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Nonmarket valuation of water quality in a rural transition economy in Turkey applying an a posteriori bid design

Tumay, A.B., Brouwer, R.
Water resources research 2007 v.43 no.5 pp. W05436 (13 p
water quality, wastewater treatment, watersheds, public opinion, public water supply, rural areas, transitional economic systems, consumer surveys, social benefit, perceptions (cognitive), simulation models, Monte Carlo method, willingness to pay, contingent valuation, consumer attitudes, Turkey (country)
In this paper, we investigate the economic benefits associated with public investments in wastewater treatment in one of the special protected areas along Turkey's touristic Mediterranean coast, the Koycegiz-Dalyan watershed. The benefits, measured in terms of boatable, fishable, swimmable and drinkable water quality, are estimated using a public survey format following the contingent valuation (CV) method. The study presented here is the first of its kind in Turkey. The study's main objective is to assess public perception, understanding, and valuation of improved wastewater treatment facilities in the two largest population centers in the watershed, facing the same water pollution problems as a result of lack of appropriate wastewater treatment. We test the validity and reliability of the application of the CV methodology to this specific environmental problem in a rural transition economy and evaluate the transferability of the results within the watershed. In order to facilitate willingness to pay (WTP) value elicitation we apply a novel dichotomous choice procedure where bid design takes place a posteriori instead of a priori. The statistical efficiency of different bid vectors is evaluated in terms of the estimated welfare measures' mean square errors using Monte Carlo simulation. The robustness of bid function specification is analyzed through average WTP and standard deviation estimated using parametric and nonparametric methods.