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Measuring the Economic Value of Sustainable River Basin Management: The Full-Preference Rank Method

Phoebe Koundouri (), Osiel González Dávila () and Theologos Pantelidis ()

No 1505, DEOS Working Papers from Athens University of Economics and Business

Abstract: This study exploits the data from a full-preference ranking Choice Experiment (CE) designed to investigate how respondents evaluate a set of proposed improvements in the Asopos water catchment in Greece. These improvements are following the prescriptions of the European Union Water Framework Directive (2000). We first estimate a rank-ordered logistic regression based on the full set of choices by respondents to calculate the willingness to pay (WTP) of respondents for each one of the three attributes considered in the CE (that is, environmental conditions, impact on the local economy and changes in the potential uses of water). The model is initially estimated for the full sample and then re-estimated twice for two sub-samples: the one includes only the residents of Athens and the other includes only the residents of Asopos. Afterwards, we examine the effect of various demographic and socio-economic factors (such as income, gender, age, employment and education) on the estimates of our model in an attempt to reveal any differences among respondents with different characteristics. Thus, our analysis simultaneously provides a robustness check on previous findings in the literature and additional information about how various demographic and socio-economic characteristics affect the evaluation of the selected attributes.

Keywords: Choice experiment, Full-preference ranking, Logistic regression, Asopos River Basin, Environmental degradation, Water quality and quantity; Random utility maximization; Logit probabilities; Water Framework Directive; Residency-specific use and non-use val (search for similar items in EconPapers)
JEL-codes: Q25 Q51 Q53 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-dcm, nep-env and nep-upt
Date: 2015-02-05
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