Using multi-criteria analysis to explore non-market monetary values of water quality changes in the context of the Water Framework Directive

The EU Water Framework Directive represents a major change in the management of water resources and sets ambitious ecological objectives for all European waters. In the Directive, the economic assessment of the non-market environmental benefits of water quality improvements plays a crucial role. Studies valuing these benefits are now appearing in the literature, applying stated preference valuation techniques. However, these techniques are often criticized for providing only narrow mono-criterion information to the decision-making process. The research presented here builds on a recent line of investigation that combines monetary stated preference tools, in this case a choice experiment, with multi-criteria analysis, in this case the Analytical Hierarchy Process (AHP). We argue that the AHP can contribute to a better understanding and interpretation of the choice experiment results by exploring the criteria involved in respondents' trade-off between the attributes. The AHP provides relevant insights for the application of use-based water quality ladders in the valuation of environmental benefits in the context of the WFD. Results also show the importance of the spatial dimension of preferences for water quality.