Do Consumers of Environmentally Friendly Farming Products in Downstream Areas Have a WTP for Water Quality Protection in Upstream Areas?

Abstract

In South Korea, the Soyang Lake is an important source of drinking water to the metropolitan areas including Seoul. However, water quality problems in the Soyang Lake have still remained due to chemical contaminations attributed to conventional farming practices in the upstream areas. Based on a downstream consumer survey using a contingent valuation method, this study estimated the expected willingness to pays (WTPs) for water quality improvement through the conversion to environmentally friendly farming (EFF). The results showed that the estimated annual mean WTP is KRW 36,115 per household. The aggregated WTPs of downstream respondents in the Soyang Lake are sufficient to compensate for the income losses of upstream EFF farmers in highland farming areas. In addition, we found that the downstream citizens who recognize the label for EFF products and who intend to purchase EFF products in the future have a significant impact on WTPs for water quality improvement.

Keywords

• water quality improvement
• willingness to pay
• compensation scheme
• conversion to environmentally friendly farming