The effect of risk perception on public preferences and willingness to pay for reductions in the health risks posed by toxic cyanobacterial blooms

Mass populations of toxin-producing cyanobacteria are an increasingly common occurrence in inland and coastal waters used for recreational purposes. These mass populations pose serious risks to human and animal health and impose potentially significant economic costs on society. In this study, we used contingent valuation (CV) methods to elicit public willingness to pay (WTP) for reductions in the morbidity risks posed by blooms of toxin-producing cyanobacteria in Loch Leven, Scotland. We found that 55% of respondents (68% excluding protest voters) were willing to pay for a reduction in the number of days per year (from 90, to either 45 or 0 days) that cyanobacteria pose a risk to human health at Loch Leven. The mean WTP for a risk reduction was UK 9.99-12.23 pound/household/year estimated using a logistic spike model. In addition, using the spike model and a simultaneous equations model to control for endogeneity bias, we found the respondents' WTP was strongly dependent on socio-demographic characteristics, economic status and usage of the waterbody, but also individual-specific attitudes and perceptions towards health risks. This study demonstrates that anticipated health risk reductions are an important nonmarket benefit of improving water quality in recreational waters and should be accounted for in future cost-benefit analyses such as those being undertaken under the auspices of the European Union's Water Framework Directive, but also that such values depend on subjective perceptions of water-related health risks and general attitudes towards the environment. (C) 2012 Elsevier B.V. All rights reserved.