Does Omitting Downstream Water Quality Change the Economic Benefits of Nutrient Reduction? Evidence from a Discrete Choice Experiment

Yau-Huo Shr and Wendong Zhang ()

Center for Agricultural and Rural Development (CARD) Publications from Center for Agricultural and Rural Development (CARD) at Iowa State University

Abstract: Discrete choice experiments have been extensively used to value environmental quality; however, some important attributes may often be omitted due to design challenges. In the case of agricultural water pollution, omitting downstream water quality benefits could lead to biased estimates and misinterpretations of local water quality attributes presented in choice experiments. Using a split-sample design and a statewide survey of Iowa residents, we provide the first systematic evaluation of how households' willingness-to-pay for water quality improvement when downstream water quality benefits, hypoxic zone reduction in our case, are omitted. We find that omitting non-local water quality attributes significantly reduces the total economic value of nutrient reduction programs but does not bias the marginal willingness-to-pay for local water quality attributes. We also find suggestive evidence showing that such omission, in line with the theoretical prediction, only changes the preferences of respondents who are aware of the downstream impacts of plans that led to local water quality improvement. In addition, our results show that providing information on the non-local water quality benefits of nutrient reduction increases support for water quality improvement plans but only among local residents who are less informed on water quality issues.

Date: 2021-08
New Economics Papers: this item is included in nep-agr, nep-dcm, nep-env, nep-exp and nep-isf
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.card.iastate.edu/products/publications/pdf/21wp620.pdf Full Text (application/pdf)
https://www.card.iastate.edu/products/publications/synopsis/?p=1329 Online Synopsis (text/html)

Related works:
Working Paper: Does Omitting Downstream Water Quality Change the Economic Benefits of Nutrient Reduction? Evidence from a Discrete Choice Experiment (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ias:cpaper:21-wp620

Access Statistics for this paper

More papers in Center for Agricultural and Rural Development (CARD) Publications from Center for Agricultural and Rural Development (CARD) at Iowa State University Contact information at EDIRC.
Bibliographic data for series maintained by ().