Are Preferences for Environmental Quality Sensitive to Financial Funding Schemes? Evidence from a Marine Restoration Programme in the Black Sea

50 Pages Posted: 16 Jun 2011

See all articles by Kyriaki Remoundou

Kyriaki Remoundou

Newcastle University

Fikret Adaman

affiliation not provided to SSRN

Phoebe Koundouri

Athens University of Economics and Business - Department of International and European Economic Studies; University of Reading - Department of Economics

Paulo A. L. D. Nunes

University of Padova - Dipartimento Territorio e Sistemi Agro Forestali (TeSAF)

Date Written: June 15, 2011

Abstract

This paper uses a non-market valuation study to elicit consumers’ preferences for a marine restoration programme in the Black Sea aiming to reduce the level of public health risk from bathing and improve water quality and the overall level of marine biodiversity. In this context, we administer a stated choice experiment in coastal settlements in Ukraine and Turkey and employ two tax revenue reallocation schemes as payment vehicles. One proposes the financing of the marine restoration programme by the reduction of the public budget for renewable energy and the second by the reduction of the public budget on training for civil servants. We examine the stated preferences and the subsequently derived economic value estimates in the two treatments with the aim to investigate whether the trade-off implied by the funding scheme has implications for the valuation outcome. Results reveal that preferences and marginal rates of substitution between the non-price attributes under consideration differ significantly. In the civil servants’ budget reallocation scheme, the reallocation coefficient is positive, implying that ceteris paribus redistribution of public financial resources from this source is utility-enhancing. The magnitude of the results differs in the two considered countries mirroring their heterogeneity in political and cultural dimensions.

Keywords: non-market valuation, stated choice experiment, payment vehicle, tax revenues reallocation, marine resources, Black Sea, marine biodiversity, developing countries

JEL Classification: Q22, Q28

Suggested Citation

Remoundou, Kyriaki and Adaman, Fikret and Koundouri, Phoebe and Dias Nunes, Paulo Augusto, Are Preferences for Environmental Quality Sensitive to Financial Funding Schemes? Evidence from a Marine Restoration Programme in the Black Sea (June 15, 2011). FEEM Working Paper No. 38.2011, Available at SSRN: https://ssrn.com/abstract=1865255 or http://dx.doi.org/10.2139/ssrn.1865255

Kyriaki Remoundou

Newcastle University ( email )

Newcastle upon Tyne
United Kingdom

Fikret Adaman

affiliation not provided to SSRN ( email )

Phoebe Koundouri

Athens University of Economics and Business - Department of International and European Economic Studies ( email )

GR-10434 Athens
Greece
+0030 210 8203147 (Phone)
+0030 210 8214122 (Fax)

HOME PAGE: http://www.econ.ucl.ac.uk/downloads/koundouri/cv.pdf

University of Reading - Department of Economics ( email )

Reading, RG6 6AA
United Kingdom
+44 - (0)118 - 9875123 (Phone)
+44 - (0)118 - 9750236 (Fax)

HOME PAGE: http://www.rdg.ac.uk/economics/koundouri.html

Paulo Augusto Dias Nunes (Contact Author)

University of Padova - Dipartimento Territorio e Sistemi Agro Forestali (TeSAF) ( email )

Legnaro, Padova 35020
Italy

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