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Improving Drinking Water Quality in South Korea: A Choice Experiment with Hypothetical Bias Treatments

Gschwandtner, Adelina, JANG, CHEUL, McManus, Richard (2020) Improving Drinking Water Quality in South Korea: A Choice Experiment with Hypothetical Bias Treatments. Water, 12 (9). Article Number 2569. ISSN 2073-4441. (doi:10.3390/w12092569) (KAR id:82962)

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The objective of this present study is to use choice experiments and an extensive cost-benefit analysis (CBA) to investigate the feasibility of installing two advanced water treatments in Cheongju waterworks in South Korea. The study uses latent class attribute non-attendance models in a choice experiment setting in order to estimate the benefits of the two water treatments. Moreover, it explores strategies to mitigate potential hypothetical bias as this has been the strongest criticism brought to stated preference methods to date. Hypothetical bias is the difference between what people state in a survey they would be willing to pay and what they would actually pay in a real situation. The study employs cheap talk with a budget constraint reminder and honesty priming with the latter showing more evidence of reducing potential hypothetical bias. The lower bound of the median WTP (willingness to pay) for installing a new advanced water treatment system is approximately $2 US/month, similar to the average expenditures for bottled water per household in South Korea. These lower bounds were found using bootstrapping and simulations. The CBA shows that one of the two treatments, granular activated carbon is more robust to sensitivity analyses, making this the recommendation of the study

Item Type: Article
DOI/Identification number: 10.3390/w12092569
Uncontrolled keywords: drinking water quality; water pollution; choice experiments; willingness to pay; random parameter and latent class logit; cost-benefit analysis; hypothetical bias treatments; cheap talk; honesty priming; attribute non-attendance
Divisions: Divisions > Division of Human and Social Sciences > School of Economics
Depositing User: Adelina Gschwandtner
Date Deposited: 16 Sep 2020 10:32 UTC
Last Modified: 15 Sep 2021 15:23 UTC
Resource URI: (The current URI for this page, for reference purposes)
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