Abstract:

This paper employed a choice model to estimate the nonmarket value of improvements in the water quality of the Dianchi lake.A choice experiment study was administered to 310 randomly selected Kunming households and the data were analyzed using multinomial logit model.The results reveal that the probability of respondents’ option for water quality improvement had significant positive correlations with household income,targeted water quality level,and a recognized value of ecological improvement,and had significant negative correlations with water surcharge,the case of whether there were children in the surveyed household,and the years that the corresponds had lived in the current houses.The average willingness to pay per household for the improvement of water quality from the status quo to Level IV and III were estimated to be 42 and 91 Yuan per month,or 504 and 1092 Yuan per year,respectively.The average annual values for the two improvements in water quality were 692 million and 1499 million,accounting for 011% and 023% of average annual household income,respectively.The results could provide information for economic feasibility study of water quality improvement projects and for making decision for ecological damage compensation.It reveals that discrete choice model is a good tool for estimating the nonmarket value of water quality improvement as it can model complex tradeoffs.Further study can be carried out to explore the effects and implicit values of attributes other than water quality and surcharge