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Presentation
Does Omitting Downstream Water Quality Change the Economic Benefits of Nutrient Reduction? Evidence from a Discrete Choice Experiment
Economics Presentations, Posters and Proceedings
  • Yau-Huo (Jimmy) Shr, National Taiwan University
  • Wendong Zhang, Iowa State University
Document Type
Presentation
Conference
2021 Agricultural & Applied Economics Association Annual Meeting
Publication Version
Published Version
Publication Date
1-1-2021
Conference Title
2021 Agricultural & Applied Economics Association Annual Meeting
Conference Date
August 1-3, 2021
Geolocation
(30.267153, -97.7430608)
Abstract

Discrete choice experiments have been extensively used to value environmental quality; however, some important attributes may be often omitted due to design challenges. In the case of agricultural water pollution, overlooking downstream water quality benefits could lead to biased estimates and misinterpretations of local water quality attributes presented in the 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 change 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 local water quality improvement plans. In addition, our results show that providing information on the non-local water quality benefits of nutrient reduction makes respondents less informed about the water quality issues more likely to support the water quality improvement plans.

Comments

This is a Selected Paper prepared for presentation at the 2021 Agricultural & Applied Economics Association Annual Meeting, Austin, TX, August 1 – August 3.

Rights
Copyright 2021 by Yau-Huo (Jimmy) Shr and Wendong Zhang. All rights reserved. Readers may make verbatim copies of this document for non-commercial purposes by any means, provided that this copyright notice appears on all such copies
Copyright Owner
Yau-Huo (Jimmy) Shr and Wendong Zhang
Language
en
File Format
application/pdf
Citation Information
Yau-Huo (Jimmy) Shr and Wendong Zhang. "Does Omitting Downstream Water Quality Change the Economic Benefits of Nutrient Reduction? Evidence from a Discrete Choice Experiment" Austin, Texas(2021)
Available at: http://works.bepress.com/wendong_zhang/122/