Spatial preference heterogeneity for integrated river basin management: The case of the Shiyang river basin, China

Abstract

Integrated river basin management (IRBM) programs have been launched in most parts of China to ease escalating environmental degradation. Meanwhile, little is known about the benefits from and the support for these programs. This paper presents a case study of the preference heterogeneity for IRBM in the Shiyang River Basin, China, as measured by the Willingness to Pay (WTP), for a set of major restoration attributes. A discrete choice analysis of relevant restoration attributes was conducted. The results based on a sample of 1012 households in the whole basin show that, on average, there is significant support for integrated ecological restoration as indicated by significant WTP for all ecological attributes. However, residential location induced preference heterogeneities are prevalent. Generally, compared to upper-basin residents, middle sub-basin residents have lower mean WTP while lower sub-basin residents express higher mean WTP. The disparity in utility is partially explained by the difference in ecological and socio-economic status of the residents. In conclusion, estimating welfare benefit of IRBM projects based on sample responses from a specific sub-section of the basin only may either understate or overstate the welfare estimate.