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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

Authors

José Carias

Felipe Vásquez-Lavín

Roberto D. Ponce Oliva

Stefan Gelcich



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.

Journal Article Type Article
Acceptance Date Jun 18, 2024
Online Publication Date Jun 22, 2024
Publication Date Jun 22, 2024
Deposit Date Jul 3, 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