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Heterogeneous preferences for water quality attributes: The Case of eutrophication in the Gulf of Finland, the Baltic Sea

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  • Kosenius, Anna-Kaisa
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    Abstract

    This paper examines the preference heterogeneity of the general public regarding water quality attributes and provides welfare estimates (WTP) for three nutrient-reduction scenarios that would improve the water quality in the Gulf of Finland, part of the Baltic Sea. In the choice experiment (CE), the improvement is described in terms of four water quality attributes: water clarity, abundance of coarse (non-attractive) fish, status of bladder wrack (a type of seaweed), and mass occurrences of blue-green algae blooms. The data are analysed with multinomial logit (MNL), random parameters logit (RPL), and latent class (LCM) models. The results from MNL and RPL show that, on average for Finns, clear water is, relatively speaking, the most important water quality characteristics followed by desire for fewer occurrences of blue-green algae. The results also show that the probability of expressing willingness to contribute to improvement of the water quality increases with residential or recreational contact with the Gulf of Finland, a higher income than average, a younger than average age, and lack of dependent children in the household. The LCM reveals that opinions about the order of relative importance of attributes depend on age, household income, coastal residence, and vacation home ownership. The present values for three nutrient reduction scenarios of different intensities ranging from 28,000Â million euro to 54,000Â million euro were calculated using mean welfare estimates, discounted for perpetuity with a 2% rate.

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    Bibliographic Info

    Article provided by Elsevier in its journal Ecological Economics.

    Volume (Year): 69 (2010)
    Issue (Month): 3 (January)
    Pages: 528-538

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    Handle: RePEc:eee:ecolec:v:69:y:2010:i:3:p:528-538

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

    Related research

    Keywords: Preference heterogeneity Choice experiment Eutrophication Multinomial logit model Random parameters logit model Latent class model;

    References

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    Cited by:
    1. Marita Laukkanen & Céline Nauges, 2012. "Evaluating greening farm policies: A structural model for assessing agri-environmental subsidies," Working Papers 40, Government Institute for Economic Research Finland (VATT).
    2. Yoo, James & Ready, Richard C., 2014. "Preference heterogeneity for renewable energy technology," Energy Economics, Elsevier, vol. 42(C), pages 101-114.
    3. Tomás del Barrio Casto & William Nilsson & Andrés J. Picazo-Tadeo, 2013. "How wrong can you be, without noticing? Further evidence on speci cation errors in the Conditional Logit," Working Papers 1318, Department of Applied Economics II, Universidad de Valencia.
    4. Yoo, James & Simonit, Silvio & Connors, John P. & Kinzig, Ann P. & Perrings, Charles, 2014. "The valuation of off-site ecosystem service flows: Deforestation, erosion and the amenity value of lakes in Prescott, Arizona," Ecological Economics, Elsevier, vol. 97(C), pages 74-83.
    5. Windle, Jill & Rolfe, John, 2010. "Assessing community values for reducing agricultural emissions to improve water quality and protect coral health in the Great Barrier Reef," Research Reports 107583, Australian National University, Environmental Economics Research Hub.
    6. Kosenius, Anna-Kaisa, 2013. "Preference discontinuity in choice experiment: Determinants and implications," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 45(C), pages 138-145.
    7. Christine Bertram, Katrin Rehdanz, 2012. "On the Environmental Effectiveness of the EU Marine Strategy Framework Directive," Kiel Working Papers 1760, Kiel Institute for the World Economy.
    8. Jill Windle & John Rolfe, 2010. "Assessing community values for reducing agricultural emissions to improve water quality and protect coral health in the Great Barrier Reef," Environmental Economics Research Hub Research Reports 1084, Environmental Economics Research Hub, Crawford School of Public Policy, The Australian National University.
    9. Rolfe, John & Windle, Jill, 2011. "Assessing community values for reducing agricultural emissions to improve water quality and protect coral health in the Great Barrier Reef," 2011 Conference (55th), February 8-11, 2011, Melbourne, Australia 100705, Australian Agricultural and Resource Economics Society.

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