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Economic analysis of spatial preferences heterogeneity of water quality

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  • Martin-Ortega, Julia
  • Brouwer, Roy
  • Berbel, Julio

Abstract

The main objective of this study is to account for spatial preference variability in the economic valuation of water quality improvements in the river basin context. This is expected to be particularly relevant for the implementation of the European WFD, as it will involve spatially differentiated perceptions of the benefits of water quality changes. A choice experiment is developed based on maps to elicit welfare measures for water quality improvements across sub-basins in the Guadalquivir River Basin in Spain. Variation is introduced simultaneously in the spatial distribution of goods and services and their beneficiaries, for the accounting of spatial preference heterogeneity (i.e. people’s different valuation of changes in environmental good provision depending on where the changes take place in relation to where they live). According to our results, not accounting for spatial preference heterogeneity leads to an underestimation of welfare for water quality improvement when aggregating WTP values from sub-basins to the river basin as a whole.

Suggested Citation

  • Martin-Ortega, Julia & Brouwer, Roy & Berbel, Julio, 2009. "Economic analysis of spatial preferences heterogeneity of water quality," 2009 Conference, August 16-22, 2009, Beijing, China 50626, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae09:50626
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    File URL: http://ageconsearch.umn.edu/record/50626/files/Martin-Ortega%20et%20al%20%20-%20IAAE%20Conference%20_161_.pdf
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    References listed on IDEAS

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    1. Hausman, Jerry & McFadden, Daniel, 1984. "Specification Tests for the Multinomial Logit Model," Econometrica, Econometric Society, vol. 52(5), pages 1219-1240, September.
    2. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, December.
    3. Ian J. Bateman & Roy Brouwer & Helen Davies & Brett H. Day & Amelie Deflandre & Salvatore Di Falco & Stavros Georgiou & David Hadley & Michael Hutchins & Andrew P. Jones & David Kay & Graham Leeks & M, 2006. "Analysing the Agricultural Costs and Non-market Benefits of Implementing the Water Framework Directive," Journal of Agricultural Economics, Wiley Blackwell, vol. 57(2), pages 221-237, July.
    4. Roy Brouwer & Julia Martin-Ortega & RJulio Berbel, 2010. "Spatial Preference Heterogeneity: A Choice Experiment," Land Economics, University of Wisconsin Press, vol. 86(3).
    5. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132-132.
    6. Robert J. Johnston & RStephen K. Swallow & Dana Marie Bauer, 2002. "Spatial Factors and Stated Preference Values for Public Goods: Considerations for Rural Land Use," Land Economics, University of Wisconsin Press, vol. 78(4), pages 481-500.
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    Keywords

    Environmental Economics and Policy;

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