Erosive runoff events in the European Union: Using discrete choice experiment to assess the benefits of integrated management policies when preferences are heterogeneous

This paper assesses the value of mitigating erosive runoff events in a severely prone watershed of France using a discrete choice experiment approach. Good farming practices are integrated together with flood protection programs within a common management policy. The inclusion of risk exposure and socio-demographic variables in a random parameter logit model allows accounting for both latent and observed heterogeneity in preferences. Results show substantial benefits for each of the management alternatives valued. Results also identify that preferences significantly vary across respondents which suggests that policy makers should consider heterogeneity in preferences when designing policies for various area profiles in order to closely monitor welfare improvements. (C) 2014 Elsevier B.V. All rights reserved.