PhD defence: The Economic Value of Changes in Water Quality - Exploring Heterogeneity in Public Preferences in Stated Preference Studies
Water quality is from both a European and Danish perspective challenged by private use of the resource. The public good characteristics of the resource require that regulation should internalize the non-market values of water quality, in order to reach an optimal level from a welfare economic perspective. Valuation using stated preference techniques to value changes in ecosystem services has been widely used to estimate values of water quality. However, heterogeneity in values exists across different groups in the population. The objective of this PhD-thesis is to explore two different kinds of preference heterogeneity, when valuing changes in water quality. The PhD thesis consists of four papers all related to heterogeneity in the public preferences for water quality improvements.
Papers referred to as 1, 2 and 3 are based on a discrete choice experiment (DCE) on water quality improvements in Danish coastal waters. Paper 1, conducts the first empirical investigation of ecological endpoint heterogeneity in stated preference welfare studies, and finds that generic descriptions of water quality improvements might be insufficient to secure the validity of welfare economic estimates for policy analyses.
In Paper 2 a structured approach is developed to identify potential heterogeneities in the welfare generating endpoints of water quality improvements during focus group interviews.
Paper 3 explores how the effect of nature experiences during childhood could be included in economic models of environmental choices to explain preference heterogeneity conditioning on the context in which individuals develop. In Paper 4, an analysis based on data from the European Commission is used to explain spatial differences in the public attitudes to include environmental and resource costs in the price of water across European regions. Furthermore, the effects of information level and equity concerns are estimated across the population.
Overall, this thesis suggests that efficiency and validity of economic valuation studies would benefit from a broadening of the heterogeneity concept, to include heterogeneity in welfare generating endpoints from biophysical changes as well as heterogeneity driven by factors influencing individual development of preferences.
Brian H. Jacobsen, Senior researcher, Department of Food and Resource Economics, University of Copenhagen, Denmark
Søren Bøye Olsen, Associate professor, Department of Food and Resource Economics, University of Copenhagen, Denmark
Jette Bredahl Jacobsen, Professor, Department of Food and Resource Economics, University of Copenhagen, Denmark
Jürgen Meyerhoff, Associated professor, Technische Universität Berlin, Germany
Nicholas D. Hanley, Professor, University of St. Andrews, Scotland
If you are interested in a full copy of the thesis, you can contact the PhD student or one of the supervisors.