Willingness to Pay for Riparian Zones in an Ozark Watershed

Increased population and land-use changes can create contention among stakeholders, making it challenging to manage ecosystem services (Sabatier et al. 2005; Mouchet et al. 2014; Castro et al. 2016). A thorough understanding of the ecosystem and the related socioecological dynamics can facilitate decision making in the management of ecosystems, especially in areas of growing population (Tentes and Damigos 2015). According to Wainger et al. (2010), an improved understanding of ecosystem services can help guide decisions regarding natural resource conservation and management. Researchers have established that decisions, which can be reflected in the willingness to pay (WTP) for ecosystem services, are greatly influenced by continuous changes in land use (Bockstael 1996). The physiographic boundaries of watersheds can serve as useful spatial boundaries for the selection of populations in studies that examine the factors affecting WTP for protecting watershed ecosystem services (Bockstael 1996). As such, this study considers stakeholder WTP for riparian zone conservation in an Ozark watershed. This research can help guide environmental managers and policymakers in making management decisions for watersheds.

Clear Creek watershed, located in Washington County, Arkansas, is a subbasin of the Illinois River watershed (Fig. 1). Over the past two decades, increased urbanization has resulted in extensive land-use change throughout the Clear Creek area. According to census block data available at the watershed scale (CAST 2006), between the year 1990 and 2000 the population of Clear Creek watershed experienced a 50.36% increase, growing from 40,103 to 60,299. A population density of $\text{303.98\hspace{0.17em}\hspace{0.17em}}\mathrm{people}/{\mathrm{k}\mathrm{m}}^2$ ($787.30\mathrm{people}/{\mathrm{mi}}^2$) was reported for the year 2000; however, this value is estimated to be much greater because the population of Washington County, where Clear Creek is located, has seen a population increase of 39.03% between 2000 and 2014, with much of this growth occurring in the urbanizing areas of Clear Creek watershed (USCB 2015). This increased urbanization has inadvertently disrupted ecological function within the watershed, leading to various ecological degradations such as riparian zone depletion, habitat fragmentation, and increased impermeable surfaces (Barbour et al. 1999; Urban et al. 2006; Mazor et al. 2009). As a result, the Arkansas Department of Environmental Quality has listed Clear Creek as not achieving its designated uses for primary contact due to high levels of pathogen indicators (fecal coliform) from sources of urban runoff (USEPA 2009; ADEQ 2016).

To counteract the effects of urbanization on watersheds, environmental managers have considered the establishment and maintenance of riparian zone ecosystems along the banks of local waterways. Riparian zones play an integral role in maintaining ecosystem integrity (Barbour et al. 1999; Fielding et al. 2005; Urban et al. 2006) and are often used as management tools for protecting watershed ecosystem services (Jorgensen et al. 2002; Mayer et al. 2007). A study by DeWalle (2008) suggests that land uses such as urbanization, forestry, mining, and agriculture can deplete riparian vegetation and thus have negative impacts on aquatic ecosystem function. The problems associated with riparian zone vegetation loss are warmer stream water temperatures (DeWalle 2008), increased bank erosion (Barbour et al. 1999; Mayer et al. 2007), reduction and fragmentation of wildlife habitat (Urban et al. 2006; Mayer et al. 2007), reduced water quality as a result of increased sedimentation and organic pollutants (Barbour et al. 1999; Mayer et al. 2007), and the reduction of aesthetic beauty (Cunningham et al. 2009). Because of this, a better understanding of how people value riparian zones can provide a valuable tool for improving watershed management and, as a result, lead to improved watershed ecosystem quality (Cho et al. 2005; Fielding et al. 2005; Wainger et al. 2010).

The establishment and maintenance of healthy ecosystems can provide numerous benefits to households and businesses through the ecological services they provide; however, several factors make it difficult to assign a monetary value to these services (Costanza et al. 1997). To assess the benefits of local ecosystems, environmental managers need information about the quality of the ecosystem they are managing, the value associated with the services provided by the ecosystem (Costanza et al. 1997; Johnson and Baltodano 2004), and the factors that affect such valuation (Pendleton et al. 2001; Hoyos et al. 2009; Spash et al. 2009).

Commonly used approaches for monetizing the value of ecosystem services include benefit transfer (BT), travel cost, and contingent valuation method (CVM) (Deacon and Kolstad 2000; Loomis 2000). Benefit transfer is a relatively inexpensive and timely approach for estimating the value of ecosystem services. This approach involves the use of values obtained through previous studies in order to calculate an estimate for the area in question. In using BT, analysis may involve the value-transfer and/or function-transfer approach (Elsin et al. 2010). While BT is considered to be a useful valuation approach for studies in which data collection options are limited, there are several factors that may affect the accuracy of results (Rosenberger and Stanley 2006).

With the travel cost method (TCM), economists can estimate demand shifts for improved water resource quality using visitor travel behavior data collected for a particular recreation site. Although Clear Creek offers some recreation opportunities, this does not encapsulate all benefits received by those living within the watershed. In order to estimate a response that includes both recreational and existence value, an approach known as the CVM can be used (Loomis 2000).

The contingent value method is a commonly used tool for providing insight into an individual’s use value, bequest value, and existence value for a public good or service (Mitchell and Carson 1989) when there are no existing markets for the public good or service (Costanza et al. 1997; Loomis et al. 2000; Farber et al. 2006; Ryan and Spash 2011; Loomis 2014; Castro et al. 2016). Several studies have utilized CVM to determine the public’s willingness to pay for a wide variety of ecosystem services, such as drinking water (Vásquez et al. 2009), fisheries improvements (Loomis 2006), national parks (Adams et al. 2008), and coastal zone quality improvements (Halkos and Matsiori 2012; Loomis and Santiago 2013), while other studies have measured what people prefer as the level of environmental quality (Loomis et al. 1996; Asakawa et al. 2004).

Various factors have been shown to affect WTP, including bid amount (Loomis et al. 2000), an individual’s familiarity with an environmental resource (Carson et al. 2001; Hoyos et al. 2009), previous use of an environmental resource (Kniivilä 2006; Halkos and Matsiori 2012; Kaffashi et al. 2015), direct experience with an environmental resource (Turpie 2003; Kaffashi et al. 2015), and respondent knowledge of environmental processes (Turpie 2003). Demographic characteristics including age (Amigues et al. 2002; Halkos and Matsiori 2012; Legesse 2015), gender (Pumphrey et al. 2008; Solomon and Johnson 2009; Halkos and Matsiori 2012), education level (Amigues et al. 2002; Grazhdani 2015; Legesse 2015), membership in environmental groups (Loomis et al. 2000; Halkos and Matsiori 2012), race (Turpie 2003), income level (Halkos and Matsiori 2012; Kreye et al. 2014; Grazhdani 2015), and attitude (Kotchen and Reiling 2000; Ryan and Spash 2011; Castro et al. 2016) have all been shown to be factors in WTP.

Ryan and Spash (2011) define attitude as an evaluative tendency and they state that the more positive the attitude toward environmental change, the more favorable the responses are for WTP. Ryan and Spash (2011) also explain that contingent valuation studies are useful ways of assessing whether or not attitude is a true factor in WTP. Jorgensen and Syme (2000) also found that attitude was a larger factor in WTP variability than price, payment vehicle, or income. Kniivilä (2006) found that general attitude—defined as an evaluative response toward an object by Eagly and Chaiken (1993)—toward conservation, regardless of personal experience with the conservation area, played a key role in WTP. Finally, attitude toward paying for or protecting a public good differs based on one’s individual perspectives toward public goods, collective action, and individual gain. Ostrom (2000) states, for example, that there are those who refuse to participate in supporting a public good regardless of the participation of others, those who are willing to participate only when they estimate that others will also participate, and those who are always willing to be part of collective action for a public good. This study attempted to capture this range of perspectives in respondent attitude to better understand the factors influencing WTP.

The way a community perceives itself in relation to its natural surroundings can also affect the value placed on the natural environment and hence its treatment (Pendleton et al. 2001; Sabatier et al. 2005; Silvano et al. 2005; Paradise 2005; Hoyos et al. 2009; Adams et al. 2013; Lewis and Popp 2013). Consequently, perception has the potential to affect the community’s WTP for ecosystem services provided by the natural environment (Hanemann 1984). Therefore, understanding perception of ecosystem integrity and its role in influencing WTP for ecosystem services can be an important part of the environmental management and policy-making process.

While there are studies that have examined the factors of willingness to pay for ecosystem quality of streams, few have been conducted for streams or watersheds in the Ozarks—or even in the southern part of the country—and none have considered perception of ecosystem quality as a factor of willingness to pay. For instance, Holmes et al. (2004) estimated the benefits and costs of riparian restoration projects along the Little Tennessee River in western North Carolina using CVM and concluded that riparian restoration in this watershed is an economically feasible investment of public funds. Although consumer perception was not considered, they suggested that understanding the value consumers place on ecosystem services would make ecosystem valuation easier. This study, therefore, goes a step further than most studies in examining whether or not one’s ability to accurately perceive ecosystem quality is a factor of willingness to pay for riparian zones in an Ozark watershed. Environmental managers can use the results from this study to identify the factors that drive stakeholder WTP in this region and, as a result, develop environmental management programs and policies that are better understood by and acceptable to stakeholders.

To determine the value of establishing and maintaining riparian zones in the Clear Creek watershed, a survey was mailed to residents living within the watershed area. Contingent valuation in the form of a dichotomous choice question was used within the survey to elicit WTP for the ecological services provided by riparian zones. Additional questions were included which served to determine the factors having the greatest effect on WTP for these services.

The mean willingness-to-pay value of $80.07 was lower than in some studies (Loomis et al. 2000; Nicosia et al. 2014), higher than values found in others (Cho et al. 2005; Castro et al. 2016), and fell within ranges shown in recent meta-analyses of ecological valuation studies (Barrio and Loureiro 2010; Kreye et al. 2014). Determining an accurate value for ecological services can be a complex process (Costanza et al. 1997). Because of this, it is difficult to determine which factors may independently or cumulatively affect WTP values found between similar studies. For instance, Kreye et al. (2014) found that studies conducted in the southern United States tended to elicit lower WTP values than other regions. Like this study, other studies by Loomis et al. (2000) and Nicosia et al. (2014) each examine WTP using a dichotomous choice CVM scenario with bid amounts ranging from $1 to $100. However, as opposed to paying for conservation through an annual tax, as was assessed in this study, they measured respondent WTP through an increase in monthly water fees. Because their results were significantly higher than those found in this study, as well as other studies eliciting payment through an annual tax scenario, it might be worthwhile for managers to consider a monthly payment option, as opposed to soliciting resident payment through an annual tax because Kreye et al. (2016) have noted that the policy process used to target a particular outcome (such as conservation) can affect WTP levels. Additionally, because the Loomis et al. (2000) annual value was almost twice as high as the value found by Nicosia et al. (2014), ($252 versus $133, respectively), it was hypothesized that the use of in-person, as opposed to mail-out, surveying techniques could have resulted in higher WTP values caused by respondents feeling social pressure to pay a higher amount (Nicosia et al. 2014).

The fact that mean willingness to pay was most significantly impacted by bid amount, income, and attitude toward paying indicates that Clear Creek residents are strongly motivated by financial factors. This is similar to other studies that have also identified bid amount (Loomis et al. 2000; Loomis 2014), income (Adams et al. 2008; Kreye et al. 2014), and attitude toward paying (Jorgensen and Syme 2000) as factors in WTP. Some studies have found level of education to have a positive impact on WTP for ecological services (Amigues et al. 2002; Ivanova and Tranter 2004; Grazhdani 2015; Legesse 2015; Castro et al. 2016), but others, including this study, show the effect of general education levels to be insignificant (Nicosia et al. 2014).

Direct experience with the watershed, perception of ecosystem integrity, and knowledge of ecosystem processes were also hypothesized to play a role in WTP, but data from the study show that WTP was not significantly affected by these variables. Although this survey contained questions assessing Clear Creek residents’ general knowledge of ecosystem processes and briefly mentions the benefits of maintaining ecosystem services, the previously discussed study by Loomis et al. (2000) included additional background information, such as diagrams, aimed at explaining the specific ecosystem services being valued and showing how local stakeholders could be directly affected by the maintenance of such services. It is possible that this additional information may have played a role in eliciting the higher WTP values found in that study, implying a usefulness of watershed education efforts.

Hanemann (1984) suggested that if people perceive themselves to be receiving direct goods and services from a functional ecosystem, then the probability that they would be willing to pay increases. The fact that many in this group did not receive direct-use benefits from the ecosystem services of Clear Creek and consistently misperceived ecosystem quality, yet were still often willing to pay something suggests that residents placed indirect use value on the services provided by riparian zones in Clear Creek watershed and therefore were willing to pay some amount to protect the watershed (Hanemann 1984; Mitchell and Carson 1989; Turpie 2003; Adams et al. 2013).

Some watershed managers may be pleased to learn that there is a willingness by some to provide financial resources to protect riparian zones even with inadequate perceptions of ecosystem quality. However, the fact that many residents appear to lack certain knowledge necessary to perceive and assess ecosystem quality implies that environmental managers may also benefit from the implementation of programs aimed at educating the community about their local watershed (Adams et al. 2013; Borisova et al. 2013). A recent study by Boellstorff et al. (2013) showed that 51% of respondents living in cities with populations roughly the size of Clear Creek were interested in learning more about watershed management, with residents indicating that they would prefer obtaining water resource information through reading fact sheets, bulletins, or brochures (50%), watching television coverage (48%), reading newspaper articles (46%), or visiting a website (45%). Although implementing a watershed education program would require additional funding, not addressing the disconnection in perception of ecosystem quality may result in conflict between environmental managers and the general public as stakeholders may feel that funds for conservation efforts are being misallocated. Aligning stakeholder perception to the reality of the ecosystem quality could result in more accurate willingness-to-pay outcomes, thus allowing funding be allocated more efficiently (Adams et al. 2013; Castro et al. 2016).

The results of this study indicate a discrepancy between public perceptions of ecosystem quality, the scientific measurement of ecosystem quality, and willingness to pay for improved ecosystem quality. In environmental management, a clear understanding of the public’s perceptions of ecosystem quality can indicate their relationship to and experience with that ecosystem, thus facilitating the implementation and funding of ecosystem management programs. The results of this study also suggest that one way to connect the public with the watershed ecosystem is to use financial costs and benefits as a means of communicating with stakeholders about protecting and managing ecosystem quality. In other words, if the primary factors that determine public WTP are related to monetary parameters (price, income, attitude toward paying), then messages related to ecosystem management would be most effective if communicated through the public’s inherent tendency to establish value based on their economic relationships to the goods and services provided by the ecosystem. This type of communication with stakeholders is important to consider when developing ecosystem management plans, policies, and educational outreach programs, especially. This study, for example, demonstrates that the public does not receive direct-use benefits from the watershed ecosystem services, but as evidenced by their willingness to pay something, there does exist enough understanding of the benefits derived from the ecosystem to place an indirect-use value on it. This indirect-use value can be leveraged when communicating the benefits of establishing an ecosystem management program for a watershed such as Clear Creek. For example, based on the results of this study, those ecosystem management programs that clearly demonstrate such benefits as increased property values, increased revenue to the community through job creation or tourism, or increased cost savings for water treatment would more likely lead to willingness to pay for the program. If environmental managers do not identify and understand the public’s perceptions of ecosystems in addition to establishing the value the public places on ecosystem integrity, there could be resulting political and budgetary difficulties throughout the ecosystem management process. In other words, this could potentially lead to a perceived misuse of funds by environmental managers or a perceived mismanagement of the ecosystem and therefore result in a lack of support from the community for the program.

There is a need for more research on the public’s WTP for ecosystem services in the Ozark region. The region is continually ranked as one of the best places to live and do business, which will continue to lead to growth in population in an area with an ecosystem that is easily impacted by land-use change. Future research could explore not only the WTP for ecosystem services in watersheds across the region, but could also further evaluate the factors that influence WTP, including those factors that influence attitude toward paying. Future studies could also explore a variety of payment vehicles in establishing WTP, studies that evaluate the influence of watershed education programs on perception and WTP, and studies that explore the public’s willingness to engage in collective action efforts to protect ecosystem services. Studies such as these could all facilitate the ability of ecosystem managers to establish successful watershed management and conservation programs.

Financial support for the bioassessment and survey production and mailing costs was provided in part by the Illinois River Watershed Partnership.