Lincoln University >
Research Archive >
Research Centres and Units >
Agribusiness and Economics Research Unit (AERU) >
AERU Research Report series >
Cite or link to this item using this URL:
|Title: ||Contingent valuation of improved water quality in the lower Waimakariri River|
|Author: ||Sheppard, R. L.|
Kerr, Geoffrey N.
|Date: ||Dec-1993 |
|Publisher: ||Lincoln University (Canterbury, N.Z.). Agribusiness and Economics Research Unit.|
|Series/Report no.: ||Research report (Lincoln University (Canterbury, N.Z.). Agribusiness and Economics Research Unit) ; no. 221|
|Item Type: ||Monograph|
|Abstract: ||The Agribusiness and Economics Research Unit (AERU), in association with the Agricultural
Engineering Institute (AEI) and the Centre for Resource Management (CRM), all at Lincoln
University, carried out, on behalf of the Canterbury Regional Council, an analysis of the costs and
benefits associated with improving the water quality in the Lower Waimakariri River. The costs
of achieving a specified water standard were assessed by the AEI through consultation with various
dischargers to the river and design and estimation of the processes and associated costs needed to
reach the discharge standard set. The present value of these costs was estimated as between $10.1
million and $17.2 million (10 year period) depending upon the final interpretation of the water
quality standard requirements.
The benefits associated with a water quality improvement were assessed through a Contingent
Valuation Method using a Willingness to Pay process. A sample of 2,628 Canterbury residents
were sent a mail questionnaire which sought information on their present use of the Lower
Waimakariri River, use of alternatives and Willingness to Pay (via rates) for a specified
improvement of the water quality. A response rate of 44.2 per cent (1161 responses) was achieved.
In addition a sample of 512 respondents from a predefined "User" group was sent questionnaires
from which a response rate of 63.7 per cent (326 respondents) was achieved. A non respondent
telephone survey of 400 from the original sample was also undertaken. Responses were received
from 320 people, a response rate of 80 per cent.
The results indicate that a high proportion of Canterbury residents (nearly 40 per cent) had visited
the Lower Waimakariri River over the preceding two years. Of those who hadn't visited, most
were not inclined to visit for a variety of reasons, while approximately 10 per cent cited pollution
as their reason for not visiting. The major activities undertaken were walking, picnicking and
Respondents cited "Increased Health Risk", "Murkiness" and "Smell" as the main effects of
pollution and up to 30 per cent of respondents indicted that these factors influenced their decision
with respect to visiting the Lower Waimakariri River.
Depending on the activity, up to 40 per cent of respondents indicated they would increase their level
of use if the water quality was improved.
Respondents were asked to indicate their Willingness to Pay (WTP) for an improvement in Lower
Waimakariri River water quality to the point where the water was safe for swimming. The results
indicate a mean WTP of about $102 per respondent household with a range of $72 to $153
representing the 95 per cent confidence interval. Given the number of households in the survey
area, this represents a potential present value of benefits of $94.4 million (eight per cent discount
rate over 10 years). This clearly exceeds the present value of water quality improvement costs of
up to $17.2 million. Analysis of the "User" survey results and the "Non Respondent" survey
results confirm the robustness of the general population survey results with any adjustments to the
mean Willingness to Pay being within the standard error of the original estimate.
It is concluded that the research indicates that the benefits associated with an improvement in Lower
Waimakariri River water quality exceed the cost of achieving such an improvement and therefore
the improvement should be sought by policy makers and resource managers. No assessment of an
equitable method of distribution of the cost of achieving the improvement has been attempted.|
|Persistent URL (URI): ||http://hdl.handle.net/10182/619|
|Appears in Collections:||AERU Research Report series|
Copyright in individual works within the Research Archive belongs to their authors and/or publishers. You may make a print or digital copy of a work for your personal non-commercial use. Unless otherwise indicated, all other rights are reserved, except for other user rights granted by the copyright laws of your country.
If you believe that copyright is being infringed by material available in this archive, contact us and we will investigate.