending on visitor categories, the estimated mean WTP per visitor per day was at least 2.5 times higher than the existing entry fee. The WTP is positively affected by the visitor's CNP experience. The current fees capture only about 21% of consumer surplus derived from CNP access. Doubling the current entry fees would modestly decrease the number of CNP visitors (<19%) but substantially increase the park revenue (>61%).

Contingent valuation and choice experiment of citizens’ willingness to pay for forest conservation in southern Finland

Environmental quality has a direct effect on citizens’ welfare. To quantify this effect, the four articles of this thesis analyse Finnish citizens’ willingness to pay (WTP) for increased forest conservation using the contingent valuation (CV) and choice experiment (CE) methods. These methods are based on neo-classical welfare economics augmented with the choice process framework originating from psychology and behavioural economics. Using the CV method, we analyse how WTP is affected by respondents’ uncertainty, by the share of nonrespondents and by the considerably high share of “yes” responses at the highest proposed costs to households. The CE data are used to study the effects of different conservation programme characteristics on WTP. The results show that Finnish citizens support increased forest conservation. The median WTP in the contingent valuation was 72 EUR, i.e. 50% of respondents supported increased conservation if the costs per household did not exceed 72 EUR. The mean WTP estimates were sensitive to modelling assumptions and assumptions concerning the nonrespondent preferences. This emphasises the need for careful sensitivity analyses when results are used for welfare measurement and policy planning. Respondents’ choices in the valuation questions were affected by the household costs of conservation and other socioeconomic characteristics. The results suggest that the choices in valuation tasks are affected by economic and psychological factors. The study gives important insights into the choice behaviour and lower and upper bound estimates of WTP. These estimates are somewhat lower than those in comparable earlier Finnish studies. In CV, respondents seemed insensitive to programme size while the extent of the proposed project had a significant effect on the choices in CE.

Ekonomické hodnocení hluku ze silniční dopravy: studie podmíněného hodnocení

Our study investigates the benefits that the Czech inhabitants could gain from the reduction of road traffic noise. We applied contingent valuation study in order to estimate willingness-to-pay (WTP) for the reduction of traffic noise by 10 dB (from 70 dB up 60 dB). Using data from 2010 Czech representative survey (n=2,104), we estimated mean WTP by nonparametric method which was based on the Kaplan-Meier estimate. Further, we explained the variability of WTP using Double-Hurdle model. In the first step, the Probit model explained the choice of individuals that are willing to participate on the program decreasing the road noise. In the second step, the log-normal regression model explained the variability of WTP on the socio-economic characteristics of individuals and characteristics of noise in the area where people live.

Temporal stability of preferences and willingness to pay for natural areas in choice experiments: A test–retest

The main objective of this paper is to test the temporal stability of stated preferences and willingness to pay (WTP) values from a Choice Experiment (CE) in a test–retest. The same group of participants was asked the same choice tasks in an internet-based CE, conducted twice with a time interval of one year without interviewer interference. We examine choice consistency at individual choice task level and transferability of the underlying indirect utility function and associated WTP values. The results show that choices are consistent in 57 percent of the choice occasions. Comparison of the choice models over time shows that the estimated preference and scale parameters are significantly different, suggesting that choice behaviour changed between the two surveys. Differences between marginal WTP estimates for individual choice attributes are statistically significant only at the 10 percent level. However, we show that this can result in significantly different WTP values for policy scenarios. The instability of estimated mean WTP values for different policy scenarios asks for caution when including WTP values in cost-benefit analysis.

Willingness to pay to avoid health risks from road-traffic-related air pollution and noise across five countries

We conducted a multi-country study to estimate the perceived economic values of traffic-related air pollution and noise health risks within the framework of a large European project. We used contingent valuation as a method to assess the willingness-to-pay (WTP) for both types of pollutants simultaneously. We asked respondents how much they would be willing to pay annually to avoid certain health risks from specific pollutants. Three sets of vignettes with different levels of information were provided prior to the WTP questions. These vignettes described qualitative general health risks, a quantitative single health risk related to a pollutant, and a quantitative scenario of combined health risks related to a pollutant. The mean WTP estimates to avoid road-traffic air pollution effects for the three vignettes were: €130 per person per year (pp/y) for general health risks, €80pp/y for a half year shorter in life expectancy, and €330pp/y to a 50% decrease in road-traffic air pollution. Their medians were €40pp/y, €10pp/y and €50pp/y, respectively. The mean WTP estimates to avoid road-traffic noise effects for the three vignettes were: €90pp/y for general health risks, €100pp/y for a 13% increase in severe annoyance, and €320pp/y for a combined-risk scenario related to an increase of a noise level from 50dB to 65dB. Their medians were €20pp/y, €20pp/y and €50pp/y, respectively. Risk perceptions and attitudes as well as environmental and pollutant concerns significantly affected WTP estimates. The observed differences in crude WTP estimates between countries changed considerably when perception-related variables were included in the WTP regression models. For this reason, great care should be taken when performing benefit transfer from studies in one country to another.

Quantifying Preferences for the Natural World Using Monetary and Nonmonetary Assessments of Value

Given that funds for biodiversity conservation are limited, there is a need to understand people’s preferences for its different components. To date, such preferences have largely been measured in monetary terms. However, how people value biodiversity may differ from economic theory, and there is little consensus over whether monetary metrics are always appropriate or the degree to which other methods offer alternative and complementary perspectives on value. We used a choice experiment to compare monetary amounts recreational visitors to urban green spaces were willing to pay for biodiversity enhancement (increases in species richness for birds, plants, and aquatic macroinvertebrates) with self-reported psychological gains in well-being derived from visiting the same sites. Willingness-to-pay (WTP) estimates were significant and positive, and respondents reported high gains in well-being across 3 axes derived from environmental psychology theories (reflection, attachment, continuity with past). The 2 metrics were broadly congruent. Participants with above-median self-reported well-being scores were willing to pay significantly higher amounts for enhancing species richness than those with below-median scores, regardless of taxon. The socio-economic and demographic background of participants played little role in determining either their well-being or the probability of choosing a paying option within the choice experiment. Site-level environmental characteristics were only somewhat related to WTP, but showed strong associations with self-reported well-being. Both approaches are likely to reflect a combination of the environmental properties of a site and unobserved individual preference heterogeneity for the natural world. Our results suggest that either metric will deliver mutually consistent results in an assessment of environmental preferences, although which approach is preferable depends on why one wishes to measure values for the natural world.

Measuring the Willingness to Pay for Tap Water Quality Improvements: Results of a Contingent Valuation Survey in Pusan

With increasing concern regarding health, people have developed an interest in the safety of drinking water. In this study, we attempt to measure the economic benefits of tap water quality improvement through a case study on Pusan, the second largest city in Korea. To this end, we use a scenario that the government plans to implement a new project of improving water quality and apply the contingent valuation (CV) method. A one-and-one-half bounded dichotomous choice question (OOHBDC) format is employed to reduce the potential for response bias in multiple-bound formats such as the double-bound model, while maintaining much of the efficiency. Moreover, we employ the spike model to deal with zero willingness to pay (WTP) responses from the OOHBDC CV survey. The CV survey of 400 randomly selected households was rigorously designed to comply with the guidelines for best-practice CV studies using person-to-person interviews. From the spike OOHBDC CV model, the mean WTP for the improvement was estimated to be KRW 2,124 (USD 2.2), on average, per household, per month. The value amounts to 36.6% of monthly water bill and 20.2% of production costs of water. The conventional OOHBDC model produces statistically insignificant mean WTP estimate and even negative value, but the OOHBDC spike model gives us statistically significant mean WTP estimate and fitted our data well. The WTP value to Pusan residents can be computed to be KRW 31.2 billion (USD 32.1 million) per year.

The public's value of hydrogen fuel cell buses: A contingent valuation study

With the increasing interest in global warming, there has been intense international competition with regard to the introduction of the hydrogen (H2) fuel cell (FC) bus, which represents a promising solution for the low-carbon age. With respect to the investment in H2-based technology development and the expansion of H2 FC vehicles, the consumer attitude is a crucial factor because the Korean government will consider it one of the most important factors in its decision to approve a large-scale introduction of H2 FC buses. In this regard, this study measures the public's willingness to pay (WTP) for a large-scale introduction of H2 FC buses in Korea by employing a survey approach termed the contingent valuation. Furthermore, to enhance statistical efficiency, this study employs the one-and-one-half-bound dichotomous choice method. The annual mean WTP estimate was KRW 4230 (USD 4.55) per household as of 2007. The estimate of the annual benefits to the affected residents was KRW 32.3 billion (USD 34.7 million). The results of this study are expected to be helpful in policy decisions related to the introduction of H2 FC buses and investment in H2 technology development.

The effects of extrinsic incentives on respondent behaviour in contingent valuation studies

In contingent valuation studies to assess the economic value of environmental goods, respondents are often given small presents or money amounts at the beginning of the interview to compensate them for their time spent on the survey and to encourage them to be conscientious when answering the questions. Yet, it is still an open question whether this practice biases contingent valuation survey responses, especially stated willingness to pay (WTP) for the respective environmental good. This study employs a set of field experiments to investigate the effect of respondent incentives in the form of monetary and in-kind gifts on responses in a contingent valuation survey. It is analysed how these different kinds of incentives affect (1) respondents’ diligence when answering contingent valuation method questions, (2) the likelihood of a respondent to state a positive WTP and (3) the amount of stated WTP. Results show that with respect to raising respondents' diligence in the survey interview, a moderate monetary incentive is most effective. The results regarding the effect on WTP statements are less clear. While the likelihood to state a positive WTP is increased by most incentives, mean WTP estimates are virtually unaffected.

On the value of drovers’ routes as environmental assets: A contingent valuation approach

The aim of this study was to evaluate the non-market benefits resulting from the restoration of an old drovers’ route for recreation uses in Valencia (Spain). The valuation was carried out using the Contingent Valuation Method (CVM) through the elicitation of individuals’ willingness to pay (WTP). Since 52% of the respondents stated a zero WTP response, in order to inform decision-making processes more accurately, special attention was paid to the problem of zero and protest responses, and also to the possible presence of self-selection by those that protested. For the different specifications considered, results suggest that mean WTP estimates are higher for “rural areas” than for “the Valencia area”.

Measuring the Economic Benefits of the Tap Water Supply Service in Urban Areas: The Case of Korea

This paper attempts to measure the economic benefits of tap water supply services in some urban areas of Korea. According to micro-economic theory, the economic benefit of water consumed is the sum of the actual water price and the additional willingness to pay (WTP) for the consumption. We apply the dichotomous choice contingent valuation method to assess the additional WTP using specific cases of four cities located in the metropolitan area of Korea. Both parametric and non-parametric approaches to obtaining the mean WTP estimates are used. The results show that the mean additional WTP for the tap water supply service is estimated to be KRW 163.38 (USD 0.13) and KRW 223.89 (USD 0.18) per m3 using parametric and non-parametric approaches, respectively. Given that the price of tap water is 641.66 per m3, the residents’ economic benefits that ensue from the tap water supply service are computed as KRW 805.04 (USD 0.63) and KRW 865.55 (USD 0.68) per m3, respectively. This information can be beneficially utilized in conducting an economic feasibility study for a new project related to tap water supply service.

Willingness to Pay for Prostate Cancer Treatment among Patients and Their Family Members at 1 Year After Diagnosis

ObjectivesTo explore an alternative approach to quantifying the burden of side effects at 1 year after treatment for prostate cancer among both patients and their partners. MethodsWe analyzed data from 75 couples in the Family and Cancer Therapy Selection study. Paired patients and family members were independently asked about their willingness to pay (WTP) for a hypothetical new treatment that cures prostate cancer without side effects if they could reconsider their treatment decision by indicating the maximum amount they would be willing to pay given 11 separate “bids” ranging from $0 to $1500 per month. Descriptive and regression analyses were conducted for patients and family members controlling for sociodemographic characteristics and health status; Spearman correlations were also examined. ResultsAmong 75 couples analyzed, the income-adjusted mean WTP estimates per month were $400.8 (standard error [SE] $54.3) for patients and $650.2 (SE 72.2) for family members. The WTP between patients and family members was correlated (Pearson ρ 0.30; P = 0.01). After adjusting for covariates, the adjusted mean WTP per month was $588.1 (SE 65.77) for patients and $819.4 (SE 74.33) for family members. Wanting to avoid side effects at baseline predicted higher WTP for patients (P = 0.010). Experiencing sexual side effects was predictive of higher WTP for family members (P = 0.047). ConclusionsFairly high WTP amounts for a hypothetical treatment without side effects suggests that patients and their partners are experiencing important burdens 1 year after treatment. The higher amounts partners are willing to pay and the correlation with sexual side effects suggest that they are perceptive of significant treatment burdens.

Estimating Ecological Value of Small Hydropower Using Contingent Valuation Method: An Application to Tongjiqiao Reservoir in Zhejiang Province, China

Abstract The small hydropower (SHP) will be less competitive in the absence of environmental value. The lack of information has become an important obstacle challenging decision-makers in resource-use choices. This paper is an application of contingent valuation method (CVM) in rural China to estimate the willingness- to-pay (WTP) for environmental services provided by exiting hydropower station. Using the single-bounded and dichotomouschoice CVM, the ecological value of Tongjiqiao Reservoir (TJQR) is estimated, and the annual mean WTPs of single-bounded and double-bounded CVM estimation are 141.05 and 219.52 Yuan (RMB)/a, respectively. The 95% confidence interval of annual WTP on an average is 118.47, 166.79 Yuan (RMB)/a and 204.41, 236.22 (Yuan RMB)/a, respectively. In contrast, double-bounded model could obtain much more information of WTP of the investigated, thus reducing the confidence interval of estimation, and enhancing the estimation accuracy of the WTP. According to the estimated mean WTP of the double-bounded CVM, the total ecosystem service value of the TJQR is 15.54 million Yuan (RMB). Compared with the conventional electricity of fossil power and large hydropower, the SHP will be less competitive in the absence of non-market value, ignoring that the environmental impacts of existing SHP will undermine the healthy development of clean energy sector.

Understanding the Determinants of Consumers’ Willingness to Pay for Eco-Labeled Products: An Empirical Analysis of the China Environmental Label

This study applies data from a web-based survey conducted in mainland China to examine the determinants of consumers’ willingness to pay (WTP) for seven different product categories awarded with China Environmental Label and com- pare the mean WTP estimates among these categories. The Interval Regression method is used for estimation. The results indicate that Chinese consumers who regard environmental conservation as being more important than life convenience, who believe purchasing the eco-labeled products is good for the environment, and who have the experience in purchasing eco-labeled products are willing to pay more for those products with environmental label or eco-label. In addition, socio-demographic characteristics such as gender, age, education and household income are found to be important factors to affect Chinese consumers’ WTP amounts. Finally, the results of pair-wise comparison among the mean WTP estimates of various eco-labeled products indicate that most of them are different, which implies that the degrees of Chinese consumers’ willingness to pay extra money for China Environmental Label are different based on the types of products.

Morbidity costs associated with ambient air pollution exposure in Sao Paulo, Brazil

In 2007 we conducted a contingent valuation survey in Sao Paulo, Brazil, to estimate the population's willingness–to–pay (WTP) to avoid one hospital admission (HA) and one emergency–room visit (ER) due to respiratory diseases in adults and children younger than 5 years old; and cardiovascular diseases in adults only; both associated with atmospheric air pollution. Our annual mean WTP estimates are €81.82 (adult) and €137.92 (child) for HA; €48.40 (adult) and €90.66 (child) for ER due to respiratory diseases; €53.57 (ER) and €90.08 (HA) for cardiovascular diseases. Our results suggest altruism towards children, and a strong income effect on WTP. Results will help analysts evaluating the health benefits of specific policies with potential air pollution impacts in Sao Paulo, Brazil.

Island Villagers’ Willingness to Work or Pay for Sustainability of a Marine Fishery Reserve: Case of San Miguel Island, Philippines

Establishment of marine reserves or marine protected areas (MPAs) has emerged as a major coastal resource management tool in the Philippines. A major sustainability constraint is the enforcement of MPA and fisheries regulations. We contribute to the literature of using stated preference methods to investigate the local residents’ willingness to work (WTW) and willingness to pay (WTP) for the continued existence of the San Miguel Island (SMI) fishery reserve in Bicol Region, Philippines. We surveyed 435 respondents in three villages. The lower-bound mean WTW is 3.5 days/mo for residents in the “owner” village and 1.9 days/mo for residents in adjacent villages. Using a fraction of mean daily income to impute the monetary equivalent of WTW, the result is more than 3 times higher than the Php16 to 25/mo (US$0.34 to 0.75/mo) estimated mean WTP. We hypothesize that labor market in this rural village is incomplete so residents have stronger preference for money than for time. However, further investigation on the opportunity cost of time and understanding the labor market is warranted when using WTW in a valuation framework. Some policy implications are: (1) considering use of voluntary labor as management option for MPAs and (2) establishing “own village” MPAs may increase residents’ conservation value.

Framing the benefits of cancer treatment: How survival is described influences preferences for care.

6099 Background: To examine how the framing of survival benefit affects individuals’ preferences for cancer therapies. Methods: Through an internet-based survey of 2,050 U.S. adults (50% with a prior episode of cancer), respondents were randomized to one of two sets of scenarios, each of which described survival benefit of a new treatment as either increased median survival time (median survival), or increased probability of survival for a given length of time (landmark survival). Each respondent answered questions about their inclination for new treatment and their willingness to pay (WTP) out-of pocket in hypothetical scenarios. In this study, WTP was used as a methodological approach for determining patient preferences for framing of clinical benefits. Each respondent was presented with two randomly selected scenarios with different baseline and improvement in survival. We used a double-bounded, dichotomous-choice bidding game to elicit their preferences for care. We estimated mean WTP values across scenarios and assessed whether message framing predicted WTP, adjusting for respondent characteristics. Results: Most respondents (65%-91%, depending on the scenario) preferred (as determined by WTP) treatments that conferred additional survival benefit. The predicted probability of willing to pay some amount was 5% to 13% higher, and the predicted mean WTP values were 34% to 45% higher when treatment benefit was framed as improvements in landmark survival probability as opposed to median survival time. Conclusions: How survival benefits are described may strongly influence the perception of value of cancer treatment options. Our approach using WTP suggest that people may be more inclined to prefer therapy when the expected benefit is described as an increase in landmark survival probability, compared to an increase in median survival time. Further research is needed to better understand framing effects and to develop decision tools that help patients evaluate the risks and benefits of different treatment options and clarify their preferences for care.

Economic valuation of Shadegan International Wetland, Iran: notes for conservation

Wetlands are among the most productive ecosystems on the earth. They produce various market and non-market goods and services, which have a significant role in human welfare. Despite the great opportunities from sustainable development, wetlands all over the world are under serious threat from a diverse range of non-sustainable activities. One of the major reasons for excessive depletion and the conversion of wetland resources is due to underestimating the non-market values of wetlands during development decisions. Shadegan International Wetland (SIW) in southern Iran is one of these wetland areas that is threatened by undervaluation and overexploitation from commercial activities. This study utilizes the contingent valuation method to estimate the economic benefits of SIW from the view point of peoples’ willingness to pay (WTP). The logit model was defined based on dichotomous choice to measure individuals’ WTP. The estimated mean WTP was US$ 1.74 per household as a onetime donation. This study concludes that the benefits of SIW to society could encourage managers to set priorities to ensure that the health of the ecosystem, its integrity, and its uniqueness would be conserved in a proper manner.

Using contingent valuation to estimate the willingness of tourists to pay for urban forests: A study in Savannah, Georgia

This study estimated the monetary value of urban forests’ non-priced benefits to tourists. Data collected by a face-to-face self-administered survey of urban tourists in Savannah, Georgia, USA were used to estimate tourists’ willingness to pay (WTP) for urban forests by the contingent valuation method. Individual WTP was found higher among tourists with graduate school education. Results suggested that WTP for urban forests also increased significantly with income and destination loyalty of the tourists. Estimated mean and median WTP values were $11.25 (95% confidence interval: $7.34, $15.16) and $2.10 (95% confidence interval: $1.38, $2.82), respectively. Based on the estimated mean WTP, annual value of urban forests to tourists in Savanna in 2009 ranged from a minimum of $81 million to a maximum of $167 million with a 95% confidence interval. The annual value was $11.55 million (95% confidence interval: $7.59 million, $15.51 million) based on the estimated median WTP and assuming at least 50% of the tourists in Savannah would pay the median amount. As the mean was greatly influenced by extreme WTP values in the data, the annual value based on the median value was a more conservative estimate.