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Valuing the Benefits of Coastal Water Quality Improvements using Contingent and Real Behaviour

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  • Nick Hanley
  • Begona Alvarez-Farizo

Abstract

Recent moves in the European Union have been made towards a toughening of legislation on bathing water quality. This has focussed policy-makers thoughts on the welfare benefits resulting from such improvements, especially given their cost. Our paper uses a combined stated and revealed preference approach to value coastal water quality improvements, focussing on an area of Scotland which has consistently failed to meet standards under the Bathing Waters Directive. We combine data on real behaviour with data on contingent behaviour using a random effects negative binomial panel model. This allows us to predict both the change in participation (trips) should water quality be improved, and the welfare increase per trip. Our model includes allowance for the existence of substitute sites, and for changes in recreational behaviour during a beach visit.

Suggested Citation

  • Nick Hanley & Begona Alvarez-Farizo, "undated". "Valuing the Benefits of Coastal Water Quality Improvements using Contingent and Real Behaviour," Working Papers 2002_9, Business School - Economics, University of Glasgow, revised Sep 2002.
    • Handle: RePEc:gla:glaewp:2002_9
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    References listed on IDEAS

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    1. Adamowicz, Wiktor & Swait, Joffre & Boxall, Peter & Louviere, Jordan & Williams, Michael, 1997. "Perceptions versus Objective Measures of Environmental Quality in Combined Revealed and Stated Preference Models of Environmental Valuation," Journal of Environmental Economics and Management, Elsevier, vol. 32(1), pages 65-84, January.
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    3. W. Douglass Shaw, 2002. "Testing the Validity of Contingent Behavior Trip Responses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(2), pages 401-414.
    4. S Georgiou & I H Langford & I J Bateman & R K Turner, 1998. "Determinants of Individuals' Willingness to Pay for Perceived Reductions in Environmental Health Risks: A Case Study of Bathing Water Quality," Environment and Planning A, , vol. 30(4), pages 577-594, April.
    5. W. Douglass Shaw & Peter Feather, 1999. "Possibilities for Including the Opportunity Cost of Time in Recreation Demand Systems," Land Economics, University of Wisconsin Press, vol. 75(4), pages 592-602.
    6. Englin, Jeffrey & Lambert, David & Shaw, W. Douglass, 1997. "A Structural Equations Approach to Modeling Consumptive Recreation Demand," Journal of Environmental Economics and Management, Elsevier, vol. 33(1), pages 33-43, May.
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    Keywords

    bathing water quality; contingent behaviour; combined stated-revealed preference models; panel data; sewage pollution;
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