Author(s): Khiem. Dao Van; C; Hung. Nguyen Manh; Arnaud Reynaud; Khiem. Tran Van
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Keywords: Random parameter logit model; Willingness to pay; Choice experiment
Abstract: We use the random parameter logit model and the method of choice experiment to estimate how Vietnamese households value flood risk reduction policies. By conducting a survey with a sample of 448 households living in the Nghe An province, we compute the willingness to pay (WTP) for flood risk reduction and identify the relationships between WTP and different attributes of flood management policies (reduction of economic losses, reduction of human losses, political level in charge of implementing the flood management policy). According to the model, the marginal WTP to reduce the risk of damage to agricultural production varies from 0.306 million VND to 0.393 million VND, representing between0.94%and 1.21%of household annual average income, while the WTP to reduce the risk of damage to housing and house content equal to 1.232 million VND which represents 3.80%of the annual average income of household. Moreover, the marginal WTP for reducing fatality rate, which can be interpreted as the value of statistical life (VSL), is estimated to 78times the annual household average income in our sample. Our VSL is in line with existing results in literature in others developing countries.
Year: 2014