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Nonmarket valuation of water quality in a rural transition economy in Turkey applying an a posteriori bid design
Author(s) -
Bederli Tümay Aylin,
Brouwer Roy
Publication year - 2007
Publication title -
water resources research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.863
H-Index - 217
eISSN - 1944-7973
pISSN - 0043-1397
DOI - 10.1029/2006wr004869
Subject(s) - contingent valuation , willingness to pay , watershed , environmental economics , environmental science , econometrics , economics , statistics , mathematics , computer science , microeconomics , machine learning
In this paper, we investigate the economic benefits associated with public investments in wastewater treatment in one of the special protected areas along Turkey's touristic Mediterranean coast, the Köyceğiz‐Dalyan watershed. The benefits, measured in terms of boatable, fishable, swimmable and drinkable water quality, are estimated using a public survey format following the contingent valuation (CV) method. The study presented here is the first of its kind in Turkey. The study's main objective is to assess public perception, understanding, and valuation of improved wastewater treatment facilities in the two largest population centers in the watershed, facing the same water pollution problems as a result of lack of appropriate wastewater treatment. We test the validity and reliability of the application of the CV methodology to this specific environmental problem in a rural transition economy and evaluate the transferability of the results within the watershed. In order to facilitate willingness to pay (WTP) value elicitation we apply a novel dichotomous choice procedure where bid design takes place a posteriori instead of a priori. The statistical efficiency of different bid vectors is evaluated in terms of the estimated welfare measures' mean square errors using Monte Carlo simulation. The robustness of bid function specification is analyzed through average WTP and standard deviation estimated using parametric and nonparametric methods.