Willingness to pay for a highland agricultural restriction policy to improve water quality in South Korea

Correcting anomalous preference in contingent valuation method

verfasst von

Ik Chang Choi, Hyun No Kim, Hio Jung Shin, John Tenhunen, Trung Thanh Nguyen

Abstract

This study examines the willingness to pay (WTP) for the highland agriculture restriction policy which aims to stabilize the water quality in the Han River basin, South Korea. To estimate the WTP, we use a double-bounded contingent valuation method and a random-effects interval-data regression. We extend contingent valuation studies by dealing with the potential preference anomalies (shift, anchoring, and inconsistent response effects). The result indicates that after the preference anomalies are corrected, the statistical precision of parameter estimates is improved. After correcting the potential preference anomalies, estimated welfare gains are on average South Korean currency (KRW) 2,861 per month per household. Based on the WTP estimate, the total benefits from the land use restriction policy are around KRW297.73 billion and the total costs are around KRW129.44 billion. The net benefit is, thus, around KRW168.29 billion. This study suggests several practical solutions that would be useful for the water management. First, a priority should be given to the valid compensation for the highland farmers' expected income loss. Second, it is necessary to increase in the unit cost of the highland purchase. Third, wasted or inefficiently used costs (e.g., overinvestment in waste treatment facilities, and temporary upstream community support) should be transferred to the program associated with high mountainous agriculture field purchase. Results of our analysis support South Korean legislators and land use policy makers with useful information for the approval and operationalization of the policy.

Organisationseinheit(en)

Institut für Umweltökonomik und Welthandel

Externe Organisation(en)

Universität Bayreuth
Korea Environment Institute (KEI)
Kangwon National University

Typ

Artikel

Journal

Water (Switzerland)

Band

8

ISSN

2073-4441

Publikationsdatum

23.11.2016

Publikationsstatus

Veröffentlicht

Peer-reviewed

Ja

ASJC Scopus Sachgebiete

Biochemie, Geografie, Planung und Entwicklung, Aquatische Wissenschaften, Gewässerkunde und -technologie

Ziele für nachhaltige Entwicklung

SDG 6 – Sauberes Wasser und sanitäre Einrichtungen, SDG 15 – Lebensraum Land

Elektronische Version(en)

https://doi.org/10.3390/w8110547 (Zugang: Offen)