Contingent Valuation of Yangtze Finless Porpoises in Poyang Lake, China An der Wirtschaftswissenschaftlichen Fakultät der Universität Leipzig eingereichte DISSERTATION zur Erlangung des akademischen Grades Doktor der Wirtschaftswissenschaft (Dr. rer. pol.) vorgelegt von Yanyan Dong Master der Ingenieurwissenschaft. Leipzig, im September 2010 Acknowledgements This study has been conducted during my stay at the Department of Economics at the Helmholtz Center for Environmental research from September 2007 to December 2010. I would like to take this opportunity to express my gratitude to the following people: First and foremost, I would like to express my sincere gratitude to Professor Dr. Bernd Hansjürgens for his supervision and guidance. With his kind help, I received the precious chance to do my PhD study in UFZ. Also I have been receiving his continuous support during the entire time of my research stay. He provides lots of thorough and constructive suggestions on my dissertation. Secondly, I would like to thank Professor Dr. -Ing. Rober Holländer for his willingness to supervise me and his continuous support so that I can deliver my thesis at the University of Leipzig. Thirdly, I am heartily thankful to Dr. Nele Lienhoop, who helped me a lot complete the writing of this dissertation. She was always there to meet and talk about my ideas and to ask me good questions to help me. Furthermore, there are lots of other people who I would like to thank: Ms. Sara Herkle provided the survey data collected in Leipzig and Halle, Germany. Without these data, my thesis could not have been completed. It is my great honor to thank Professor John B. Loomis (Department of Agriculture and Resources Economics, Colorado State University), who was always very patient to answer my questions and offered very good suggestions on the CVM study. I would like to thank those who provided valuable information and advice on conservation project of YFPs, including Secretary- General Professor Nianhua Dai (Jiangxi Academy of Science, Ecological Society of Jiangxi Province, Nanchang, China), Professor Ding Wang (Insititute of Hydrobiology, Chinese Academy of Science, Wuhan, China), Associate Professor Kexiong Wang (Insititute of Hydrobiology, Chinese Academy of Science, Wuhan, China), Dr. Xiujiang Zhao (Insititute of Hydrobiology, Chinese Academy of Science, Wuhan, China), Mr. Shuyuan Wu (Section chief of Resources and Environmental Protection, Jiangxi Administration of Fishery Bureau, Nanchang, China). In addition, I would like to thank the people who assisted the survey in China, including Ms. Yuangyuan Wang (Beijing), Mr. Gang Dong (Beijing), Ms. Zongliang Li (Beijing), Ms. Dan Zhang (Beijing), Mr. Zongkai Ding (Beijing), Mr. Qiong Liu (Beijing), Ms. Yuangyuan, Gao (Beijing), Mr. Jianbiao Teng (Guangzhou), Ms. Chong Zheng (Guangzhou), Ms. Liangyan Wei (Guangzhou), Mr. Xiaochun Shi (Guangzhou), Mr. Liangmeng Wei (Guangzhou), Ms. Ting Zhang (Guangzhou), Mr. Nianhua Dai (Nanchang), Mr. Shuyuan Wu (Nanchang), Mr. Weiliang Yang (Nanchang), Ms. Lingling Zhang (Nanchang). With your kind help, the survey could be completed smoothly. I I offer my regards and blessings to all of those who supported me in any respect during the completion of the thesis, including Dr. Katharine N. Farrell (who gives me encouragement and confidence sustaining me overcome all the difficulties, help me proof-reading on several chapters and statistics), Alexia Peterson (my International-Cultural Communication teacher, who taught me how to deal with business in a completely different cultural background. Her kind assistance made my life more comfortable and easier), Dr. Paul Lehmann (my officemate, who never hesitated to offer his kind help) and Aaron Leopold (my officemate, who helped me a lot with my English). It is also a great opportunity to show my great gratitude to three secretaries, Helga Dietsch, Monika Nussbaum, and Birgit Stumvoll who helped me a great deal with administrative matters and a pleasure to thank all the colleagues in Department ÖKUS and Chinese colleagues at the UFZ, who helped broaden my view and knowledge, and made lots of fun in my life. It is my great honor to meet and get to know you all in Leipzig. Besides, I would like to thank the Helmholtz Center for Environmental Research-UFZ for providing a good environment and facilities to complete this project. The UFZ also financed my field trip to China. Also, I would like to take this opportunity to thank to the Junior Scientist Exchange Program between the China Scholarship Council (CSC) and the Helmholtz Association of German Research Centers for offering the financial support. Finally, I am indebted to my lovely family: my parents, Hongmei Liu, and Ruihe Dong, for giving me life in the first place, for educating me with aspects from both arts and sciences, for educating me how to be a useful person, for unconditional support and encouragement to pursue my interests, even when interests went beyond boundaries of language, field and geography. My brother, Gang Dong and his wife, Yuanyuan Wang, for listening to my complaints and frustrations, and for believing in me, and for kind help in my life and work. II Executive Summary Yangtze finless porpoises (YFPs) are the only fresh-water adapted porpoises in the world and they are endemic to Yangtze River system, including Poyang Lake. They are threatened by many factors, such as illegal fishing and overfishing, sand dredging, intensive shipping traffic, and pollution from agriculture and industry. Consequently, their population is decreasing at a great rate and they are listed as an endangered rare species on the red list of the International Union for Conservation of Nature (IUCN) since 1996. Moreover, a hydroelectricity project in Poyang Lake is in planning by the state of Jiangxi province, which will generate further serious threats to YFPs by cutting off their migration route and fragmenting their habitat. Therefore, it is very urgent to take some protection measures for YFPs. A special nature reserve is one possibility to protect YFPs, such as a nature reserve area, which is located in Poyang Lake. In order to find out whether a nature reserve is worthwhile, an economic analysis valuing the benefit of YFPs has been conducted. An appropriate method, the contingent valuation approach, has been chosen. The overall aim of such a contingent valuation study is to estimate the total benefits of YFPs by asking individuals’ willingness to pay for the porpoise conservation project. Because many people are unfamiliar with YFPs and the species’ total values consist of mainly non-use values, preference construction and estimating a demand function is a complex task. Therefore, the valuation workshop method, a group-based approach, which can make respondents motivated and well-informed so that they thoroughly consider the questions, provides a realistic decision-making environment. This method was selected to help respondents construct their preference. Within this study, a series of such valuation workshops were successfully organized and data and information were collected. The findings of the study have both methodological and policy-related implications. From the perspective of methodology, the important findings include: 1) Valid response rates are high enough to support further analysis and large mean WTP for porpoise conservation are obtained. Therefore, it can be concluded that the valuation workshop method as has been chosen in this study, is suitable for valuing porpoise conservation. The valuation workshop method can make people well informed about environmental goods and services, such as rare species, so that they can build their preference about them, which is quite a complex task for many individuals. III 2) Distance effects are verified to fail to work on willingness to pay (WTP) for porpoise conservation, which is mostly driven by non-use values. Therefore, distance need not be included in the aggregation analysis of total benefits of YFPs. Similarly, the market for conservation of YFPs can be defined as the nation of China. And the sampling frame of such an evaluation of a rare species can be all the Chinese population. 3) Income effects are confirmed to be significantly influential for both Chinese respondents and German respondents. Hence, the aggregation of total values of YFPs should consider about individuals’ income levels and their ability to pay (ATP). It is inferred from the fact of smaller mean WTP in China as compared with Germany that some low-income respondents’ WTP bids are possibly distorted by their ATP, which needs further confirmation in follow-up research. In addition, there are also some policy-related implications, which are closely related with the mentioned methodological aspect: The total economic values of porpoise conservation are predicted to be appreciably huge. Definitely, their total benefits should be taken into account by politicians and decision-makers. This study makes explicit people’s attitudes and preference on the trade-off between economic growth and ecological use. The establishment of a special nature reserve for YFPs is still an open question. IV Brief Contents Tables.............................................................................................................................................................. XIII Figures .............................................................................................................................................................XVI Panels.............................................................................................................................................................XVII