Effects of the Project Investments and Valuation of the Water Quality Improvement of the River Taehwa in Ulsan, Korea

Abstract

This study analyzes the effects of the project investments on the river water quality improvement and also provides contingent valuation estimates of household’s willingness to pay (WTP) to continue public investment to the river water quality improvement and maintenance. The estimation results using the OLS regression models with correction of autocorrelation show that the household soil pipe connection project with investment of 26.7 billion KRW has reduced 1.68 ppm in BOD and that the project dredging sediments at the river bottom with investment of 16 billion KRW has resulted in the decrease of 1.12 ppm in BOD at the downstream of the River Taehwa. Using a contingent valuation method with multiple choices in consideration of respondent’s uncertainty, the estimation results of four logit models show that truncated mean household’s WTP is estimated from 1224.7 KRW to 2747 KRW for the respective four models. The present values of total social benefits in the Ulsan Metropolitan City are estimated from 196 billion KRW to 441 billion KRW for the respective four models, when applying the 3 % discount rate.