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Open AccessArticle

Economic Valuation of the Aquatic Biodiversity Conservation in South Korea: Correcting for the Endogeneity Bias in Contingent Valuation

1
Bayreuth Center of Ecology and Environmental Research, University of Bayreuth, Bayreuth 95440, Germany
2
Environmental Policy Research Group, Korea Environment Institute, Sejong 30147, Korea
3
Department of Agricultural and Resource Economics, Kangwon National University, Chuncheon 24341, Korea
4
Institute for Environmental Economics and World Trade, University of Hannover, Hannover 30167, Germany
*
Author to whom correspondence should be addressed.
Academic Editors: Ebun Akinsete, Phoebe Koundouri and Marc A. Rosen
Sustainability 2017, 9(6), 930; https://doi.org/10.3390/su9060930
Received: 24 February 2017 / Revised: 23 May 2017 / Accepted: 30 May 2017 / Published: 2 June 2017
(This article belongs to the Special Issue Sustainable River Basin Management)
In this study, we use the Contingent Valuation (CV) method to estimate households’ willingness to pay (WTP) for the aquatic ecosystem health (biodiversity) improvement. This paper extends CV studies by dealing with the endogenous effect of a proxy variable, namely the subjective experience of negative environmental quality changes. The results show that the correction for the endogeneity bias facilitates the efficiency of parameter estimation in the empirical model. The mean WTP per household accounts for around 46.8% (KRW 79.6) of the current water use charge (KRW 170 per cubic meter). The total benefit from conserving the biodiversity is around KRW 198.62 billion. We found several factors that affect households’ WTP for fish biodiversity conservation, suggesting the importance of these factors in the formulation of water policies associated with aquatic biodiversity. In addition, the inefficient water management costs should be redistributed to other projects or new programs such as for the fish biodiversity conservation. View Full-Text
Keywords: contingent valuation method; willingness to pay; aquatic biodiversity; bivariate probit model; endogeneity bias; benefit calculation contingent valuation method; willingness to pay; aquatic biodiversity; bivariate probit model; endogeneity bias; benefit calculation
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Choi, I.-C.; Kim, H.N.; Shin, H.-J.; Tenhunen, J.; Nguyen, T.T. Economic Valuation of the Aquatic Biodiversity Conservation in South Korea: Correcting for the Endogeneity Bias in Contingent Valuation. Sustainability 2017, 9, 930.

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