Valuing the state of water in New Zealand using the experienced preference method

This article employs the experienced preference method to value the state of water in New Zealand. In doing so, this article represents a clear contribution to both the literature on non-market valuation and public policy regarding the preservation of water quality. The results show that a one-unit increase in satisfaction with the state of water bodies an individual has visited, is associated with a 1.6 per cent greater likelihood to report being very satisfied with their life. This positive link is robust to the estimation technique employed and a range of control variables. We find the value depends greatly on the functional form imposed on income. Specifically, the use of a cube root functional form yields an implicit willingness-to-pay (WTP) estimate of NZD 11,003, approximately half the size of the base model estimate. Uniquely, we couch this point estimate in the context of a broader distribution of implicit WTP estimates. It is hoped that these results will inform future applications and development of the experienced preference method and support public policy