As part of the Building with Nature programme, the willingness to pay (WTP) has been determined by means of CVM for the Eastern Scheldt sand deficit case (Ter Haar, 2011). The overall goal of the thesis was to obtain the average willingness to pay (WTP) of people for different strategies to cope with the effects of the sand deficit. Secondary goals were to find out if:
- the imitation of a market situation is an effective strategy;
- distance-decline in the willingness to pay can be abstracted;
- (cost-effective) internet survey yields to reliable results.
Introduction to the case
The construction of a storm surge barrier in the Eastern Scheldt estuary and auxiliary engineering as part of the Delta Works have led to a reduced tide, and consequently to erosion of the intertidal areas and infill of the channels. The Dutch government has come up with a solution for the loss of plates: nourishing the existing intertidal areas, but the amount of sand and the nourishing strategy remain to be chosen. Alternative nourishment scenarios have been used in the CVM-survey, where people are asked how much they are willing to pay for the alternatives to preserve nature in the Eastern Scheldt.
Imitation of a market situation
In general it is difficult to evaluate a certain ecosystem or project area in terms of nature value. For instance, it is difficult to attribute a value to the ecosystem of the Eastern Scheldt. It gets easier, however, if the threats are clarified to which the ecosystem is exposed, as well as the measures that need to be taken to prevent a certain loss of nature values. The costs of these measures can roughly be determined, to generate a market situation. In the case of the Eastern Scheldt, the ecologically and (indirectly) economically valuable intertidal area is at stake. With sand nourishment the intertidal areas are supposed to be saved. It is possible to ask for people’s willingness to pay (WTP) for different nourishment efforts (for instance protecting half of the intertidal area, or all of it). The following table shows the different nourishment efforts. These alternatives were presented to the respondents.
|Tidal flat area (m3)||3.000||3.800||8.300||11.000|
|Percentage of tidal flat area that is nourished||27%||35%||75%||100%|
|Costs per household||0 euro||1 euro||6 euro’s||9 euro’s|
Note that the costs of the alternatives are included in the scheme. These costs are not hypothetical, but based on a real cost-benefit analysis. The costs comprise the investment costs of the sand nourishment minus the benefits other than the bequest value of nature. The costs are divided by the total number of households in the Netherlands. The questionnaire was worked out in line with the NOAA guideline (see sheet ‘how to use’). In the questionnaire it was proposed that possibly not all respondents want to contribute and that people were able to contribute more than the presented price-tags. See ter Haar (2011) for more details about study and questionnaire.
The average WTP in this study was 6,4 euro per household. Alternative 3 seems to be the closest to the average WTP. The sample showed derogation in education level and income (members of the panel have relatively high education level, hence a higher than average income). This has an influence on the average WTP. When the average WTP is corrected for national education level distribution, the result is on average € 6,0 per household.
There are several indications that the strategy of imitating a market situation is effective. Reactions of respondents in testing the questionnaire as well as feedback in the field make clear that the concept is logical and that people are able to fill in the form. In the questionnaire an opportunity was given to contribute more than the presented costs per household. This was done to compensate for people who do not want to pay at all, or contribute only a small amount (possibly leading to underestimation of the overall willingness to pay). It turned out that this option was used quite a lot, so the risk of underestimation seems to be tackled by this approach.
The calculation of the bequest value of nature is done by the formula:
(# households) * ( WTP per household)
In most cases, research focuses on obtaining the price-tag (WTP/ household), thereby ignoring the first part of the formula (i.e. the number of households). This study was meant to find out if the willingness to pay for nature values in the Eastern Scheldt estuary is higher if people live closer by. Therefore respondents were selected at different distances to the Eastern Scheldt estuary (see table).
|Distance to the Eastern Scheldt estuary||0-10 km||20-30 km||50-60 km||100 km||300 km|
|Number of respondents||99||68||66||33||19|
|Average willingness to pay (in euro)||6.89||6.74||6.30||4.48||6.21|
The results in the table show that there is hardly any decline in the willingness to pay when people live further away from the Eastern Scheldt estuary. However, the number of respondents does decline at larger distances from the project area – although the effort in spreading of the questionnaire was equal. Perhaps only those people who are interested in nature do respond, which of course leads to higher price-tags. Comparison of the respondents at 300 km with a selection of respondents at 10 km (with the same profile in terms of age, income, membership of nature conservation organisations, etc) shows no difference in WTP. These are indications that the distance to the Eastern Scheldt estuary was not a significant factor of influence for the WTP. It seems logical to multiply the average WTP with the total number of households in the Netherlands. This is in line with common practice as the case in the Eastern Scheldt estuary is a high-exposure area of national concern (it is a national park, for instance). The question remains whether the total number of households can be used in projects of smaller scale and less national exposure. Previous studies (Ruijgrok & Vlaanderen, 2000) for small-scale projects on natural banks show a strong declining WTP after 10 km.
Use of online-surveys
This is one of the few studies in which such a survey has been done via the internet. The website ‘Thesis tools‘ was used here, which is specifically made for doing online surveys. A panel of respondents were paid for their efforts, as it has proven difficult to gather a group of voluntary respondents via the internet. The group consisted of 300 respondents. Face-to-face only people 0-10 km from the Eastern Scheldt were surveyed. In two days time, as many residents as possible have been surveyed (30 persons).
There was a very small difference in the average WTP derived from the internet and the face-to-face survey. The panel on the internet survey also showed derogation in income distribution from that holding for the whole of the Netherlands. The highest and lowest income classes were overrepresented. Also, the level of education distribution was different from that for all people in the Netherlands. For internet surveys in the future, it is important to try and make the panel representative of the Dutch population. Some groups that were underrepresented on the internet should be actively approached. The internet survey is much more time-efficient than the face-to-face survey. If further developed and applied, it can be a good method to determine the WTP in a cost- efficient manner.