Two Essays on Valuation of Marine Resources: Applications to Sweden

Abstract

Paper 1: Historical records show that the stock density of coastal cod (Gadus morhua) in the waters off the Swedish west coast is extremely low. In 2001 the stock size was two percent of the size in the 1970s. Scarce fish resources imply conflicting interests among various user groups, and sustainable management requires necessary trade-offs to be made. An economic evaluation of the social benefits of the use of these fish resources is valuable for coastal managers in their decision making process. In this paper, we apply the contingent valuation method to estimate the willingness to pay for an increased cod stock in the coastal waters of the Swedish west coast. Also, we test the effects of using different elicitation formats and payment vehicles in the valuation process. We find that the dichotomous choice format yields higher values than the open-ended format and that the formats are statistically different. Surprisingly, we find no statistical difference between payment vehicles (tax versus license fee). The median values range from SEK 150 to 250 depending on estimation method, and mean values range from SEK 230 to 900. A relatively modest aggregation procedure gives an aggregate WTP equal to SEK 704 million. This is a reflection of the public concern for the coastal cod population in the Swedish waters.

Paper 2: The marine environment provides many goods and services dependent upon the quality of coastal waters. In this paper, we represent water quality by three different attributes, fish stock level, bathing water quality, and biodiversity level, and carry out a choice experiment among residents on the Swedish west coast to estimate the economic benefits of improved coastal water quality. We analyze data using the mixed multinomial logit model and explore various distributional assumptions and derive individual-specific parameters. Our results confirm heterogeneous preferences for these attributes and show that respondents have high levels of environmental concern and that substantial values are at stake. The most urgent action according to our findings is firstly to prevent further depletion of marine biodiversity and secondly to improve Swedish cod stocks.