Another scope test on nonuse value of the Shimanto river, Japan

Abstract

In Japan, dramatic decrease in population and tax revenues of local areas have made the preservation of precious local environmental resources difficult. Although people who live in urban areas have a general consciousness toward preservation of such resources, the amount they are willing to pay and how this consciousness can be realized remain vague. The aims of this study are to estimate such willingness to pay (WTP), to consider the applicability of the contingent valuation method, and to suggest a funding scheme for conservation. Estimation is focused on the Shimanto river, famous as the last clear stream of Japan. Consideration includes a comparison of non-response rate between questionnaire formats and a test of scope insensitivity. Comparison between the private goods format and the referendum format is noteworthy because most Japanese do not have the experience of participating referendum voting on a specific issue. The test of scope insensitivity shows that mean WTP for water quality improvement of the entirety of the river is significantly larger than that of only part. However, weak sensitivity calls for careful benefit transfer. Finally, the paper examines the significance of WTP from a policy perspective. To actualize the will of residents of urban centers for conservation of local environmental assets, it is necessary to establish an institution that can collect the cost for conservation directly from beneficiaries.