Water Resources Management and Wetland Conservation: The Case of Akrotiri Wetland in Cyprus

Abstract

This chapter presents the results of a contingent valuation study, which was carried out to estimate the socio-economic value of one of the most important wetlands in Cyprus, namely the Akrotiri wetland. Resulting policy implications for effective, efficient and sustainable management of this wetland, according to the requirements of the WFD and other EU Directives, are spelled out.

An erratum to this chapter is available at 10.1007/978-90-481-9825-2_12

Appendices

Annex I: Technical Notes on the CVM

The CVM was first proposed by Ciriacy-Wantrup (1947) and came into prominence in the early 1990s due to the Exxon Valdez oil spill in Alaska in 1989 and the subsequent lawsuits. With regard to wetland applications, CVM is useful for examining direct use values such as recreational fishing and hunting, and indirect use values such as improved water quality. CVM can also measure the option use values of wetlands associated with biodiversity, as well as the non-use values. Despite the strengths of CVM regarding its ability to estimate non-use values and evaluate irreversible changes, this method has been criticized for its lack of validity and reliability (Kahneman and Knetsch 1992; Diamond and Hausman 1994). This is on account of potential problems including information bias, design bias (starting point bias and vehicle bias), hypothetical bias, yea-saying bias, strategic bias (free-riding), substitute sites and embedding effects. Starting point bias usually arises in bidding games and suggests that the WTP bid is anchored on the first suggested bid price.

• 1. Interviewing bias indicates that the attitude of the surveyor can influence the values given by respondents.

• 2. Non-response bias may arise if those that refuse to answer the survey are not a random part of the population but those with a particular attitude (e.g. strongly against the proposed project).

• 3. Strategic bias occurs when respondents deliberately under- or overstate their WTP. Respondents may understate their WTP if they believe that the actual fees they will pay for provision of the environmental resources will be influenced by their response to the CV question. Conversely, realizing that payments expressed in a CV exercise are purely hypothetical, respondents may overstate their true WTP in the hope that this may increase the likelihood of a policy being accepted.

• 4. Yea-saying bias indicates that respondents may express a positive WTP because they feel good about the act of giving for a social good although they believe that the good itself is unimportant.

• 5. Insensitivity to scope or embedding bias implies that WTP is not affected by the scale of the good being offered. If people are first asked for their WTP for one part of an environmental resource and then asked to value the whole resource the amounts stated may be similar.

• 6. Payment vehicle bias indicates that respondents may state different WTP amounts, depending on the specific payment vehicle chosen. Payment vehicles such as a contribution or donation, may lead people to answer in terms of how much they think their fair share contribution is, rather than expressing their actual value for the good.

Information bias contends that the WTP that an individual expresses in response to a CV question is not a reflection of preferences they held previously but are ­constructed in the interview procedure. Hypothetical bias contends that respondents may be prepared to reveal their true values without strategic bias but are not capable of knowing these values without participating in a market in the first place (Bateman et al. 2003).

To address these, the Blue Ribbon Panel under the auspices of NOAA (Arrow et al. 1993) have made recommendations regarding best practice guidelines for the design and implementation of contingent valuation studies.

The earliest CV application on wetlands is a 1969 estimation of consumer ­surplus for wildlife hunting in the wetlands of the US Pacific western flyway (Hammack and Brown 1974). Since then several CV studies were carried out to estimate the use and non-use values of wetlands around the world. Pate and Loomis (1997), for example, find that WTP for a wetland improvement program in California, US, is about US$215(€178.5) per household and that this value decreases as the distance from the site increases. Oglethorpe and Miladou (2000) find that mean per capita WTP per year for use and non-use values of Lake Kerkini in Greece is £15.24(€22.1). Brouwer et al. (2003) carry out a meta-analysis² of 30 CV studies on wetlands and find that use values (such as flood control, water ­generation and water quality attributes) have a stronger influence on WTP than non-use elements such as the biodiversity function of wetlands. They estimate the mean value of wetlands to be 62SDR (special drawing rights) (€74) with a median of 34SDR (€40) per household per annum.

Annex II: Technical Notes on the CV Survey on the Akrotiri Wetland

The valuation questions consisted of two parts: first the respondents were asked whether or not in principle they would be WTP some amount of money for moving from scenario A to scenario B (or C). In the case where the respondents stated that they were willing to participate, they were asked for their maximum WTP. The WTP was elicited by using a payment card with amounts ranging from CYP0.5(€0.88) to over CYP100(€175). Before stating their WTP, the respondents were reminded of their income, expenses and other payments they make for environmental goods and services.

Debriefing questions were asked, in order to identify between protest responses and true zero values for non-participants. These questions also enabled investigation of which components of value and motivations for conservation were important for the individuals that were WTP. A negative response to participation was treated as protest if the individual agreed with one of the following: “I do not believe that my contribution will be used properly”, “the government should protect the wetland without imposing extra taxation” and “the British government should protect the wetland”. The final section collected various socioeconomic data on the respondents, including age, educational level and employment.

Data collection took place during the summer of 2005 in Nicosia and Limassol, through personal interviews with randomly selected individuals in various central areas of the cities. The sample was designed to include 52% of Greek-Cypriot population resident in the urban areas. Nevertheless, the sample includes individuals residing in other urban and rural regions that found themselves in the sampling areas at the time of the survey. In total 188 individuals responded to the questionnaire with residents of Nicosia, Limassol and other cities accounting for the 66%, 23% and 11% of the sample respectively.