Wiktor Budziński

Valuing the commons: An international study on the recreational benefits of the Baltic Sea

The Baltic Sea provides benefits to all of the nine nations along its coastline, with some 85 million people living within the catchment area. Achieving improvements in water quality requires international cooperation. The likelihood of effective cooperation is known to depend on the distribution across countries of the benefits and costs of actions needed to improve water quality. In this paper, we estimate the benefits associated with recreational use of the Baltic Sea in current environmental conditions using a travel cost approach, based on data from a large, standardized survey of households in each of the 9 Baltic Sea states. Both the probability of engaging in recreation (participation) and the number of visits people make are modeled. A large variation in the number of trips and the extent of participation is found, along with large differences in current annual economic benefits from Baltic Sea recreation. The total annual recreation benefits are close to 15 billion EUR. Under a water quality improvement scenario, the proportional increases in benefits range from 7 to 18% of the current annual benefits across countries. Depending on how the costs of actions are distributed, this could imply difficulties in achieving more international cooperation to achieve such improvements.

Using geographically weighted choice models to account for spatial heterogeneity of preferences

In this paper we investigate the prospects of using geographically weighted choice models for modelling of spatially clustered preferences. The data used in this study comes from a discrete choice experiment survey regarding public preferences for the implementation of a new country-wide forest management and protection program in Poland. We combine it with high-resolution geographical information system data related to local forest characteristics. Using locally estimated discrete choice models we obtain location-specific estimates of willingness to pay (WTP). Variation in these estimates is explained by the socio-demographic characteristics of respondents and characteristics of the forests in their place of residence. The results are compared with those obtained from a more typical, two stage procedure which uses Bayesian posterior means of the mixed logit model random parameters to calculate individual-specific estimates of WTP. The latter approach, although easier to implement and more common in the literature, does not explicitly assume any spatial relationship between individuals. In contrast, the geographically weighted approach differs in this aspect and can provide additional insight on spatial patterns of individuals’ preferences. Our study shows that although the geographically weighted discrete choice models have some advantages, it is not without drawbacks, such as the difficulty and subjectivity in choosing an appropriate bandwidth. We find a number of notable differences in WTP estimates and their spatial distributions. At the current level of development of the two techniques, we find mixed evidence on which approach gives the better results.