Revealed Preference and Effectiveness of Public Investment in Ecological River Restoration Projects: An Application of the Count Data Model

Yoon Lee, Hwansuk Kim and Yongsuk Hong
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Yoon Lee: Department of International Economics and Trade, Sunmoon University, Asan 31460, Korea
Hwansuk Kim: Program in Environmental Technology and Policy, Department of Environmental Engineering, Korea University, Sejong 30019, Korea
Yongsuk Hong: Program in Environmental Technology and Policy, Department of Environmental Engineering, Korea University, Sejong 30019, Korea

Sustainability, 2016, vol. 8, issue 4, 1-13

Abstract: Ecological river restoration projects aim to revitalize healthy and self-sustaining river systems that can provide irreplaceable benefits to human society. Cheonggyecheon and Anyangcheon are two sites of recent river restoration projects in Korea. To assess the economic value of two rivers, count data was collected to conduct the individual travel cost method (ITCM) in this study. Five statistical models such as the Poisson, the negative binomial, the zero-truncated Poisson, the negative binomial, and negative binomial model adjusted for both truncation and endogenous stratification were used in the analysis due to the nature of count data. Empirical results showed that regressors were statistically significant and corresponded to conventional consumer theory. Since collected count data indicated over-dispersion and endogenous stratification, the adjusted Negative Binomial was selected as an optimal model to analyze the recreational value of Cheonggyecheon and Anyangcheon. Estimates of the annual economic value of two river restoration projects were approximately US $170.1 million and US $50.5 million, respectively.

Keywords: consumer welfare; count data model; public investment; river restoration; travel cost method (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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