Farmers’ and Consumers’ Preferences for Drinking Water Quality Improvement through Land Management Practices: The Case Study of the Soyang Watershed in South Korea

The drinking water quality along the Soyang watershed has been affected negatively by the intensive agricultural practices in the upstream area. Our study used a choice experiment method in order to estimate the values that the upstream water providers (i.e., farmers) and downstream water users (i.e., consumers) attach to the following attributes, namely, the agricultural profits, water quality, and biodiversity level of the Soyang watershed in South Korea. The preferences of the upstream water providers and downstream water users were presented by a conditional logit model and with interactions. The results from the conditional logit model specifications revealed that water quality is the most important attribute that is preferred by the downstream water users and upstream farmers. Both the upstream farmers and downstream water users have put substantial values on the protection of water bodies in the Soyang watershed, and are concerned about the consequences of water usage on the environment and human health. The respondents in each income group and in different local communities with income levels seemed to have different implicit costs for the water quality improvement in the Soyang watershed. Our study has provided robust results regarding the benefits of water improvement using sustainable land management and can be considered as a fundamental input for aiding the sustainable water–land nexus policies. We suggest that the government carefully designs a policy so as to compensate the highland farmers for their income losses as a result of the changing farming practices.