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Watershed Management Benefits in a Hypothetical, Real Intention and Real Willingness to Pay Approach

Author

Listed:
  • Virpi Lehtoranta

    () (Finnish Environment Institute (SYKE))

  • Anna-Kaisa Kosenius

    (University of Helsinki)

  • Elina Seppälä

    (Finnish Environment Institute (SYKE)
    Northern Satakunta municipal federation for basic services and public utilities (PoSa))

Abstract

Despite growing knowledge of a disparity between stated and actual willingness to engage in pro-environmental behavior, little is known about the cognitive or attitudinal factors explaining the disparity. In the context of water quality improvement in a river basin, we address the disparity issue by applying two approaches: a typical valuation question with a hypothetical option of voluntary payment and a valuation question with a real option of voluntary payment. The latter treatment allows for further analysis of the respondents who committed to a real payment. We show empirical evidence on the psychological factors explaining the disparity between the treatments and its relationship with response uncertainty. The extent of learning from the survey about water management of the watershed increased the likelihood of stating the willingness to contribute, either with certainty or uncertainty. In turn, a previous contribution to the environmental issue, higher income, belief in the scenario, and responding to the hypothetical treatment increased the likelihood of stating certain willingness to contribute. Our findings indicate that the factors influencing the decision on the maximum payment differ between treatments. Cognitive factors, such as perceiving the valuation scenario as plausible, learning from the questionnaire, and in which mailing round the respondent completed the survey, only explained the stated amount for the willingness to pay in the treatment with a hypothetical option for voluntary payment. In the real option treatment, a higher stated willingness to pay was more likely if the respondent actually made the payment and had a higher household income.

Suggested Citation

  • Virpi Lehtoranta & Anna-Kaisa Kosenius & Elina Seppälä, 2017. "Watershed Management Benefits in a Hypothetical, Real Intention and Real Willingness to Pay Approach," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 31(13), pages 4117-4132, October.
  • Handle: RePEc:spr:waterr:v:31:y:2017:i:13:d:10.1007_s11269-017-1733-3
    DOI: 10.1007/s11269-017-1733-3
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    References listed on IDEAS

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