Improving Water Quality in England and Wales: Local Endowments and Willingness to Pay

The Water Framework Directive (WFD) is a far-reaching piece of European Community legislation. Estimates of the benefits of WFD Programs are needed at the present time for two reasons. First, the WFD itself allows for derogations from the general requirement of member states to reach good ecological status in all water bodies by 2015 in cases where the costs of doing so can be shown to be disproportionate. This paper presents a contingent valuation survey for the valuation and desirability of improvements regarding the WFD in England and Wales. According to our behavioral models, positive welfare changes constitute a sound argument in favor of the development of programs developed to increase the water quality. Moreover, the paper tests how the ‘departure’ endowments influence the willingness to pay for water quality improvements. In this sense, scope test and diminishing marginal value hypothesis are examined. The average willingness to pay appears to be insensitive to the water improvement intensity and a scope bias could be affecting our results. Nevertheless, it is shown a marginal decreasing value for water quality improvements and that the environmental program leads to different wellbeing intensity attending to local endowments.