Alternative approach to combining revealed and stated preference data: evaluating water quality of a river system in Taipei

This paper combines data from a double-bounded referendum contingent valuation survey and a travel cost survey. Rather than linking the two data sets through a common utility function, as in Cameron (1992) and Niklitschek and Leon (1996), we link them through the expenditure difference function. By...

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Bibliographic Details
Published in:Environmental economics and policy studies 1999-06, Vol.2 (2), p.97-112
Main Authors: Shaw, Daigee, Chien, Yu-Lan, Lin, Yih-Ming
Format: Article
Language:English
Subjects:
Alternative approaches
Case studies
Contingent valuation
Data quality
Environmental economics
Environmental policy
Errors
Evaluation
Expenditures
Metropolitan areas
Nonuse
Polls & surveys
Referendums
Rivers
Surveys
Travel demand
Utility functions
Valuation
Water
Water quality
Welfare
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Summary:This paper combines data from a double-bounded referendum contingent valuation survey and a travel cost survey. Rather than linking the two data sets through a common utility function, as in Cameron (1992) and Niklitschek and Leon (1996), we link them through the expenditure difference function. By using the expenditure difference approach, the parameters and their standard errors for individual preferences can be easily extracted, and the trip demand function and exact welfare measure of quality improvements can be estimated. This approach is illustrated in a case study that evaluates the benefits resulting from water quality improvements in the Tamshui river system in the Taipei Metropolitan Area of Taiwan. The empirical estimation results show that the use value becomes much larger when the water quality improves to a higher level. In addition, the nonuse value makes up a large share of the total value of improving water quality; thus the nonuse value could be crucial for examining projects aimed at improving the water quality of the four rivers in the Tamshui river system.
ISSN:1432-847X
1867-383X
DOI:10.1007/BF03353905