Spatial dimensions in stated preference valuation: The role of place attachment

The importance of considering spatial dimensions in welfare analysis is increasingly acknowledged, but there are still knowledge gaps. For this purpose, we turn to environmental psychology and use place attachment, the functional and emotional bond people have to a defined place. We conduct a stated preference study of new recreational mountain homes in southeast Norway and investigate the concept of place attachment to explain spatial preference heterogeneity towards reducing recreational home developments and preserving the mountain landscape and biodiversity. Using structural equation modelling, we find that place attachment is spatially determined and helps explain spatial variations in pro-environmental preferences and distance decay in nonmarket values. In contrast to most previous studies, place attachment reduces pro-environmental behaviour across the entire sample. However, among respondents preferring the smallest development plan, we find that place attachment explains a substantial part of an identified distance decay effect in willingness-to-pay (WTP). About 55 per cent of the negative impact of travel time on WTP indirectly channels through reduced place attachment. Place attachment also substantially improves the fit of our econometric model. Place attachment may provide valuable information on the affected populations when evaluating land-use policies.