TY - JOUR

T1 - Economic Valuation of the Aquatic Biodiversity Conservation in South Korea: Correcting for the Endogeneity Bias in Contingent Valuation

AU - Choi, Ik Chang

AU - Kim, Hyun No

AU - Shin, Hio Jung

AU - Tenhunen, John

AU - Nguyen, Trung Thanh

N1 - Publisher Copyright: © 2017 by the authors. Copyright: Copyright 2017 Elsevier B.V., All rights reserved.

PY - 2017/6/2

Y1 - 2017/6/2

N2 - In this study, we use the Contingent Valuation (CV) method to estimate households' willingness to pay (WTP) for the aquatic ecosystem health (biodiversity) improvement. This paper extends CV studies by dealing with the endogenous effect of a proxy variable, namely the subjective experience of negative environmental quality changes. The results show that the correction for the endogeneity bias facilitates the efficiency of parameter estimation in the empirical model. The mean WTP per household accounts for around 46.8% (KRW 79.6) of the current water use charge (KRW 170 per cubic meter). The total benefit from conserving the biodiversity is around KRW 198.62 billion. We found several factors that affect households' WTP for fish biodiversity conservation, suggesting the importance of these factors in the formulation of water policies associated with aquatic biodiversity. In addition, the inefficient water management costs should be redistributed to other projects or new programs such as for the fish biodiversity conservation.

AB - In this study, we use the Contingent Valuation (CV) method to estimate households' willingness to pay (WTP) for the aquatic ecosystem health (biodiversity) improvement. This paper extends CV studies by dealing with the endogenous effect of a proxy variable, namely the subjective experience of negative environmental quality changes. The results show that the correction for the endogeneity bias facilitates the efficiency of parameter estimation in the empirical model. The mean WTP per household accounts for around 46.8% (KRW 79.6) of the current water use charge (KRW 170 per cubic meter). The total benefit from conserving the biodiversity is around KRW 198.62 billion. We found several factors that affect households' WTP for fish biodiversity conservation, suggesting the importance of these factors in the formulation of water policies associated with aquatic biodiversity. In addition, the inefficient water management costs should be redistributed to other projects or new programs such as for the fish biodiversity conservation.

KW - Aquatic biodiversity

KW - Benefit calculation

KW - Bivariate probit model

KW - Contingent valuation method

KW - Endogeneity bias

KW - Willingness to pay

UR - http://www.scopus.com/inward/record.url?scp=85020304241&partnerID=8YFLogxK

U2 - 10.3390/su9060930

DO - 10.3390/su9060930

M3 - Article

AN - SCOPUS:85020304241

VL - 9

JO - Sustainability (Switzerland)

JF - Sustainability (Switzerland)

SN - 2071-1050

IS - 6

M1 - 930

ER -