Subjective vs. objective measures in the valuation of water quality

Artell, Janne; Ahtiainen, Heini; Pouta, Eija

doi:10.1016/j.jenvman.2013.09.007

Cited by 56 publications

(49 citation statements)

References 25 publications

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“…Better communication of how algal increases are linked to reef degradation may be key in garnering public support for efforts such as the removal of algae from reefs, the reduction in nutrient pollution helping to drive increases (Smith et al, 2008), or the protection of herbivorous fish that maintain low levels of algae and facilitate coral recovery (Bellwood et al, 2004;Jackson et al, 2014). Our results demonstrate that shifting baselines can impact WTP, and build on previous work showing the importance of accounting for perceptions and subjective status-quo beliefs when eliciting WTP for ecosystem restoration (Meyerhoff and Liebe, 2009;Domínguez-Torreiro and Soliño, 2011;Marsh et al, 2011;Kataria et al, 2012;Artell et al, 2013). These studies also provide evidence that loss aversion can influence WTP (Neuman and Neuman, 2007;Bateman et al, 2009;EspinosaGoded et al, 2010;Masiero and Hensher, 2010), which may also be a possible mechanism to help explain our results.…”

Section: Discussionsupporting

confidence: 86%

“…Our results provide empirical evidence that shifting baselines, or failure to perceive past change, affect support for conservation and complement work that shows that perceptions of the current environment or the "status-quo" impact WTP (Meyerhoff and Liebe, 2009;Domínguez-Torreiro and Soliño, 2011;Marsh et al, 2011;Kataria et al, 2012;Artell et al, 2013). Specifically, we find that those who perceive more change in coral reef ecosystems are willing to pay more to protect them.…”

Section: Discussionsupporting

confidence: 72%

“…Typically these studies focused on valuing an environmental good or policy directly. There is a growing literature in non-market valuation that has focused on subjective status-quo beliefs and how perceptions of environmental quality can impact WTP for environmental policies (Whitehead, 2006;Meyerhoff and Liebe, 2009;Domínguez-Torreiro and Soliño, 2011;Marsh et al, 2011;Kataria et al, 2012;Artell et al, 2013). While this approach has shown WTP to be a function of perception of current environmental status, it has not been used to directly test how perception of change over time, or baseline shifts, impacts WTP for conservation.…”

Section: Introductionmentioning

confidence: 99%

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Shifted Baselines Reduce Willingness to Pay for Conservation

McClenachan

Matsuura²,

Shah

et al. 2018

Front. Mar. Sci.

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A loss of memory of past environmental degradation has resulted in shifted baselines, which may result in conservation and restoration goals that are less ambitious than if stakeholders had a full knowledge of ecosystem potential. However, the link between perception of baseline states and support for conservation planning has not been tested empirically. Here, we investigate how perceptions of change in coral reef ecosystems affect stakeholders' willingness to pay (WTP) for the establishment of protected areas. Coral reefs are experiencing rapid, global change that is observable by the public, and therefore provide an ideal ecosystem to test links between beliefs about baseline states and willingness to support conservation. Our survey respondents perceived change to coral reef communities across six variables: coral abundance, fish abundance, fish diversity, fish size, sedimentation, and water pollution. Respondants who accurately perceived declines in reef health had significantly higher WTP for protected areas (US $256.80 vs. $102.50 per year), suggesting that shifted baselines may reduce engagement with conservation efforts. If WTP translates to engagement, this suggests that goals for restoration and recovery are likely to be more ambitious if the public is aware of long term change. Therefore, communicating the scope and depth of environmental problems is essential in engaging the public in conservation.

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Section: Discussionsupporting

confidence: 86%

Section: Discussionsupporting

confidence: 72%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Shifted Baselines Reduce Willingness to Pay for Conservation

McClenachan

Matsuura²,

Shah

et al. 2018

Front. Mar. Sci.

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“…First, most homeowners are likely to have incomplete information about levels of, and changes in, water pollution. The correlation between subjective perceptions of water quality and objective measures is imperfect [16,21,29,69,[72][73][74][75]. Many pollution impacts are imperceptible to homebuyers.…”

Section: Discussionmentioning

confidence: 99%

A Comprehensive Review of the Evidence of the Impact of Surface Water Quality on Property Values

Nicholls

Crompton

2018

Sustainability

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Abstract:The desirability of living on or close to water is reflected in sometimes substantial property price premiums. Water quality has an important influence on property prices, since it impacts a water body's appearance, capacity to support wildlife, and recreational potential. As water quality continues to be altered by human use and activity, and in light of new threats posed by projected climate and associated environmental change, understanding the impact of changing quality on property prices, and the associated property tax base, is paramount. This paper reviews the body of evidence on this topic to date. Of the 43 distinct studies represented in the 48 publications reviewed, the expected, statistically significant relationship between water quality and property price was demonstrated in at least one of the models developed in all but two studies. As a whole, they provide convincing evidence that clean water has a positive effect on property values.

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“…Marginal implicit prices can be interpreted as marginal willingness to pay for housing attributes from the perspective of the household. 1 As people frequently choose to live near a waterbody to enjoy the amenity values provided by it, studies have considered water quality levels in the context of the hedonic model, and related these to the willingness to pay for water quality attributes (Artell 2014;Artell et al 2013;Bin and Czajkowski 2013;Boyle et al 1999;Epp and Al-Ani 1979;Gibbs et al 2002;Krysel et al 2003;Leggett and Bockstael 2000;Michael et al 2000;Netusil et al 2014;Poor et al 2001Poor et al , 2007Steinnes 1992;Walsh et al 2011).…”

Section: Introductionmentioning

confidence: 99%

Housing Market Fluctuations and the Implicit Price of Water Quality: Empirical Evidence from a South Florida Housing Market

Bin

Czajkowski

Li³

et al. 2016

Environ Resource Econ

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In this study we utilize a hedonic property price analysis to examine changes in the implicit price of water quality given housing market fluctuations over time. We analyze Martin County, Florida waterfront home sales from 2001 to 2010 accounting for the associated significant real estate fluctuations in this area through flexible econometric controls in space and time. We apply a segmented regression methodology to identify housing market price instability over time, interact water quality with these identified market segmentations, and embed these interactions within a spatial fixed effect model to further account for any spatial heterogeneity in the waterfront market. Results indicate that water quality improvement is associated with higher property values. We find no evidence that the economic downturn O. Bin et al. crowded out concern for the water quality in this area. We further impute an implicit prices of $2614, evaluated at the sample mean, for 1 % point increase in the water quality grade.

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Subjective vs. objective measures in the valuation of water quality

Cited by 56 publications

References 25 publications

Shifted Baselines Reduce Willingness to Pay for Conservation

Shifted Baselines Reduce Willingness to Pay for Conservation

A Comprehensive Review of the Evidence of the Impact of Surface Water Quality on Property Values

Housing Market Fluctuations and the Implicit Price of Water Quality: Empirical Evidence from a South Florida Housing Market

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