title: Risk aversion and willingness to pay for water quality: The case of non-farm rural residents.
abstract: Stated choice experiments are used to investigate the economic valuation of rural residents living in the province of Quebec for water quality improvements. In Quebec, rural residents played an important role in the setting of stricter environmental regulations. Unlike most stated choice experiments about the valuation of improvements in water quality, this study explicitly accounts for risk in the design and analysis of choice experiments. Risk in phosphorus and coliform reductions is introduced through a three-point uniform distribution in the choice sets. The results show greater support for constant absolute risk aversion preferences than for constant relative risk aversion. Rural residents value coliform and phosphorus reductions and the more educated ones are particularly willing to see the government tax farmers and taxpayers to secure such reductions. As the science improves and risk in water quality outcomes decrease and as the political weight of non-farm rural residents increase, it should be easier for governments to replace voluntary cost-share programs by polluter-payer programs.
authors.affiliation: Center for Research on the Economics of the Environment, Agri-food, Transports and Energy (CREATE), University Laval, 2425 de l'Agriculture St., Québec, QC G1V0A6, Canada. Electronic address: bruno.larue@eac.ulaval.ca.
authors.forename: Bruno
authors.initials: B
authors.lastname: Larue
authors.affiliation: Center for Research on the Economics of the Environment, Agri-food, Transports and Energy (CREATE), University Laval, 2425 de l'Agriculture St., Québec, QC G1V0A6, Canada. Electronic address: gale.west@eac.ulaval.ca.
authors.forename: Gale E
authors.initials: GE
authors.lastname: West
authors.affiliation: International Crops Research Institute for the Semi-Arid Tropics, Bamako, Mali. Electronic address: alphonse.singbo@gmail.com.
authors.forename: Alphonse
authors.initials: A
authors.lastname: Singbo
authors.affiliation: Center for Research on the Economics of the Environment, Agri-food, Transports and Energy (CREATE), University Laval, 2425 de l'Agriculture St., Québec, QC G1V0A6, Canada. Electronic address: Lota.tamini@eac.ulaval.ca.
authors.forename: Lota Dabio
authors.initials: LD
authors.lastname: Tamini
mesh_terms: D002755:Choice Behavior; D006801:Humans; D011792:Quebec; D012306:Risk; D012424:Rural Population; D060753:Water Quality
keywords: Risk aversion; Rural residents; Water quality; Willingness-to-pay