Using multi-criteria analysis to explore non-market monetary values of water quality changes in the context of the Water Framework Directive

The EU Water Framework Directive represents a major change in the management of water resources and sets ambitious ecological objectives for all European waters. In the Directive, the economic assessment of the non-market environmental benefits of water quality improvements plays a crucial role. Studies valuing these benefits are now appearing in the literature, applying stated preference valuation techniques. However, these techniques are often criticized for providing only narrow mono-criterion information to the decision-making process. The research presented here builds on a recent line of investigation that combines monetary stated preference tools, in this case a choice experiment, with multi-criteria analysis, in this case the Analytical Hierarchy Process (AHP). We argue that the AHP can contribute to a better understanding and interpretation of the choice experiment results by exploring the criteria involved in respondents' trade-off between the attributes. The AHP provides relevant insights for the application of use-based water quality ladders in the valuation of environmental benefits in the context of the WFD. Results also show the importance of the spatial dimension of preferences for water quality. (c) 2010 Elsevier B.V. All rights reserved.