Stated Preferences for Intermediate versus Final Ecosystem Services: Disentangling Willingness to Pay for Omitted Outcomes

Stated preference scenarios often provide information on intermediate biophysical processes but omit information on the resulting final services that provide utility. This may cause respondents to speculate about the effects of intermediate outcomes on their welfare, leading to biased welfare estimates. This work clarifies distinctions between intermediate and final ecosystem services within stated preference valuation and develops a structural model by which to infer respondents' speculations when a final ecosystem service is omitted. The model also derives implications for welfare estimates. Methods and results are illustrated using an application of choice experiments to fish restoration in Rhode Island's Pawtuxet watershed.Key Words: choice experiment, choice modeling, ecosystem service, river restoration, valuation, willingness to pay(ProQuest: ... denotes formulae omitted.)Studies often apply stated preference valuation to quantify willingness to pay (WTP] for changes in the quantity or quality of ecosystem goods and services (henceforth, "services"]. Consistent estimates of these values require careful definition of the services under consideration and how those services contribute to human welfare. Within ecosystem service analyses, final ecosystem services may be defined as ecosystem outputs that directly enhance respondents' utility. Intermediate ecosystem services may be viewed as inputs into the biophysical production of final services (Boyd and Krupnick 2009, Brown, Bergstrom, and Loomis 2007, Fisher et al. 2008, Fisher, Turner, and Morling 2009, Wallace 2007], That is, intermediate services provide benefits through their effect on final goods and services that are valued directly by people (Johnston and Russell 2011], A common example of an intermediate service is water purification or nutrient cycling in riparian buffers. Water purification, as it relates to a nutrient like nitrogen, is accomplished through intermediate ecological processes that generally benefit humans only through their contribution to the final, directly valued services (e.g., clean drinking water or surface waters that are valued for recreational or aesthetic purposes]. Lack of attention to the distinction between intermediate and final services can lead to welfare estimates that omit, double count, or misrepresent the contributions of those services to utility. Many ecosystem processes provide both intermediate and final services, further complicating welfare analysis.In the following case study, multiple ecosystem services are influenced by restoration of passage for migratory fish such as alewife (Alosa pseudoharengus] and blueback herring (Alosa aestivalis] in Rhode Island's rivers. Many of these services influence public welfare directly. An example is the abundance of fish- dependent wildlife such as otters and osprey (Johnston et al. 2012], Some of these services simultaneously influence, or provide intermediate effects on, other final services. For example, fish and wildlife abundance influences overall ecosystem condition or naturalness, which is also valued by Rhode Island residents as a final service (largely due to nonuse motivations].1 Still other services influence welfare only through intermediate channels. For example, restoration affects the mussel species Anodonta implicate, which relies on migratory fish to carry its larvae. While not valued directly by the public, a healthy Anodonta implicate population influences overall ecosystem condition (Johnston et al. 2011, 2012], These examples illustrate three ways that individual ecosystem services can influence welfare: (i] directly as a final service, (ii] both directly as a final service and indirectly as an intermediate service, or (iii] only as an intermediate service.Despite the importance of these distinctions for welfare estimation, surveys in the stated preference literature have rarely clarified the difference between intermediate and final services. …