Economic valuation of Harmful Algal Blooms (HAB): Methodological challenges, policy implications, and an empirical application

Carias, José; Vásquez-Lavín, Felipe; Barrientos, Manuel; Ponce Oliva, Roberto D.; Gelcich, Stefan

Abstract

This paper presents a literature review on the economic valuation of Harmful Algal Bloom (HAB) impacts, identifying methodological challenges, policy implications, and gaps. Unlike previous literature reviews, we are particularly interested in determining whether the economic valuations of HABs have included a policy analysis. Our paper provides a conceptual framework that allows us to evaluate whether applications of economic studies of HABs are consistent with a well-defined economic welfare analysis. It links methodologies and techniques with welfare measures, data types, and econometric methods. Based on this literature review, we present an example of economic valuation that closes the gap between policy analysis and valuation methodology. We use a stated preferences study to estimate a “seafood price premium” to create a fund to support monitoring systems and for damage compensation to producers in the presence of HABs. Results show that most economic studies on HAB valuation do not consider any cost-benefit analysis of a defined policy intervention. The predominant economic valuation methodology uses market information to estimate a proxy for welfare measure of the impact of HABs (loss revenue, sales, exports). Moreover, nonuse and indirect use values are ignored in the literature, while stated preference methodologies are underrepresented. Finally, results from 1293 surveys found that people are willing to pay an increase in the price of mussels to support a policy that informs on HAB. However, the lack of institutional trust affects the probability of paying negatively.

Citation

Carias, J., Vásquez-Lavín, F., Barrientos, M., Ponce Oliva, R. D., & Gelcich, S. (2024). Economic valuation of Harmful Algal Blooms (HAB): Methodological challenges, policy implications, and an empirical application. Journal of Environmental Management, 365, Article 121566. https://doi.org/10.1016/j.jenvman.2024.121566

• Journal Article Type: Article
• Acceptance Date: Jun 18, 2024
• Online Publication Date: Jun 22, 2024
• Publication Date: 2024-08
• Deposit Date: Jul 3, 2024
• Publicly Available Date: Aug 8, 2024
• Journal: Journal of Environmental Management
• Print ISSN: 0301-4797
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 365
• Article Number: 121566
• DOI: https://doi.org/10.1016/j.jenvman.2024.121566
• Public URL: https://durham-repository.worktribe.com/output/2512793