Is the Value of Environmental Goods Sensitive to the Public Funding Scheme?: Evidence from a Marine Restoration Programme in the Black Sea

Authors Organisations
  • Kyriaki Remoundou(Author)
  • Fikret Adaman(Author)
    Boğaziçi University
  • Phoebe Koundouri(Author)
    Athens University of Economics and Business
    London School of Economics
  • Paulo A. L. D. Nunes(Author)
    The World Bank
Type Article
Original languageEnglish
Pages (from-to)1173-1192
Number of pages20
JournalEmpirical Economics
Volume47
Issue number4
Early online date22 Apr 2014
DOI
Publication statusPublished - 01 Dec 2014
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Abstract

In this paper, we conduct choice experiments in Turkey and Ukraine on the valuation of a marine restoration programme in the Black Sea, to examine whether the value of environmental goods is sensitive to the source of public financing. We contribute to the debate on the optimal composition of public expenditure, an issue that can be controversial in times of financial crises. We discriminate between two funding regimes through the reallocation of public spending. The first proposes financing the marine restoration programme by reducing public expenditure for investments in renewable energy, and the second by reducing public expenditure for civil servants' training. The results reveal that the marginal value of public money depends on the funding source. Furthermore, attribute values are sensitive to the trade-off implied by the funding scheme. The magnitude of the results differs in the two countries considered, because of their heterogeneity in political and cultural dimensions.

Keywords

  • Black Sea, marine resources, public goods, stated choice experiment, tax revenues reallocation H41, H50, Q51, Q57, H41