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The effect of forest land use on the cost of drinking water supply: A spatial econometric analysis

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  • Abildtrup, Jens
  • Garcia, Serge
  • Stenger, Anne

Abstract

Forest land use is often associated with the protection of water resources from contamination and the reduced cost of drinking water supply. This study attempted to measure the value of the forest on the quality of water resources from a contingent market, namely drinking water supply, by estimating variations in drinking water costs as a function of variations in land uses. Spatial correlations were taken into account because of the use of different geographical scales (i.e., water service area and land uses) and the potential existence of organizational and technological spillovers between water services. We found a significant negative effect of forest land use on water costs. We found no evidence of spatial spillovers concerning the management regime but did find that organizational choices (i.e., grouping of municipalities within a water service) and factors related to the scarcity of resources in neighboring water services have an impact on water costs.

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Bibliographic Info

Paper provided by European Association of Agricultural Economists in its series 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland with number 120385.

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Date of creation: 2011
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Handle: RePEc:ags:eaae11:120385

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Related research

Keywords: Water quality; land uses; forest; water supply service; spatial spillovers; Demand and Price Analysis; Land Economics/Use; Resource /Energy Economics and Policy; C21; Q23; Q25; R14;

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  1. Nunez, Daisy & Nahuelhual, Laura & Oyarzun, Carlos, 2006. "Forests and water: The value of native temperate forests in supplying water for human consumption," Ecological Economics, Elsevier, vol. 58(3), pages 606-616, June.
  2. Kelejian, Harry H & Prucha, Ingmar R, 1998. "A Generalized Spatial Two-Stage Least Squares Procedure for Estimating a Spatial Autoregressive Model with Autoregressive Disturbances," The Journal of Real Estate Finance and Economics, Springer, vol. 17(1), pages 99-121, July.
  3. Serge Garcia & Alban Thomas, 2001. "The Structure of Municipal Water Supply Costs: Application to a Panel of French Local Communities," Journal of Productivity Analysis, Springer, vol. 16(1), pages 5-29, July.
  4. Robert M. Clark & Richard G. Stevie, 1981. "A Water Supply Cost Model Incorporating Spatial Variables," Land Economics, University of Wisconsin Press, vol. 57(1), pages 18-32.
  5. Abildtrup, Jens & Strange, Niels, 2000. "The option value of non-contaminated forest watersheds," Forest Policy and Economics, Elsevier, vol. 1(2), pages 115-125, August.
  6. Luc Anselin, 2001. "Spatial Effects in Econometric Practice in Environmental and Resource Economics," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 705-710.
  7. Biao, Zhang & Wenhua, Li & Gaodi, Xie & Yu, Xiao, 2010. "Water conservation of forest ecosystem in Beijing and its value," Ecological Economics, Elsevier, vol. 69(7), pages 1416-1426, May.
  8. Marcel Boyer & Serge Garcia, 2004. "Régulation et mode de gestion : une étude économétrique sur les prix et la performance," CIRANO Working Papers 2004s-60, CIRANO.
  9. Hein, Lars & van Koppen, Kris & de Groot, Rudolf S. & van Ierland, Ekko C., 2006. "Spatial scales, stakeholders and the valuation of ecosystem services," Ecological Economics, Elsevier, vol. 57(2), pages 209-228, May.
  10. Subhrendu K. Pattanayak & David T. Butry, 2005. "Spatial Complementarity of Forests and Farms: Accounting for Ecosystem Services," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(4), pages 995-1008.
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