Resource information
While polluted surface water is
encountered across most of China, few economic valuation
studies have been conducted on water quality changes.
Limited information about the economic values associated
with those potential water quality improvements or
deteriorations is a disadvantage for making proper choices
in water pollution control and clean-up activities. This
paper reports an economic valuation study conducted in
Yunnan, China, which aims to estimate the total value of a
real investment project to improve the water quality of Lake
Puzhehei by one grade level. Located in Qiubei County, which
is far from large cities, the lake has been experiencing
fast water quality deterioration in the past years. A
conservative estimation strategy shows that on average a
household located in Qiubei County is willing to pay about
30 yuan per month continuously for 5 years for water quality
improvement, equivalent roughly to 3 percent of household
income. The elasticity of willingness-to-pay with respect to
income is estimated to be 0.21. The economic rate of return
of the proposed project is estimated to be 18 percent,
indicating a strong demand and high efficiency of investment
in water quality improvement in China. This study also
demonstrates that previous knowledge about water quality
changes and the project may have a significant positive
impact on people's valuation, and that the interviewer
effect on valuation can be negative.
