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Is the valuation of water quality sensitive to external shocks? Evidence from political instability in Croatia

Author

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  • Kountouris, Yiannis
  • Nakic, Zoran
  • Sauer, Johannes

Abstract

This paper examines the short run sensitivity of willingness to pay (WTP) estimates for groundwater quality and quantity in the presence of external shocks, using data from two choice experiments implemented in Zagreb, Croatia. To assess the sensitivity of WTP estimates we take advantage of a sudden deterioration in political stability, expressed by a series of public protests that took place in the city during the data collection and compare mean WTP estimates before and during the protests. We find that mean WTP for groundwater quality and quantity is sensitive to the occurrence of the protest. The result indicates that events unrelated to environmental quality and especially political instability can influence the valuation of environmental goods. We interpret the result as an indication that the choice experiment method is sensitive enough to capture changes in WTP that are a result of sudden changes in the state of the world.

Suggested Citation

  • Kountouris, Yiannis & Nakic, Zoran & Sauer, Johannes, 2012. "Is the valuation of water quality sensitive to external shocks? Evidence from political instability in Croatia," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124705, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea12:124705
    DOI: 10.22004/ag.econ.124705
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    Cited by:

    1. Manuel Pulido-Velazquez & Johannes Sauer & Phoebe Koundouri & Andrew Allan & Bjorn Klove, 2013. "The EU FP7 GENESIS project on groundwater systems. Contributions to the analysis of economic, legal and institutional issues of groundwater management with selected case studies," DEOS Working Papers 1320, Athens University of Economics and Business.
    2. J. Price & D. Dupont & W. Adamowicz, 2017. "As Time Goes By: Examination of Temporal Stability Across Stated Preference Question Formats," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(3), pages 643-662, November.
    3. Galina Williams, 2022. "Temporal stability of WTP estimates in labeled and unlabeled choice experiment for emissions reduction options, Queensland, Australia," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 24(4), pages 533-550, October.
    4. Jie He & Bing Zhang, 2021. "Current Air Pollution and Willingness to Pay for Better Air Quality: Revisiting the Temporal Reliability of the Contingent Valuation Method," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 79(1), pages 135-168, May.

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