Assessing the economic value of protecting artificial lakes

This study examines the current and potential economic value of an artificial lake aiming to explore the factors that affect people’s willingness to pay (WTP) for its protection. The WTP was derived from a face-to-face survey of 564 residents and recreational users of the Plastira’s lake, one of the most important constructed wetlands in Greece. We find a higher WTP of individuals towards the lake’s functions and their desire to prevent possible diminutions of its total economic value and we show that the most important variable is pro-environmental behavior. It is also found that respondents have different behavior for lake’s economic value according mainly to their origin (residents or recreational users). Using adequate econometric models to take into consideration the protest answers, we find changes in the influence of the explanatory variables compared to the usual simple binary model formulations. With the help of principal components analysis, four factors are extracted (water use, production, flora and fauna and quasi-option values) and their influence on respondents’ WTP is explored. Demographic variables (like income, age, gender) together with the extracted factors have a strong impact on the decision of individuals to pay as well as on the specific amounts stated.