Payment Vehicle Research Articles

Willingness to Pay for Nature Protection: Crowdfunding as a Payment Mechanism

AbstractIn this study, we use a discrete choice experiment to elicit the willingness-to-pay (WTP) for preventing and mitigating the effects of oil spills on marine and coastal ecosystem services, along a particularly vulnerable coastal region of mainland Portugal. We used a split-sample design to analyze the differences between two payment vehicles (PV): a mandatory extra income tax and a voluntary contribution collected by a crowdfunding campaign with a provision point mechanism and a money-back guarantee. The difference between the two PVs is examined in a setting where the local population has a negative perception of the quality of institutions. We find that respondents are more willing to contribute when presented with the crowdfunding version. Also, regardless of the payment vehicle, respondents who express a mistrust in institutions are more likely to choose the status quo. These results suggest the potential of using crowdfunding to support ecosystem services’ conservation initiatives.

Does Perceived Nuisance Abundance of Water Plants Match with Willingness-to-Pay for Removal? Contrasts Among Different User Categories.

Dense beds of water plants can be perceived as nuisance, but this perception, however, may not be similar for different user categories, and this may affect their willingness-to-pay (WTP) for plant removal. A questionnaire survey was used to test this for residents and visitors and find underlying socio-cultural or economic drivers. We studied five cases where nuisance water plant growth is managed: the rivers Otra (Norway) and Spree (Germany), and the lakes Kemnade (Germany), Grand-Lieu (France), and Hartbeespoort Dam (South Africa). We used a different payment vehicle for residents (annual household tax) and visitors (tourist tax). The survey included questions on days spent on specific types of activity per year, the importance attached to different functions and activities, overall environmental attitude, perception of the plants, socio-demographic respondent characteristics and WTP for increased plant removal. We observed no increase in WTP for increased removal in most sites. The two most important drivers of variation in current WTP were income, and whether respondents were engaged in boating and angling and thus perceived the plants negatively. Variation in WTP among sites was considerable, and mainly related to the mixture of activities among respondents. Differences between residents and visitors were less important than those among sites. Our observations bear importance for water management: information on differences in experienced nuisance among user categories and the frequency of use by these categories is useful as guidance for the design and implementation of any plant removal plan.

A Contingent Valuation Study for Use in Valuing Public Goods with Health Externalities: The Case of Street Pianos.

Clinical healthcare is not the only way to improve an individual's health. Community-based interventions can have health and wellbeing impacts as well; however, the nature of these interventions, which have public good characteristics, poses challenges for the typical ways in which we value outcomes for use in (health) economic evaluations. The approaches to valuation of these type of interventions should allow for the incorporation of all types of values including option value, externalities and individual use-value. This is a feasibility study with the objective to re-consider the importance of health externalities when valuing public health interventions that are treated as public goods from an economic perspective. A contingent valuation (CV) survey was designed to elicit individual willingness to pay (WTP) for the public piano programme (PPP). Five different scenarios were designed; three scenarios focussed on individual use-value, while the other two (scenarios 4 and 5) covered option values and externalities. An online survey was conducted with a sample of 105 people. Preferences differed across the different scenarios. The mean WTP for scenario 1 was £0.81, for scenario 2 £3.65, for scenario 3 £3.07, for scenario 4 £7.26 and for scenario 5 £6.02. The WTP results for each scenario are presented and discussed regarding the nature of the good, user and non-user perspectives, payment vehicles and individual characteristics. This study provides evidence that all types of use are necessary for inclusion in an economic evaluation, especially when the good in question is a public good where its benefits can be obtained from all community members.

Public preferences and willingness to pay for a net zero NHS: a protocol for a discrete choice experiment in England and Scotland

IntroductionClimate change poses a major threat to our health, livelihoods and the planet. In 2020, the UK National Health Service (NHS) committed to reducing its Scope 1, 2 and 3...

Monetary value of health-a practical decision-making framework combining equity considerations and WTP.

We estimate the first monetary value of a health gain in Croatia to inform the debate about the appropriate "demand-side" cost-effectiveness thresholds in Croatia but also Central and Eastern Europe, where such debates are still uncommon. We test the empirical support for two equity considerations: age and severity operationalized as proportional shortfall (PS), and propose a pragmatic framework for combining equity considerations with the monetary value of health into a single threshold. We used the contingent valuation method to elicit the willingness to pay per Quality-Adjusted Life Year (QALY) in Croatia, using a representative sample of the population (N = 1,500, online survey). 29 EQ-5D health states were valued using payment scales and open-ended question as payment vehicles. To test the hypotheses, we used both parametric tests and non-parametric tests. Multilinear regression was employed to test the theoretical validity of the results. The monetary value of a health gain in Croatia is equivalent to 1.15 of GDP per capita (equaling €17,000). Age of patients seems to be an important equity-related characteristic. The WTP per QALY in the age-neutral risk group (€11,900) was nearly equivalent to the WTP per QALY in the adult (neutral) risk group (€11,700) but lower by 16% compared to the WTP per QALY estimated in children (€14,200; p = 0.00). WTP estimates are theoretically valid and to, a small degree, scale sensitive. There is a positive association between the level of proportional shortfall and willingness to pay. To increase the usefulness of our results for the policy-makers, we combine the elicited preferences into a single decision-making framework and construct several cost-effectiveness thresholds based on willingness to pay and equity-related preferences. Based on empirical results, cost-effectiveness thresholds could range up to €20,308 for the most severe health conditions in children or could be lowered to €16,777 for less severe health conditions. In Central and Eastern Europe, in spite of a growing understanding of the importance of further developing value-based assessment frameworks there has been very little empirical research to guide, inform and promote this development. Countries in this region use mainly GDP-based thresholds without empirical evidence to support such important decisions. This may lead to thresholds that are too high, with detrimental consequence for the pricing and reimbursement systems.

Public Willingness to Pay for Interstate Cooperation to Preserve the Ecological Integrity of the Han River Estuary in Korea

The Han River Estuary (HRE), Yellow Sea, forms part of the border between South Korea and North Korea, and these two countries are militarily hostile. Since the HRE has quite excellent ecological integrity, the task of preserving it well is emerging as important. Thus, the South Korean Government is attempting to preserve the ecological integrity of the HRE through interstate cooperation. By employing contingent valuation, this study delves into South Korean households’ willingness to pay (WTP) for this preservation. One thousand households nationwide were sampled and surveyed through face-to-face individual interviews. Annual household income tax was selected as the payment vehicle. Dichotomous choice questioning was chosen as the WTP induction method. A spike model was selected as a method for modelling a WTP of zero. The main results showed statistical significance. Annual WTP per household and national WTP were obtained as KRW 4487 (USD 3.92) and KRW 125.75 billion (USD 109.83 million), respectively. When a 10-year payment period and a 4.5% discount rate were adopted, the value was KRW 766.14 billion (USD 669.12 million). South Korean households placed considerable value on the preservation of the ecological integrity of the HRE through interstate cooperation.

Willingness to Pay for Environmental Conservation: Subsidy Reduction as a Payment Vehicle

Willingness to Pay for Environmental Conservation: Subsidy Reduction as a Payment Vehicle

Willingness to Pay for Environmental Conservation: Subsidy Reduction as a Payment Vehicle

Willingness to Pay for Environmental Conservation: Subsidy Reduction as a Payment Vehicle

Milder, wilder, drier: Understanding preferences for urban nature-based solutions in China

Nature-based solutions have gained recognition for their potential to address urban environmental challenges, particularly in rapidly urbanising countries such as China. However, financial and spatial constraints hinder their widespread adoption. Here we explore urban residents' preferences for nature-based solutions targeting stormwater management, urban heat island reduction, and biodiversity support through monetary, time, and space contributions. We carried out three choice experiment surveys with 1536 Chinese respondents, employing three payment vehicles: willingness to pay (WTP), willingness to contribute time (WTCT), and a novel metric, willingness to contribute space (WTCS). The WTCS metric assesses individuals' willingness to voluntarily convert sealed surfaces on private land into greenspace. We found strong preferences for temperature and flooding reduction across all payment vehicles, reflecting substantial challenges of urban heat islands and flooding in China. Additionally, we reveal a preference for moderate greenspace management intensity, highlighting the potential for biodiversity benefits through reduced management intensities. The introduction of the WTCS payment vehicle expands the methodological toolkit for choice experiments and offers a novel approach to assess citizen support for nature-based solutions. These findings have practical implications for designing effective nature-based solutions programs to address urban environmental challenges and meet the preferences of urban residents in China and beyond.

VOLY: The Monetary Value of a Life-Year at the End of Patients' Lives.

We explored the monetary value of the end-of-life (EoL) health gains, that is, the value of a life-year (VOLY) gained at the end of a patient's life in Croatia. We tested whether the nature of the illness under valuation (cancer and/or rare disease) is a factor in the valuation of EoL-VOLYs. The aim was for our results to contribute to the health and longevity valuation literature and more particularly to the debate on the appropriate cost-effectiveness threshold for EoL treatments as well as to provide input into the debate on the justifiability of a cancer and/or a rare disease premium when evaluating therapies. A contingent valuation was conducted in an online survey using a representative sample of the Croatian population (n = 1500) to calculate the willingness to pay for gains in the remaining life expectancy at the EoL, from the social-inclusive-individual perspective, using payment scales and an open-ended payment vehicle. Our approach mimics the actual decision-making problem of deciding whether to reimburse therapies targeting EoL conditions such as metastatic cancer whose main purpose is to extend life (and not add quality to life). Average EoL-VOLY across all scenarios was estimated at €67,000 (median €40,000). In scenarios that offered respondents 1 full year of life extension, EoL-VOLY was estimated at €33,000 (median €22,000). Our results show that the type of illness is irrelevant for EoL-VOLY evaluations. The pressure to reimburse expensive therapies targeting EoL conditions will continue to increase. Delivering "value for money" in healthcare, both in countries with relatively higher and lower budget restrictions, requires the valuation of different types of health gains, which should, in turn, affect our ability to evaluate their cost effectiveness.

Do individual PES buyers care about additionality and free-riding? A choice experiment

Based on a survey of the French population, this study investigates consumer preferences for forest ecosystem services (FES) provision towards efficiency and equity in the context of additionality, and differences in willingness to pay (WTP) for FES between a tax-based and a donation-based payments for ecosystem services (PES) scheme. We show that consumers prefer equity to strict additionality adherence, with this preference being significantly stronger among females. However, consumer preferences are heterogeneous, and respondents with a closer connection to forests express the opposite preference. Regarding WTP, we find no systematic difference between the two payment vehicles, though WTP does vary depending on how respondents perceive potential free-riding. When considering that non-contributors also benefit from a particular PES scheme, a small group perceived this as unfair and reacted by reducing their contribution. A second, significantly larger group interpreted this as an opportunity to contribute to the common good and showed a higher WTP, indicating a markedly altruistic attitude towards FES provision in French society. We conclude by discussing the role of altruism in PES, the dilemma posed by the partial economic and legal incompatibilities of additionality and equity, and the environmental impact of environmental credits when credit buyers do not account for additionality.

Public choice for payment vehicles of turtle conservation in Terengganu, Malaysia

Abstract. Kamaludin M, Alipiah RM, Nordin NSN, Afiqah N. 2023. Public choice for payment vehicles of turtle conservation in Terengganu, Malaysia. Biodiversitas 24: 636-644. Sea turtle is known as the iconic natural heritage in Terengganu, Malaysia. Unfortunately, the turtle populations are declining these days due to many threats such as incidental catch, human activities, coastal development, irresponsible tourism, and poaching. Besides, erosion occurs on some beaches, reducing the area available for turtle nesting. This study determines marginal willingness to pay (WTP) for sea turtle conservation programs with two different payment vehicles i.e. tax collection and trust fund in Terengganu, Malaysia. The choice experiment (CE) method was utilized to calculate the marginal WTP of four attributes (population of sea turtles, communities involved, conservation activities and tax/trust fund). The study found that public placed a higher value of the marginal WTP on the ‘conservation activities’ attribute with RM3.32 (tax) and RM110.11 (trust fund), while the public exhibited higher values of WTP on the medium of payment vehicle (trust fund), where the coercive payment was not favorable among them. Therefore, a workable and suitable medium of payment is essential to support the efforts in protecting sea turtles and keeping coral reefs and sea grass beds healthy. After all, more sea turtles will survive and thrive to maintain the fragility of ecosystem's balance in the ocean.

Air Pollution in Urban Africa: Understanding Attitudes and Economic Valuation in the Case of Dakar, Senegal

The degradation of air quality is a real concern in Africa, as pollution levels are consistently above commonly accepted thresholds, and yet, very little is known about individual attitudes and the extent to which improved air quality is valued in the context of rapid urbanization. This research proposes to analyze the willingness to pay for reduced air quality in African urban areas. Using survey data from 427 individuals in Dakar (Senegal) between February and May 2019, a double-bound, dichotomous contingent valuation model is developed. The results first suggest that 70% of individuals are indeed willing to pay an average of CFA Francs 3114.8 (USD 5.6) per month to contribute to air quality improvement, and the corresponding value of a life year gained is estimated at CFA Francs 35,550.2 (USD 80) at least. The results also point to a great deal of heterogeneity in individual valuation schemes, as they vary with the perceptions of life expectancy gains, payment vehicles, and various individual characteristics, and also across months with different levels of temperatures. These findings could constitute important inputs into public strategies aimed at improving air quality in the African context.

Crowdfunding Vs. Taxes: Does the Payment Vehicle Influence WTP for Ecosystem Services Protection?

Crowdfunding Vs. Taxes: Does the Payment Vehicle Influence WTP for Ecosystem Services Protection?

LABOR AS A PAYMENT VEHICLE FOR THE RANGELAND IMPROVEMENT: AN APPLICATION OF CONTINGENT VALUATION METHOD IN YABELLO DISTRICT, SOUTHERN ETHIOPIA

Studies conducted regarding goods and services exhibit a low willingness to pay (WTP) in developing countries. However, many scholars found that this may not be the preference for the good but the result of the choice of payment vehicle. Thus, low WTP for ecosystem conservation may not indicate a low welfare for the ecosystem service. There’s the argument that the choice of the payment vehicles may be needed to obtain exact welfare estimates where there is imperfect substitutability between money and labor. Otherwise, there might occur underestimating of the welfare benefit of ecosystem services. Thus, the ultimate objective of this study is to investigate the labor-as a payment-vehicle by using a CV method and estimating the factors influencing pastoralists’ decision to contribute labor for the rangeland improvement. This study demonstrates it through a rural pastoralists’ choice to elicit their willingness to contribute a labor for the rangeland improvement in Yabello District, southern Ethiopia. A total of 228 sample respondents were selected randomly from the two adjacent Kebeles. Logit model was used to identify the factors that influence pastoralists’ willingness to contribute the labor for the rangeland improvement. The result shows that the endowment of household’s active labor highly influence respondents’ willingness to contribute. In addition to that, variables like sex, age, dominant livelihood activities, livestock holding, perception towards the rangeland improvement, dependency ratio, and initial bid value were significantly influence pastoralists’ willingness to contribute the labor for the rangeland improvement. To sum up, the findings of this study suggest that, just like the monetary value, the labor value can also be used to evaluate the demand of community for the ecosystem services improvement. Thus, employing the labor as a means of payment vehicle for accurate welfare estimations might be a practical alternative, and also giving a chance for the respondents to indicate their willingness to contribute for rehabilitation of degraded ecosystem in developing countries.

Understanding the nexus between forest dependence and willingness to pay for forest conservation: case of forest dependent households in Kenya

PurposeForests support human livelihoods and mitigate against climate change, yet they are at a risk of irreversible loss due to high degradation rates. The success of forest conservation mechanisms depends on involvement and support by forest dependent communities. In this paper, the authors assess forest dependent household's willingness to pay (WTP) labour or cash for a conservation programme seeking to restore degraded forestland in Mount Elgon Forest, Kenya.Design/methodology/approachData were collected from 919 households in Mt Elgon forest reserve, Kenya. A double bounded contingent valuation approach was used to examine households' WTP and an ordered probit model to estimate the determinants of WTP.FindingsThe findings of the study show a higher WTP for conservation through labour days (12 days/month, equivalent to 1800 KES/month) compared to cash (KES 450/month). Forest dependence has a significant influence on households' willingness to support conservation activities. A higher WTP was observed amongst households with higher vulnerability (high shocks value, low asset value and those in the poorest wealth categories) implying that they are more willing to contribute for forest conservation.Originality/valueWhile emerging literature on WTP for forest conservation is growing, few studies have paid attention on the influence of forest dependence on WTP for forest conservation. There are limited studies on use of in-kind contribution as a payment vehicle for WTP. The study's findings show a high WTP in form of labour suggesting the importance of embracing in-kind contribution as a mechanism of supporting forest conservation in contexts of developing countries.

Utilization of early retiring coal-fired power plants as a cold reserve in South Korea: A public perspective

With an intention to reduce greenhouse gas emissions, the South Korean government decided to retire thirty coal-fired power plants early by 2034. Rather than dismantling all of them, some of them are proposed to be used as cold reserves. This paper seeks to explore the public preference and cost bearing for utilization of early retiring coal-fired power plants as a cold reserve by adopting a contingent valuation. To this end, the public willingness to pay (WTP) for the utilization was elicited through a survey of 1000 South Korean households. The payment vehicle was set to be an increase in monthly electricity bill. The method of inducing the WTP was determined as one-and-one-half-bounded questioning. The spike model was selected to reflect the WTP observations with zeros. The average monthly household WTP was estimated as KRW 1596 (USD 1.32), which was worth 3.6% of the average monthly electricity bill (KRW 43,950 or USD 36.32) per household. If the average WTP is re-calculated for all households in the country, it will reach KRW 263.52 billion (USD 217.80 million) a year. Therefore, the utilization can be introduced to the extent that this level of cost is incurred. Several issues that need to be solved in order for the utilization to succeed are also discussed.

Households' willingness to pay for forest conservation in Ethiopia: A review

Environmental valuation studies in the context of developing countries have become more frequent in recent years. However, literature which reviews and examines the environmental valuation studies is limited. Thus, this paper performed a literature review on forest contingent valuation studies conducted in the Ethiopian context in the past two decades (2000 to May 2022), focusing on two specific objectives: (i) to examine amounts of resources that households are willing to pay (WTP) for forest conservation, and (ii) to identify determinants of households’ WTP. Results indicate the mean lower annual WTP of USD 0.41 (2.63 birr) and 7.04 man-days per household in money and labour time, respectively. Whereas the mean upper annual WTP of USD 53.52 per household in monetary payment and 94.34 man-days per household in labour time contribution are found for the management and conservation of forest in Ethiopia. The finding reveals that there is a limited proportion of the examined studies that included and estimated WTP in a non-monetary payment vehicle, implying a need for future researches on the topic. The result shows that demographic and socio-economic variables, physical assets ownership, institutional and infrastructural services and bid price variables were the main determinants of households’ WTP. This suggests that the forest conservation intervention program involving public participation in the country needs to consider the identified determinants of WTP in design and implementation of the program. Moreover, the finding indicates the presence of mixed results on the effect and direction in which some determinants of WTP are affected. This recommends a pressing need for comprehensive future studies on the research theme.

Willingness to pay for harvest regulations and catch outcomes in recreational fisheries: A stated preference study of German cod anglers

Atlantic cod (Gadus morhua) is one of the most important target species of marine recreational anglers in the western Baltic Sea, but the stock is collapsed, and regulations of both commercial and recreational fisheries have recently tightened. To analyze the preferences of anglers for harvest regulations and catch outcomes in the western Baltic recreational cod fishery, we developed four different choice experiments, which were embedded in a large online survey of 1795 German marine anglers. The different choice experiments were used to investigate the consistency of anglers’ preferences in different choice contexts and with varying payment vehicles. We additionally assessed preferences for harvest regulations with opinion-type questions where no obvious trade-offs were involved in the question framing. Our study shows that German cod anglers received benefits from catching and harvesting cod, catching species other than cod, and catching cod as large as possible. There was no utility associated with catching and releasing cod, indicating the highly consumptive nature of this fishery. Anglers preferred stricter quotas of the commercial cod fishery and stricter length-based harvest limits for the recreational fishery compared to the current management. Preferences for the specific configuration of the daily bag limit varied depending on the choice treatment, but a reduction to a daily bag limit of two cod per day and angler consistently resulted in a significant reduction in the willingness to pay. Therefore, the recent collapse of the western Baltic cod stock, lower harvest prospects, and the recent reduction of the bag limit to one cod per day have caused a substantial welfare loss for German cod anglers.

Can payment vehicle influence public willingness to pay for environmental pollution control? Evidence from the CVM survey and PSM method of China

Encouraging the public participation in the pollution control is one of the priorities of many governments. The payment vehicle can provide a context for the public, when they are evaluating their intention to pay for environmental protection. How the payment vehicle affects the public willingness to pay (WTP), and which payment mode is more incentive are discussed in this paper. An open-ended face-to-face CVM survey across 10 provinces in China provides a data support for this study. Heckman selection model is adopted to deal with the selection bias and Propensity Score Matching (PSM) method is used to the WTP valuation by alleviating endogenous problem. This study finds that there is a significant relationship between the payment vehicles and the public WTP for environmental pollution control. The evidence shows that the WTP of mandatory payment is 12.49 RMB/month convincingly higher than that of voluntary payment. A further study based on the Chinese General Social Survey (CGSS) also proves evidence that there are differences in two kinds of mandatory payment vehicles. Finally, some practical policy recommendations are put forward to actively guide the public participation in the pollution control.