People 's Willingness To Pay Research Articles

Willingness to pay for ecosystem benefits of green stormwater infrastructure in Chinese sponge cities

Globally, green stormwater infrastructure (GSI) has been adopted to address urban flash flooding and stormwater pollution and provide additional ecosystem benefits such as recreation, education, and aesthetics to urban communities. However, there has been a lack of research on people's preferences for different ecosystem benefits, making it challenging to understand synergies and trade-offs among co-benefits and optimize GSI planning and design. Additionally, urban stormwater management programs commonly face long-term financial challenges, demanding research that investigates the feasibility of public utility programs. This study fills these gaps in a Chinese context by employing a discrete choice experiment (DCE) to compare public preferences and estimate the monetary values of four GSI benefits, including stormwater quantity and quality treatment, educational benefit, aesthetics, and recreational benefits, in four small-to-medium pilot sponge cities. Results show that respondents preferred some kinds of GSI programs to a conventional lawn space in their living environments, and they had significant willingness to pay (WTP) for GSI programs to obtain educational ($14.8 per household per year, p < 0.001) and recreational benefits ($10.8 per household per year, p < 0.001). Stormwater treatment, as the environmental benefit prioritized by governmental agencies, however, did not generate a significant willingness to pay in any studied cities. Residents also showed indifference towards three different planting aesthetic styles (i.e., formal vs. mixed vs. naturalistic). We conclude that providing social-oriented benefits such as education and recreation is more likely to garner urban residents' financial support for GSI development in the chosen sponge cities. While stormwater utility can be a viable funding source to supplement urban stormwater management programs, people's WTP remains limited, and other financial mechanisms need to be explored.

Willingness to pay for complementary health insurance in Iran: Contingent valuation approach.

The Iranian health system is based on social health insurance, which is responsible for providing access to basic health care. In addition to basic treatment insurance, complementary health insurance (CHI) offers introductory packages that include surplus services. We recently observed an increase in Iran's health insurance loss coefficient, from 16.5% to 90.4% in 2017. To determine the willingness to pay (WTP) for (CHI). We attempted to determine the WTP for CHI in this study to understand better the potential market and the factors that influence CHI demand. The study surveyed 1023 households in the Kerman Province. A questionnaire developed by the researcher was used in this study, based on the principles of contingent valuation and the bidding game method principles. In each scenario, the factors affecting people's WTP, the demand function, and the effective factors on demand were determined using linear multivariate regression using the ordinary least squares method. The average WTP was $ 7.01, $ 12.57, $ 16.19, and $ 18.73 for the first to fourth scenarios, respectively. The demand elasticity for health insurance increased from the first to the fourth scenario, indicating that demand is expandable. On the other hand, it was observed that risk aversion dictates the demand for CHI. Contrary to the insurance claims theory, demand for CHI did not reverse. To this end, insurance fund policymakers can avoid risks and high financial costs by identifying risk-averse individuals.

Benefits of the ecosystem services provided by urban green infrastructures: Differences between perception and measurements

Urban green infrastructures (UGIs) are being increasingly recognized as key providers of ecosystem services (ES) in cities. However, many developing countries still lack the public awareness of the concepts of UGIs and their ES, including the benefit & monetary value of the UGIs’ services, the willingness to pay (WTP) for the UGIs’ services. The relationship between the benefits & monetary value of and the WTP for the services of UGIs has not been extensively investigated. These two aspects were respectively defined as ES supply and as ES demand in the current study, in which their relationship was scientifically described. Meanwhile, the influential factors of the deviation between ES supply and ES demand were explored. Adopting Guangzhou City (China) as a case, the main ES supply of UGIs in three public green spaces including air pollutant removal, daytime temperature reduction, rainwater runoff regulation, and noise abatement was first assessed with field measurements. Further, the main ES demand including people’s preferences, satisfaction, and WTP for the UGIs’ ES was analyzed with survey and statistical analysis. In total, 405 valid questionnaires were distributed to collect the data of ES demand and were analyzed by the nonparametric Kruskal-Wallis H test and a binary logistic regression model. The monetary valuation was used to unify the benefit valuation standards provided by different ESs, so as to more intuitively reflect the contribution of different ESs and compare these with ESs demand which uses WTP as one of the indicators. The results showed significant differences between ES supply and ES demand. The major evidence was that the regulation services could supply most of the ES benefits, while the cultural services were the most demanded by respondents. People had diverse sensitivity to the different types of ES provided by the UGIs. Cultural services were the most easily perceived by the respondents and considered as the top one, followed by regulation services. In addition, the outcome of the survey revealed different criteria regarding ES demand by people, and varying influencing factors for people’s satisfaction and WTP. Benefits, such as education opportunities, entertainment, and health values provided by UGIs in cultural services were more favored by respondents. Last, the statistical analysis confirmed that sociodemographic factors significantly influence people's WTP. This study suggests that UGIs should be oriented towards multifunctional construction, thereby emphasizing the relationship and balance between ecological integrity and social perception.

Public distrust and valuation biases: Identification and calibration with contingent valuation studies of two air quality improvement programs in China

Economic valuation can be biased by public distrust in local institutions when those institutions are involved in the valuation scenario design, which is often the case for contingent valuation (CV) studies. To better identify and to calibrate the potential biases, we conduct two CV surveys on people's willingness to pay (WTP) for the implementation of new air quality improvement programs at the municipality level in China. A joint selection modeling strategy is developed and employed to identify the potential biases in WTP estimations caused by people's ex-ante distrust in local institutions. The results show the various channels through which the distrust in local institutions affects people's WTP between two cities. For one city, the distrust in local institutions significantly increases the probability of one protesting the new program, which results in an underestimation of WTP by 16%. For the other city, the distrust in local institutions leads to a lower estimation of WTP by 26%, mostly via the determination function.

Willingness to pay for policies to reduce future deaths from climate change: evidence from a British survey

ObjectivesWithout urgent action, climate change will put the health of future populations at risk. Policies to reduce these risks require support from today's populations; however, there are few studies assessing public support for such policies. Willingness to pay (WtP), a measure of the maximum a person is prepared to pay for a defined benefit, is widely used to assess public support for policies. We used WtP to investigate whether there is public support to reduce future health risks from climate change and if individual and contextual factors affect WtP, including perceptions of the seriousness of the impacts of climate change. Study designA cross-sectional British survey. MethodsQuestions about people's WtP for policies to reduce future climate change-related deaths and their perceptions of the seriousness of climate change impacts were included in a British survey of adults aged 16 years and over (n=1859). We used contingent valuation, a survey-based method for eliciting WtP for outcomes like health which do not have a direct market value. ResultsThe majority (61%) were willing to pay to reduce future increases in climate change-related deaths in Britain. Those regarding climate change impacts as not at all serious were less willing to pay than those regarding the impacts as extremely serious (OR 0.04, 95% CI 0.02-0.09). Income was also related to WtP; the highest-income group were twice as likely to be willing to pay as the lowest-income group (OR 2.14, 95% CI 1.40-3.29). ConclusionsThere was public support for policies to address future health impacts of climate change; the level of support varied with people's perceptions of the seriousness of these impacts and their financial circumstances. Our study adds to evidence that health, including the health of future populations, is an outcome that people value and suggests that framing climate change around such values may help to accelerate action.

Valuing health risk in agriculture: a choice experiment approach to pesticide use in China.

This paper presents a choice experiment approach to investigate farmers' valuations for health risk changes associated with pesticide use in Anqiu County, China. An empirical comparison on the disparity between farmers' willingness to pay (WTP) for a health risk reduction and willingness to accept (WTA) for the same risk increase is also conducted. Respondents were randomly assigned into the WTP group or the WTA group. Four attributes (health consequence, baseline risk, risk change size, and price) were identified and included. The results show that cancer consequence due to pesticide use decreases the utility of the farmer. A higher baseline risk has a higher WTP to reduce the risk and a higher probability of receiving compensation. If the health risk change size is bigger, it will result in a higher WTP and higher compensation. Household income, education, and age have significant and positive impacts on farmers' WTP. Farmers who are more educated or female are more likely to accept the compensation scheme if health risks increase. The marginal WTA for the same risk change is about two times higher than the marginal WTP. The findings of this study can contribute to the literature comparing people's WTP and WTA in a discrete choice experiment on valuing health risk changes associated with pesticide use.

How does probability judgment influence contingent valuation method to estimate WTP for natural disaster reduction

ABSTRACTContingent valuation method (CVM) is a widely adopted approach for estimating individuals' willingness to pay (WTP) for public goods. Using national survey data from Japan, this paper examines how the estimated WTP through CVM varies with different risk probabilities and risk information presentations in the context of natural disasters. The findings show that people's WTP is insensitive to the frequency of the disaster and the baseline level of the risk; the commonly observed ratio bias (RB) effect is not significant in our investigation. However, consistent with one similar study before, “group diffusion,” an opposite effect of RB is likely to occur, especially when the disparity between different risk descriptions is large. The result of this paper suggests that WTP may be influenced by the risk information provided and the way risk is framed in communications; therefore, CVM should be cautiously treated through rigorous validity checks when it is used to estimate WTP and risk is an important factor.

Measuring the willingness to pay for drinking water quality improvements: results of a contingent valuation survey in Songzi, China.

The aim of this study is to elicit local residents' willingness to pay (WTP), by applying the contingent valuation method as a surcharge on their water bill, for a given improvement in the drinking water quality and the supply reliability. The mean WTP for the drinking water quality improvement program was estimated to be 16.71 yuan (0.3% of total household income). The results note that more educated respondents and households with higher income and with fewer household members are, on average, willing to pay more. This study also demonstrates that respondents' concerns regarding drinking water quality and perceptions of the health risk of drinking water quality can have significant positive impacts on people's WTP. The research results can help decision-makers understand the local population's demand for improved drinking water quality and undertake an environmental cost-benefit analysis.

The public perceptions and willingness to pay: from the perspective of the smog crisis in China

The deteriorating air quality, which is linked to human actions related to energy resources, has become an urgent global problem. China's air pollution has reached the hazardous level since 2000s. In consideration of the serious health and social problems, residential demand for clean air is increasing. This paper applies the Contingent Valuation method to estimate public's willingness to pay (WTP) for reducing air pollution in the urban area of China. Open-ended scenarios through face-to-face surveys are used to elicit public's WTP. The Two-Part model is employed for the estimation: the probit model is used to estimate the probability of respondents who have positive WTP values, and the interval regression model is employed to estimate the specific WTP level of those with nonzero WTP values. The results show that nearly 90% of the respondents are willing to pay for reducing air pollution, and the average amount of WTP per individual is 382.6RMB per year. Household income is found to be positively correlated with people's WTP, and those who trust the government are more willing to share the cost of reducing air pollution. This study recommends designing some effective mechanisms to tap the potentially available source of money for smog mitigation and improving the transparency of smog governance to enhance the government credibility as solutions to cope with smog crisis.

Adaptation Strategy on Urban Air Quality, Case Study: Semarang Urban Area, Indonesia

The economic growth in the urban areas is characterized by the growth of the industrial sector and traffic density. The increase in the amount of motorized vehicles caused an increase in emission in the air. Emission is mobile sources of pollution, which interfere with the air quality in the urban areas. These effects human health negatively. This research was estimating the willingness to pay (WTP) with the contingent valuation method. This research aims to determine the public awareness to keep their environment clean. It is indicated by people's WTP on policy implication that offered once every year. The strategy offered to diminish mobile sources of pollution are (1) improvement in transportation infrastructure, (2) reforestation, (3) replacement of old motorized vehicles, and (4) the use of alternative roads on traffic peak hours. The strategies to diminish the mobile sources of pollution were ranked by an Analytical Hierarchy Process (AHP) according to people's preference in the implementation. The strategies have implications in four consecutive years.The research result showed that the level of WTP of the society was still low, as only 38% of the people are willing to pay a maximum of 40,000 rupiah every year to reduce mobile pollution sources. The determinant factors of the WTP are estimated by the ordered probit method. The estimated results showed that the income of the respondents compared to health costs, caused by damaged lungs, eyes, and nose, has an influence on the WTP. While the age, education, and distance to the polluted area of the respondents are not significantly influencing the WTP.

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.

What Explains Willingness to Pay for Smoking-Cessation Treatments —Addiction Level, Quit-Rate Effectiveness or the Opening Bid?

Several countries have now passed laws that place limitations on where smokers may smoke. A range of smoking-cessation treatments have become available, many of which have documented increased quit rates. Population surveys show that most smokers wish to quit, and most non-smokers would prefer to reduce the prevalence of smoking in society. The strengths of these preferences, however, as measured by their willingness to pay (WTP), have not yet been investigated. This study aims to identify variables that explain variations in people's answers to WTP questions on smoking-cessation treatments. A representative sample of the Norwegian population was asked their WTP in terms of an earmarked contribution to a public smoking-cessation programme. A sub-group of daily smokers was, in addition, asked about their WTP for a hypothetical treatment that would remove their urge to smoke. The impact of variation in the question format (different opening bids) on stated WTP was compared with that of factors suggested by economic theory, such as quit-rate effectiveness, degree of addiction as measured by the 12-item Cigarette Dependence Scale (CDS-12), and degree of peer group influence as measured by the proportion of one's friends who smoke. In both programmes, the most important determinant for explaining variations in WTP was the size of the opening bid. Differences in quit-rate effectiveness did not matter for people's WTP for the smoking-cessation programme. Addiction, and having a small proportion of friends who smoke, were positively associated with smokers' WTP to quit smoking. Variations in WTP were influenced more by how the question was framed in terms of differences in opening bids, than by variables reflecting the quality (effectiveness) and need (addiction level) for the good in question. While the WTP method is theoretically attractive, the findings that outcomes in terms of different quit rates did not affect WTP, and that WTP answers can be manipulated by the chosen opening bid, should raise further doubts on the ability of this method to provide valid and reliable answers that reflect true preferences for health and healthcare.

Determinants of willingness to pay for coastal zone quality improvement

Individuals’ decision to use a particular coastal beach is influenced by their preferences and perceptions as well as site's characteristics. This study examines visitors’ attributes and desired site specific characteristics in order to determine the factors affecting willingness to pay (WTP) for an improvement quality (environment, water as well as recreation activities) program. A contingent valuation survey was carried out in order to evaluate the economic benefits of improving coastal zone quality. The study area was coastal line of an area in Central Greece (Volos) where some beaches failures to meet the standards of the Blue Flag program. Our empirical findings suggest that the major variables affecting respondents’ willingness to pay were related to previous environmental behavior. The previous respondents’ participation in environmental protection programs by paying an amount was the most important determinate parameter for their WTP. Income, age, gender, coastal recreational activities and environmental quality of the site plays an important role to people's WTP for quality improvement of coastal zone.

Eliciting Public Support for Greening the Electricity Mix Using Random Parameter Techniques

With its commitment to double the share of renewable fuels in electricity generation to at least 30% by 2020, the German government has embarked on a potentially costly policy course whose public support remains an open empirical question. Building on household survey data, in this paper we trace peoples' willingness-to-pay (WTP) for various fuel mixes in electricity generation, and capture preference heterogeneity among respondents using random parameter techniques. Based on our estimates, we trace out the locus that links the premia charged for specific electricity mixes with the fraction of people supporting the policy. Albeit people's WTP for a certain fuel mix in electricity generation is positively correlated to the renewable fuel share, our results imply that the current surcharge effectively exhausts the financial scope for subsidizing renewable fuels.

Eliciting public support for greening the electricity mix using random parameter techniques

With its commitment to double the share of renewable fuels in electricity generation to at least 30% by 2020, the German government has embarked on a potentially costly policy course whose public support remains an open empirical question. Building on household survey data, in this paper we assess people's willingness-to-pay (WTP) for various fuel mixes in electricity generation, and capture preference heterogeneity among respondents using random parameter techniques. Based on our estimates, we trace out the locus that links the premia charged for specific electricity mixes with the fraction of people supporting the policy. Albeit people's WTP for a certain fuel mix in electricity generation is positively correlated to the renewable fuel share, our results imply that the current surcharge effectively exhausts the financial scope for subsidizing renewable fuels.

Estimating the Willingness-to-Pay for Urban Housing in Chinese Cities

The housing market, an important component of the urban economy, is closely integrated with urban development. Urban development attracts labor inflows which then increase the housing demand in the cities. Urban dwellers' willingness-to-pay (WTP) for housing, as part of their living costs, depends on their incomes they can earn in the cities and the quality of life (QOL) they want to enjoy. Urban wage growth and quality of life improvements are always accompanied by increased demand and increased WTP. This paper uses the average wages of fully-employed employees and various city indicators to reflect the urban QOL to explain the relationships among people's WTP for housing, their urban wages and their urban QOL across 35 metropolitan cities in China. The empirical results illustrate that the urban QOL represented by city indicators and the average wage level accounts for approximately 70% of the housing price variation. Although wages still have significant impact on the WTP, the QOL in Chinese metropolitan cities tends to contribute more to the residents' WTP for housing, indicating that social and natural environments are valued by urban residents more and more.

Alternative approaches to obtain optimal bid values in contingent valuation studies and to model protest zeros. Estimating the determinants of individuals' willingness to pay for home care services in day case surgery.

The use of day case surgery has increased rapidly as an alternative to inpatient surgery. Little is known, however, about the value of day case surgery to patients. The aim of this paper was to develop a contingent valuation survey to investigate how individuals value the costs of shifting from inpatient to day case surgery based on home care services. Using the willingness to pay (WTP) approach, two kinds of sequential experiments are compared: the maximum likelihood recursion (MLR) method and the C-optimal sequential procedure. The goal of sequential experimentation is to find bid values that provide the maximum possible information about the parameters of the WTP distribution, especially when the sample size is small. The C-optimal sequential procedure is shown to be an improvement, in terms of the statistical precision in small samples, over the MLR method. In addition, the paper presents a double hurdle (DH) approach for modelling the determinants of individuals' WTP. Using data from a contingent valuation survey conducted in 1996 on patients selected from the Day Case Surgery Unit in a hospital in the region of Catalonia, we argue that participation in the market offered and the level of consumption, that is, people's WTP, should be treated as individual choices. The results show that income and sex are related to WTP. Also, in this study, a clear presence of starting-point bias, introduced by the bid offered, was found. It is concluded that the WTP technique is potentially useful in evaluating health care programmes, although it is important to note that the criteria used to find an optimal design (in our model to minimize the asymptotic variance of the estimator used) may be restrictive from an economic point of view.