Economic Analysis on Preference of Downstream Water Users to Ameliorate the Algae Bloom: Empirical Evidence from Korea

There are growing concerns on water quality degradation due to anthropogenic activities. Among many water quality problems, algae bloom at the reservoir-level could be one of the environmental catastrophes to prevent. To provide clean water to downstream, water suppliers and planners usually spend billions of public expenditure. This study tries to answer some fundamental research questions. Will it be worth to public for spending massive money to have clean water in already developed countries? How clean is acceptable to public? This study analysed downstream water users' preference to ameliorate water quality due to algae bloom during summer. Double bounded dichotomous choice survey method used to estimate willingness to pay to improve water quality of Paldang reservoir in Korea as a case study. The mean WTP based on predicted value from the probit model in this study was 1,981 won per household per month. The annual WTP was estimated at 137.9 billion won for Seoul metropolitan area.