Are we willing to pay to reduce forest wildfires in Poland?
December 23, 2014
The forest wildfires problem is considered as an important issue by the majority of Polish population who are willing to pay for a reduction in the fires number and for decreasing forest wildfires effects (mainly the biodiversity loss) – these are the results of a survey conducted for the purposes of a research project by Dr. Anna Małgorzata Bartczak (Faculty of Economics, University of Warsaw) by the Public Opinion Research Center. In addition, the results suggest that the risk of forest wildfires is overestimated by the respondents, and the individuals’ risk preferences in the context of environmental damages and events associated with the loss of financial assets are similar.
In this study we evaluated social benefits from changes in forest fire protection strategies in Poland using non-market valuation techniques. In the valuation process we used a non-market valuation method based on a stated preferences approach (questionnaires) and we applied special econometric techniques. The results indicate that most of the respondents would like to support financially the changes in forest fire protection strategies. The individual’s willingness to pay was estimated at 21zł annually.
Additionally, we examined the impact of risk preferences on individuals’ willingness to pay for such changes. Risk and uncertainty play a significant role in almost every economic decision. Understanding risk attitudes is a crucial factor to understand the process of resource allocation, including decisions on investments decreasing risk of environmental damages. In this study risk preferences were elicited based on a few approaches, including the innovative experimental methodology.
The results obtained suggest that the Prospect Theory is a better descriptor of behavior than the Expected Utility Theory. It means that people weight more heavily losses than equivalent gains and that they overweight small probabilities and underweight large ones. Moreover, we showed that risk preferences in financial and environmental domains are similarly shaped and that they can be transferable.
About the project: The influence of risk preferences on social benefits valuation for forest fires prevention in Poland (no NCN 2011/01/B/HS4/04750) affiliated by the Faculty of Economic Sciences at the University of Warsaw conducted in 2011–2014 and financed by National Science Centre Poland.
Dr. Anna Małgorzata Bartczak – an assistant professor at the Microeconomics Department at the Faculty of Economic Sciences University of Warsaw and the head of Warsaw Ecological Economics Center. Dr. Bartczak assistant professor in the Department of Microeconomics and manager of Warsaw Ecological Economics Center. Dr. Bartczak is the author of numerous publications in renowned international scientific journals, mainly from the valuation of environmental goods. She also is the co-author of an academic book Public-private partnerships as a way of providing public services in Poland at the local level. Opportunities and threats (CeDeWu, Warsaw 2008). She is a member of the European Association of Environment and Natural Resources Economists. For her scientific achievements, Dr. Bartczak has received two awards of the Rector of the University of Warsaw. Currently, she leads the project “Valuation aspects of justice and social preferences for renewable energy sources and their location in Poland and Germany” financed by the National Science Centre Poland, and she is involved in the project “Gender Equality at the University”, GENDEQU funded by the Norwegian Financial Mechanism.