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Willingness to accept compensation for the environmental risks of oil transport on the Amazon: A choice modeling experiment

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  • Casey, James F.
  • Kahn, James R.
  • Rivas, Alexandre A.F.
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    Abstract

    This paper looks at the question of whether subsistence level/indigenous people place a value on the preservation of ecosystems independent of direct impacts of environmental change, such as impacts on their production activities. The economics literature generally suggests that non-use values don't exist among the poor and in the informal sector of the economy. We examine this issue through a choice modeling experiment. A survey was conducted of rainforest communities who live on the banks of the Amazon River (Rio Solimões), in the vicinity of proposed oil and gas pipelines. The data were analyzed in the choice modeling framework, revealing relatively high amounts of compensation that were necessary in order to accept the potential ecosystem damages associated with oil transport, even if the people were completely compensated for direct damages such as loss of access to productive resources. These results suggest that environmental quality is important for its own sake, a result that is very different from the implicit assumption among many economists.

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    Bibliographic Info

    Article provided by Elsevier in its journal Ecological Economics.

    Volume (Year): 67 (2008)
    Issue (Month): 4 (November)
    Pages: 552-559

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    Handle: RePEc:eee:ecolec:v:67:y:2008:i:4:p:552-559

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    Web page: http://www.elsevier.com/locate/ecolecon

    Related research

    Keywords: Amazon River Choice experiments Non-use value Ecosystem services;

    References

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    1. Shrestha, Ram K. & Alavalapati, Janaki R. R., 2004. "Valuing environmental benefits of silvopasture practice: a case study of the Lake Okeechobee watershed in Florida," Ecological Economics, Elsevier, vol. 49(3), pages 349-359, July.
    2. Rolfe, John & Bennett, Jeff & Louviere, Jordan, 2000. "Choice modelling and its potential application to tropical rainforest preservation," Ecological Economics, Elsevier, vol. 35(2), pages 289-302, November.
    3. Stevens, Thomas H. & Barrett, Christopher B. & Willis, Cleve E., 1997. "Conjoint Analysis Of Groundwater Protection Programs," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 26(2), October.
    4. Grossman, Gene M & Krueger, Alan B, 1995. "Economic Growth and the Environment," The Quarterly Journal of Economics, MIT Press, vol. 110(2), pages 353-77, May.
    5. Nick Hanley & Robert Wright & Vic Adamowicz, 1998. "Using Choice Experiments to Value the Environment," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 11(3), pages 413-428, April.
    6. Stern, David I., 2004. "The Rise and Fall of the Environmental Kuznets Curve," World Development, Elsevier, vol. 32(8), pages 1419-1439, August.
    7. Roe, Brian & Boyle, Kevin J. & Teisl, Mario F., 1996. "Using Conjoint Analysis to Derive Estimates of Compensating Variation," Journal of Environmental Economics and Management, Elsevier, vol. 31(2), pages 145-159, September.
    8. Stevens, T. H. & Belkner, R. & Dennis, D. & Kittredge, D. & Willis, C., 2000. "Comparison of contingent valuation and conjoint analysis in ecosystem management," Ecological Economics, Elsevier, vol. 32(1), pages 63-74, January.
    9. Chuan-zhong Li & Jari Kuuluvainen & Eija Pouta & Mika Rekola & Olli Tahvonen, 2004. "Using Choice Experiments to Value the Natura 2000 Nature Conservation Programs in Finland," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 29(3), pages 361-374, November.
    10. Stephen K. Swallow & James J. Opaluch & Thomas F. Weaver, 1992. "Siting Noxious Facilities: An Approach That Integrates Technical, Economic, and Political Considerations," Land Economics, University of Wisconsin Press, vol. 68(3), pages 283-301.
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    Cited by:
    1. Sonja S. Teelucksingh & Paulo A.L.D. Nunes, 2010. "Biodiversity Valuation in Developing Countries: A Focus on Small Island Developing States (SIDS)," Working Papers 2010.111, Fondazione Eni Enrico Mattei.
    2. Juan Cardenas, 2011. "Social Norms and Behavior in the Local Commons as Seen Through the Lens of Field Experiments," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 48(3), pages 451-485, March.
    3. Lüthi, Sonja & Wüstenhagen, Rolf, 2012. "The price of policy risk — Empirical insights from choice experiments with European photovoltaic project developers," Energy Economics, Elsevier, vol. 34(4), pages 1001-1011.
    4. Tanya O’Garra, 2009. "Bequest Values for Marine Resources: How Important for Indigenous Communities in Less-Developed Economies?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 44(2), pages 179-202, October.
    5. Juan Camilo C�rdenas, 2009. "Experiments in Environment and Development," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 157-182, 09.
    6. Rajesh Kumar Rai & Helen Scarborough, 2012. "Non-market Valuation in Developing Countries: Estimating Benefits of Managing Invasive Plants Using Choice a Choice Experiment," Economics Series 2012_8, Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance.

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