Exploring Heterogeneous Preference for Farmland Non-market Values in Wuhan, Central China

Xin Yang, Michael Burton, Yinying Cai, Anlu Zhang
2015 Sustainability  
The research question for this study is estimating the public's willingness to pay for the public goods generated by farmland, and exploring respondents' heterogeneity in their preferences for these goods. The approach used is a choice experiment, using respondents from the city of Wuhan, China. Six attributes representing public good values (farmland area, farmland fertility, water quality, air quality, species richness, and recreational value) and the level of private cost are selected in
more » ... are selected in this study. A heteroscedastic conditional logit model is used to analyze the respondents' willingness to pay for improvements in these public goods, accounting for systematic heterogeneity in public preferences. The results show the public are willing to pay to preserve the non-market values generated by farmland, with air quality valued most and followed by farmland fertility, farmland area, water quality, species richness and recreational value. In addition, respondents with higher income, and who are aware of the non-market values of farmland and have a willingness to pay for it have a smaller error variance, i.e., these respondents are more consistent in their choices. This study may help decision makers improving more differentiated farmland protection policies. The paper is organized as follows. Section 2 describes the literature review on farmland non-market value. Section 3 introduces the study area, choice model design, and data collection. Results of a heteroscedastic conditional logit model are presented in Section 4. Section 5 illustrates how the results can be used to estimate the partworths of each attribute, and comparisons are made within or across the attributes. Section 6 reports the policy implications for farmland management and the conclusion of this study. Literature Review on Farmland Non-Market Values Farmland is a valuable non-renewable natural resource that serves important economic and environmental functions [9] [10] [11] . The values of these functions are difficult to quantify in monetary terms and often enjoyed by people in the form of quasi-public goods. Thus, estimating the public's willingness to pay for the public goods generated by farmland and exploring respondents' heterogeneity in their preferences for these non-market values have been an area of increased research by economists and policymakers. The two main stated preference techniques that are suitable for non-market value estimation are contingent valuation and choice modeling. The contingent valuation method (CVM) was the most widely used model for estimating non-market values before the establishment of choice modeling. Bishop and Heberle [12] proposed that one could construct a hypothetical market and observe individuals' maximum willingness to pay for an option, or instead stay with the current level of non-market goods or services. It soon become popular in many fields for its simplicity and clarity in producing a single estimate of the values of non-market goods or services, such as rural landscape, recreational activities, wildlife habitat and water improvement [9, [13] [14] [15] [16] [17] [18] [19] . However, specific attributes of farmlands non-market value cannot be quantified by CVM, which makes policymakers cautious about using this method [20, 21] . This problem has been resolved by the development of choice modeling (CM). It is a stated preference technique that has some similarities to the CVM but has some notable improvements. Respondents are asked to make a series of choices between several different goods that are defined using a common set of attributes, and the value of specific attributes becomes possible. Originating in transportation research in 1983 [22] , choice modeling has frequently been used to estimate non-use values in various fields during the past 20 years [23] [24] [25] [26] [27] [28] . It has also been used to estimate non-market values of agricultural land or farmland [23, [29] [30] [31] [32] . However, limitations still exist: the heterogeneity in respondents' preference for farmland non-market values is often neglected. In most applications of the conditional/multinomial logit model, the error term is assumed to be homoscedastic [33] . To our knowledge, the existing Chinese studies that have explored the heterogeneity in respondents preference for farmland non-market values are still not sufficient. The aim of this paper is to assess citizens' willingness to pay for various attributes of farmland non-market values (farmland area, farmland fertility, water quality, air quality, species richness, recreational value) by employing the choice modeling framework. Respondents' socio-demographic characteristics, as well as attitudes are used to account for the heterogeneity across their preferences through a heteroscedastic conditional logit model.
doi:10.3390/su8010012 fatcat:5z3exkwdjndpbndbwpff32npiu