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Is the value of environmental goods sensitive to the public funding scheme? Evidence from a marine restoration programme in the Black Sea

May 8, 2014

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.

Remoundou K, Adaman F, Koundouri P, Nunes PALD, 2014: Is the value of environmental goods sensitive to the public funding scheme? Evidence from a marine restoration programme in the Black Sea, Empirical Economics, doi:10.1007/s00181-014-0806-x. Article (subscription required).

 

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