Valuing improvements to coastal waters using choice experiments: An application to revisions of the EU Bathing Waters Directive

Planned changes to the European Union’s Bathing Waters Directive (2006/7EC) will force member states to produce improvements in a number of parameters of coastal water quality. This study uses the choice experiment method to estimate the economic benefits attached to such improvements, based on a sample of recreationalists on beaches in Ireland. The analysis indicates that improvements in all of the bathing water related attributes studied result in positive willingness to pay, and also show evidence of scope effects. Using random parameters and latent class modelling techniques, potential heterogeneity in preferences is then investigated and shown to be present to a significant degree. One observable determinant of this preference heterogeneity is the degree of exposure of individuals to health risks relating to water quality, as proxied by the type of recreational activity they undertake.

► Changes to the EU’s Bathing Waters Directive require improvements to coastal water quality.
► This paper uses a choice experiment to estimate the value of benefits attached to these changes.
► Evidence is found of positive willingness to pay for all of the improvements included in the design.
► Evidence is also found of significant variation in preferences.
► One important determinant of preference heterogeneity is exposure to risk.