Aggregating the benefits of environmental improvements: distance-decay functions for use and non-use values.
One of the main problems in using environmental cost-benefit analysis is deciding on the relevant population: whose benefits should we count? This is important since aggregate benefits depend on both per-person benefit and the number of beneficiaries. Yet this latter term is often hard to evaluate. Distance-decay functions are one way of addressing this problem. In this paper, we present estimates of distance-decay functions for a particular environmental improvement, namely a reduction in low flow problems on the River Mimram in Southern England. We do this both for users and non-users, in the context of a contingent valuation study of the benefits of improving low flow conditions. We test whether distance-decay effects for mean Willingness to Pay are stronger for a single environmental good (the River Mimram, in this case) than for a more inclusive set (here, all rivers in Thames region which suffer from low flow problems). Finally, we explore the impact on part-whole bias, in terms of the relationship between WTP for an individual site and WTP for a more inclusive group of sites, of allowing for distance-decay effects.
Hanley
Nick
N
Department of Economics, University of Glasgow, Adam Smith Building, G12 8RT, Scotland, Glasgow, UK. n.d hanley@socsci.gla.ac.uk
Schläpfer
Felix
F
Spurgeon
James
J
D001290:Attitude; D003256:Community Participation; D003247:Conservation of Natural Resources / Q000191:economics* / Q000379:methods; D003362:Cost-Benefit Analysis / Q000379:methods*; D017753:Ecosystem; D004739:England; D005382:Financing, Personal; D005843:Geography; D006801:Humans; D017059:Models, Econometric; D045483:Rivers; D011795:Surveys and Questionnaires; D013660:Taxes; D014872:Water Movements