Effect of Distance on the Preservation Value of Water Quality

A procedure is presented for estimating the effect of distance on the preservation value of environmental quality using the contingent valuation approach. The analysis is based on information from a regional household survey of willingness to pay for water quality at the Flathead River and Lake area in Montana. Regression analysis supplies the statistical estimate of the relationship between willingness to pay and distance to the study area. The contingent valuation approach is used in this study because it is able to value the preservation value of environmental quality before degradation takes place. Specifically, empirical analysis of the distance-preservation value hypothesis supports a negative relation for this particular study area. It is recommended that future preservation value studies explicitly incorporate both distance and visits to the study area as independent variables and that alternative models and specifications be tested.