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Watershed Management Benefits in a Hypothetical, Real Intention and Real Willingness to Pay Approach

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Abstract

Despite growing knowledge of a disparity between stated and actual willingness to engage in pro-environmental behavior, little is known about the cognitive or attitudinal factors explaining the disparity. In the context of water quality improvement in a river basin, we address the disparity issue by applying two approaches: a typical valuation question with a hypothetical option of voluntary payment and a valuation question with a real option of voluntary payment. The latter treatment allows for further analysis of the respondents who committed to a real payment. We show empirical evidence on the psychological factors explaining the disparity between the treatments and its relationship with response uncertainty. The extent of learning from the survey about water management of the watershed increased the likelihood of stating the willingness to contribute, either with certainty or uncertainty. In turn, a previous contribution to the environmental issue, higher income, belief in the scenario, and responding to the hypothetical treatment increased the likelihood of stating certain willingness to contribute. Our findings indicate that the factors influencing the decision on the maximum payment differ between treatments. Cognitive factors, such as perceiving the valuation scenario as plausible, learning from the questionnaire, and in which mailing round the respondent completed the survey, only explained the stated amount for the willingness to pay in the treatment with a hypothetical option for voluntary payment. In the real option treatment, a higher stated willingness to pay was more likely if the respondent actually made the payment and had a higher household income.

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Notes

  1. With the objective to achieve a good ecological and chemical status to protect human health, the water supply, natural ecosystems, and biodiversity.

  2. Several studies have investigated donation payment mechanisms (see e.g. Brown et al. 1996; Byrnes et al. 1999; Duffield and Patterson 1992; Navrud 1992).

  3. See, for example, the opinion of the famous blue-ribbon panel - assembled by NOAA- who assessed the reliability of CV methods (Arrow et al. 1993).

  4. However, not every yes response revealed actual payment, and there were also actual payers among the “yes, possibly” responses.

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Author information

Author notes

  1. Elina Seppälä

    Present address: Northern Satakunta municipal federation for basic services and public utilities (PoSa), -38700, Kankaanpää, FI, Finland

Authors and Affiliations

  1. Finnish Environment Institute (SYKE), P.O. Box 140, -00251, Helsinki, FI, Finland

    Virpi Lehtoranta & Elina Seppälä

  2. Department of Economics and Management, University of Helsinki, P.O. Box 27, Latokartanonkaari 9, -00014, University of Helsinki, FI, Finland

    Anna-Kaisa Kosenius

Authors
  1. Virpi Lehtoranta
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  2. Anna-Kaisa Kosenius
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  3. Elina Seppälä
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Corresponding author

Correspondence to Virpi Lehtoranta.

Appendices

Appendix 1

Table 6 Valuation question in the two separate questions
Full size table

Appendix 2. Questionnaire to those who expressed willingness to pay, but who did not pay

  1. 1.

    I didn’t pay because

(Choose the most suitable alternative and mark it with 1, and the second best alternative with 2):

[] I changed my mind about paying.

[] I couldn’t afford to pay.

[] I forgot.

[] I wanted to consider the matter further.

[] I felt that I didn’t support this project enough to pay for it.

[] I preferred voluntary work to donation.

[] Some other reason, what? __________________________

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Lehtoranta, V., Kosenius, AK. & Seppälä, E. Watershed Management Benefits in a Hypothetical, Real Intention and Real Willingness to Pay Approach. Water Resour Manage 31, 4117–4132 (2017). https://doi.org/10.1007/s11269-017-1733-3

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