ENVIRONMENTAL VALUATION OF AN ARTIFICIAL LAKE IN BRAZIL: AN APPLICATION OF THE CONTINGENT VALUATION METHOD

Abstract

This paper estimates the value of environmental damage generated by
pollution in the artificial lake Salto Caveiras, evaluating the willingness to
pay (WTP) of the local population for its recuperation and conservation.
Environmental Concern Scale (ECS) was introduced, in addition to the
socioeconomic variables, collected by the Contingent Valuation Method
(CVM) and modeled by Logit regression and evaluated by multivariate
statistics instruments, utilizing Principal Components Analysis (PCA).
We demonstrate that 45.6% of the interviewed are willing to pay monthly.
The others answered negatively: 18.9% because of payment incapacity,
12.8% would donate a smaller value than the one proposed and 22.8% gave
a protest response.. The introduction of ECS as a new variable to CVM is
significant as a unique and innovative variable provided by multivariate
analysis indicated to be promising, what recommends such procedures to
other studies.