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Estimating Willingness to Pay for Improved Drinking Water Quality Using Averting Behavior Method with Perception Measure

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  • Mi-Jung Um
  • Seung-Jun Kwak
  • Tai-Yoo Kim
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    Abstract

    This paper suggests an application of an averting behaviormethod to reconcile inconsistent public activity with objectiveenvironmental risk. In Korea, an historically polluted watersupply has created citizen resistance to using tap water. Koreansperceive low quality levels for tap water, although objectivelymeasured data show that the pollution levels are lower than theacceptable risk. We hypothesized that the irrational aversion tousing tap water is a consequence of inconsistencies between theobjectively measured and perceived pollution levels. We introducethe perception averting behavior method, in which we add aperception measure unit to the conventional averting behaviormethod. We found that the perception measure provided a validexplanation for citizens' aversion to using tap water in Korea. Copyright Kluwer Academic Publishers 2002

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    File URL: http://hdl.handle.net/10.1023/A:1014537330423
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    Bibliographic Info

    Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

    Volume (Year): 21 (2002)
    Issue (Month): 3 (March)
    Pages: 285-300

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    Handle: RePEc:kap:enreec:v:21:y:2002:i:3:p:285-300

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    Web page: http://www.springerlink.com/link.asp?id=100263

    Related research

    Keywords: drinking water; perception and behavior; risk; tap water;

    References

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    1. Gerking, Shelby & Stanley, Linda R, 1986. "An Economic Analysis of Air Pollution and Health: The Case of St. Louis," The Review of Economics and Statistics, MIT Press, vol. 68(1), pages 115-21, February.
    2. Bartik, Timothy J., 1988. "Evaluating the benefits of non-marginal reductions in pollution using information on defensive expenditures," Journal of Environmental Economics and Management, Elsevier, vol. 15(1), pages 111-127, March.
    3. Grether, David M & Plott, Charles R, 1979. "Economic Theory of Choice and the Preference Reversal Phenomenon," American Economic Review, American Economic Association, vol. 69(4), pages 623-38, September.
    4. Charles W. Abdalla & Brian A. Roach & Donald J. Epp, 1992. "Valuing Environmental Quality Changes Using Averting Expenditures: An Application to Groundwater Contamination," Land Economics, University of Wisconsin Press, vol. 68(2), pages 163-169.
    5. Harrington, Winston & Krupnick, Alan J. & Spofford, Walter Jr., 1989. "The economic losses of a waterborne disease outbreak," Journal of Urban Economics, Elsevier, vol. 25(1), pages 116-137, January.
    6. Tversky, Amos & Slovic, Paul & Kahneman, Daniel, 1990. "The Causes of Preference Reversal," American Economic Review, American Economic Association, vol. 80(1), pages 204-17, March.
    7. Arrow, Kenneth J, 1982. "Risk Perception in Psychology and Economics," Economic Inquiry, Western Economic Association International, vol. 20(1), pages 1-9, January.
    8. Andrew S. Laughland & Wesley N. Musser & James S. Shortle & Lynn M. Musser, 1996. "Construct Validity of Averting Cost Measures of Environmental Benefits," Land Economics, University of Wisconsin Press, vol. 72(1), pages 100-112.
    9. Courant, Paul N. & Porter, Richard C., 1981. "Averting expenditure and the cost of pollution," Journal of Environmental Economics and Management, Elsevier, vol. 8(4), pages 321-329, December.
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    Cited by:
    1. Henrique Monteiro, 2010. "Residential Water Demand in Portugal: checking for efficiency-based justifications for increasing block tariffs," Working Papers Series 1 ercwp0110, ISCTE-IUL, Business Research Unit (BRU-IUL).
    2. Irina Klytchnikova & Michael Lokshin, 2009. "Measuring Welfare Gains from Better Quality Infrastructure," Journal of Infrastructure Development, India Development Foundation, vol. 1(2), pages 87-109, December.
    3. Olivier Beaumais & Anne Briand & Katrin Millock & Céline Nauges, 2014. "What are Households Willing to Pay for Better Tap Water Quality? A Cross-Country Valuation Study," Working Papers 2014.24, Fondazione Eni Enrico Mattei.
    4. John C. Whitehead, 2005. "Improving Willingness to Pay Estimates for Quality Improvements Throught Joint Estimation with Quality Perceptions," NCEE Working Paper Series 200508, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Aug 2005.
    5. repec:hal:journl:halshs-00497453 is not listed on IDEAS
    6. Noor, Junaid & Siddiqi, Wasif & Muhammad, Taj, 2010. "Estimation of Willingness to Pay for Improvements in Drinking Water Quality in Lahore: A Case Study of WASA, Lahore," MPRA Paper 53763, University Library of Munich, Germany.

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