Willingness to pay for water level regulation in Lake Pielinen, Finland

Virpi Lehtoranta, Elina Seppälä and Anna-Kaisa Kosenius

Journal of Environmental Economics and Policy, 2013, vol. 2, issue 2, 148-163

Abstract: Water environments provide many benefits for humans. In Finland, thousands of inland lakes serve a very rich and important environment for many activities and a number of ecosystem services. These services can be threatened due to other human activities but also for natural reasons. The natural fluctuation of water level in Lake Pielinen, the largest non-regulated lake in Finland, damages occupational, recreational and housing possibilities. This paper focuses on the examination of the local households' attitudes, opinions and willingness to pay (WTP) for water level regulation at optimum level for recreational purposes in the summertime. The related economic benefits are analysed by applying the contingent valuation (CV) method. The logistic regression model and a variant of the Tobit model are used in the econometric analyses. The results show that WTP increases with higher income, youth, living near the shore, having a boat, being aware of the regulation plans and having no difficulties with the questions. The aggregate WTP of the local population is approximately EUR 0.24-0.44 million. The attitudinal results reveal a strong local interest in the regulation of Lake Pielinen.

Date: 2013
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DOI: 10.1080/21606544.2013.764615

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