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Valuing Biodiversity Losses Due To Acid Deposition: A Contingent Valuation Study Of Uncertain Environmental Gains

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  • MacMillan, Douglas
  • Hanley, Nick
  • Buckland, Steve

Abstract

Acid deposition is a present and future cause of biodiversity losses in vulnerable upland areas of Scotland important for nature conservation. However, the exact nature of damage under the status quo, and both the timing and extent of recovery of upland ecosystems if deposition is reduced. are subject to uncertainty. This uncertainty complicates damage cost estimation. In this paper, we have explored the use of CVM to measure the willingness to pay (WfP) of the Scottish population for uncertain recovery/damage scenarios from reduced acid rain deposition. An optimally-designed referendum format was used, utilising the distribution of open-ended bids from a pilot study to determine bid amounts and sampling size for each bid amount. Eight explanatory variables, including future damage level were selected in a non-linear step-wise regression analysis. Average household WTP for abatement of acid rain was £247 and £351 per year when faced with low and high future damage levels respectively. Recovery level and recovery time did not significantly influence WTP. When faced with risky outcomes regarding future damage and recovery level respondents were found to be risk averse to both environmental gains and losses.

Suggested Citation

  • MacMillan, Douglas & Hanley, Nick & Buckland, Steve, 1995. "Valuing Biodiversity Losses Due To Acid Deposition: A Contingent Valuation Study Of Uncertain Environmental Gains," Discussion Papers in Ecological Economics 140539, University of Stirling, Department of Economics.
  • Handle: RePEc:ags:ukstdp:140539
    DOI: 10.22004/ag.econ.140539
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    File URL: http://ageconsearch.umn.edu/record/140539/files/us-95-01.pdf
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    References listed on IDEAS

    as
    1. Spash, Clive L. & Hanley, Nick, 1995. "Preferences, information and biodiversity preservation," Ecological Economics, Elsevier, vol. 12(3), pages 191-208, March.
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    3. Nick Hanley & Clive Spash & Lorna Walker, 1995. "Problems in valuing the benefits of biodiversity protection," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 5(3), pages 249-272, April.
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    8. Fischhoff, Baruch & Furby, Lita, 1988. "Measuring Values: A Conceptual Framework for Interpreting Transactions with Special Reference to Contingent Valuation of Visibility," Journal of Risk and Uncertainty, Springer, vol. 1(2), pages 147-184, June.
    9. Stephen Polasky & Andrew Solow & James Broadus, 1993. "Searching for uncertain benefits and the conservation of biological diversity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 3(2), pages 171-181, April.
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