WILLINGNESS TO PAY FOR WATER QUALITY MAINTENANCE IN CHINESE RIVERS by

Industrial expansion around Beijing in China has resulted in the increasing pollution of surface waters. This paper reports on the application of a contingent valuation survey to determine the value to the Beijing population of maintaining river water quality in one or all the rivers in the region. The survey revealed that the values that the population have for clean river water include a considerable non-use element. The valuation question included a referendum question to determine whether respondents were willing to pay anything to maintain river water quality. Those expressing a positive willingness to pay (WTP), faced a double-bounded dichotomous choice valuation question. The data are analysed using a combined spike model and willingness to pay model, in which the most appropriate form for the underlying WTP distribution is determined using the Box-Cox transformation. The average annual household WTP to maintain water quality in all the rivers around Beijing is found to be significantly higher than for any individual river, showing that respondents are sensitive to the scale of the proposed water quality improvements.