Willingness to pay for drinking water quality improvement and the influence of social capital

The Journal of Socio-Economics 40 (2011) 74–80

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Willingness to pay for drinking water quality improvement and the influence of social capital E. Polyzou, N. Jones ∗ , K.I. Evangelinos, C.P. Halvadakis Department of Environment, University of the Aegean, 81100 Mytilene, Lesvos, Greece

a r t i c l e

i n f o

Article history: Received 22 July 2009 Received in revised form 24 April 2010 Accepted 21 June 2010 JEL classification: Q25 Q51

a b s t r a c t Several factors have been identified as determinants of willingness to pay (WTP), including socioeconomic and environmental elements. The present article aims to investigate the influence of individual social capital on willingness to pay for environmental goods. In particular, through an empirical study, a multi-dimensional measurement of social capital is conducted and its influence on WTP for water quality improvement is explored. According to the results of the survey it is observed that social capital is a significant explanatory parameter of WTP. © 2010 Elsevier Inc. All rights reserved.

Keywords: Willingness to pay Social capital Drinking water quality Protest responses Greece

1. Introduction In the literature of environmental economics several factors have been identified affecting the tendency of individuals to contribute money for the environment (see Mitchell and Carson, 1989; Spash, 2006; Nielsen et al., 2003; Kayaga et al., 2003). These include both socio-economic factors and other parameters connected with environmental behavior (e.g. pro-environmental attitudes). The present article focuses on the influence of social factors and in particular social capital, on willingness to pay (WTP) of individuals for the improvement of drinking water quality. Theoretical and empirical studies regarding social capital have significantly increased in the past decades and the concept has been successfully introduced to environmental policy and management literature. In particular, social capital has been connected to community environmental management, effectiveness of environmental policies and environmental behavior of individuals, with the majority of studies emphasizing its positive influences (Pretty, 2003; Pretty and Ward, 2001; Dev et al., 2003; Cramb, 2005; Jones, 2010). Consequently, it is also interesting to investigate the influence of social capital, as an individual characteristic, on willingness to pay for environmental improvements. Few studies have been presented in the literature connecting social capital with willingness to pay (e.g. Jones et al., 2009,

∗ Corresponding author. Tel.: +30 22510 36245; fax: +30 22510 36205. E-mail addresses: [email protected], [email protected] (N. Jones). 1053-5357/$ – see front matter © 2010 Elsevier Inc. All rights reserved. doi:10.1016/j.socec.2010.06.010

2010; Zhang et al., 2006). In this context the present article aims to examine the influence of several social capital parameters on willingness to pay of individuals through a contingent valuation survey (Mitchell and Carson, 1989). The environmental good being valued is the improvement of tap water quality in an insular community of North Aegean Sea in Greece. In particular, through the study three main issues are investigated. Firstly, monetary valuation for the improvement of tap water quality according to citizens’ preferences. Secondly, the influence of social capital and other socio-economic factors on willingness to pay of individuals; and finally, the connection of social capital with zero and more specifically protest responses. The article is divided in four sections. In the next section a brief review is provided regarding the concept of social capital, followed by a theoretical analysis concerning the influence of social capital parameters on willingness to pay for public goods. In the third part, the methodology of the survey is described analyzing the research area, the questionnaire of the survey, data analysis techniques and characteristics of the sample. In the fourth part, the results of the study are presented and in the final section of the article the main conclusions of the paper are highlighted and discussed. 2. Social capital and its connection to WTP Although no widely accepted definition of social capital exists, the concept has been successfully connected to numerous issues, such as development and economic growth (Sabatini, 2009; Dinda, 2008; Crudeli, 2006; Chou, 2006), health (e.g. Rostila, 2007) and

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environmental management and policy (Dev et al., 2003; Cramb, 2005; Pretty, 2003, 2007). Several components have been identified as indicators of social capital (see Coleman, 1990; Putnam et al., 1993; Putnam, 2000; van Oorschot et al., 2006; Sabatini, 2009), including both cognitive and structural elements (Uphoff, 1998). In the present article four components of social capital will be emphasized due to their connection with WTP issues. Firstly, social trust concerning trust towards people in general or to specific social groups (Uslaner and Conley, 2003). Secondly, institutional trust, referring to trust in institutions functioning in a community (e.g. Government, Local authorities, NGOs) (e.g. Paxton, 1999). Thirdly, social networks and civic participation, relating to the involvement of individuals in formal and informal networks and also their interest for collective issues of their community (Putnam, 2000). Finally, compliance with social norms, hence the tendency of individuals to comply with formal or informal community rules aiming to the protection of the common good (van Oorschot et al., 2006). Consequently, in the present analysis social capital is defined as a multi-dimensional concept consisting of all of the above elements. In order to present a detailed framework explaining the connection of social capital with WTP, the influence of each social capital component will be presented separately. Social trust is regarded as one of the most important components of social capital with significant influence on social norms and social networks. Regarding its connection to environmental preferences, social trust influences individuals’ behavior due to their perception that other members of their community will act in a similar manner aiming on the protection of the common good (Pretty, 2003). Similarly, individual WTP is influenced from the expectation of others people intention to contribute money (Wiser, 2007). Institutional trust is also expected to significantly affect willingness to pay. In case of public goods, trust in institutions (e.g. the state) is important due to their involvement in environmental management. Thus, the tendency of individuals to trust these institutions is connected with the perception for the efficiency of environmental management (Kim, 2005; Beierle and Cayford, 2002). In WTP studies, trust in the actor providing or managing the good being valued determines the level of monetary valuation and acceptance of the hypothetical scenario (Krystallis and Chryssohoidis, 2005; Donahue and Miller, 2006; Johnston et al., 1999). This assumption has also been presented in the literature concerning refusals to pay and in particular protest responses. In these cases, distrust towards the management actor, is regarded as one of the main reasons for citizens’ protests and reluctance to pay (Jones et al., 2008a; Yoo et al., 2001; Whitehead and Cherry, 2007). Concerning social norms, these are strongly linked to social trust and are also associated to WTP issues (Spash et al., 2009; Meyerhoff and Liebe, 2006; Blamey, 1998). The general tendency that has been developed in a community to act for the protection of the common good is expected to influence the decision of individuals to comply with social norms (Pretty, 2003). On the contrary, incidents of noncompliance may imply antisocial behavior (e.g. free-riders) with significant social costs (Corral-Verdugo and Frias-Armenta, 2006). Thus, the existence of strong social norms is linked to the tendency of individuals to protect the interests of their community and consequently their intention to contribute money for environmental protection and improvement. Apart from the cognitive factors of social capital, structural elements have also been identified (Coleman, 1990; Putnam, 2000). These refer to social networks and civic participation. Although no links have been found between structural elements and WTP, there is a theoretical connection concerning WTP for environmental goods. In particular, participation in collective activities is strongly associated with the level of awareness for environmental issues and the tendency to participate in actions for their resolution (Jones, 2010; Wakefield et al., 2006). Consequently, it may be assumed

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that citizens who are more interested in collective issues are also expected to be more willing to pay for public goods. 3. Methodology of the survey 3.1. Aim of the survey Based on the above theoretical assumptions, a survey using the Contingent Valuation Method (CVM) was conducted in the city of Mytilene, in Greece. The study aimed to investigate WTP for the improvement of tap water quality and the influence of social capital parameters on citizens’ decision. Through the survey the effect of social capital on the tendency to pay and the actual monetary valuation were examined. 3.2. Research area The research area was the city of Mytilene, which is the capital of Lesvos Island situated in North Aegean Sea, in Greece. The approximate population of the area is 29,000 inhabitants. This particular area was selected due to the presence of significant problems regarding the quality of drinking water. Although no incidents of poisoning and sickness have been presented, there is a belief among several citizens that tap water should not be consumed, at least not on a daily basis. As a result, a high percentage of citizens purchase and consume bottled water instead of tap water. Furthermore, similar to other Greek islands (e.g. Genius et al., 2008), Mytilene faces problems of water shortage during the summer. In order to confront this problem the majority of households concentrate water in tanks situated in the roofs of houses; a practice which may lead to significant reduction of the drinking water quality. 3.3. Questionnaire of the survey In order to investigate WTP and social capital, a questionnaire was created and distributed to a sample of the population as part of a larger research project. The format of the questionnaire was finalized after the completion of a pre-survey to a non-representative sample of the population. 3.3.1. Environmental behavior and demographic data An initial part of the questionnaire explored environmental practices including the frequency of individuals to drink tap water measured in a 4-scale question (never, sometimes, most times, always). In addition, demographic data were recorded concerning gender, age, education and income level. 3.3.2. Social capital questions A second part of the questionnaire included questions relating to the measurement of social capital. Several measurement techniques and social capital indicators have been proposed in relevant literature (e.g. Sabatini, 2009; Grootaert and van Bastelaer, 2002; Narayan and Cassidy, 2001). In the survey questionnaire four categories of questions were utilized, commonly used in social capital measurement studies. Social trust was estimated through three questions examining both generalized and particularized trust (Narayan and Cassidy, 2001; Uslaner and Conley, 2003) (‘Most people can be trusted or you can’t be too careful’. ‘Most people are fair or try to take advantage of you’ and ‘Do you trust your neighbors’). All questions were measured on a 0–10 Likert scale, where 0 represented the lowest level of trust and 10 the highest. Institutional trust was examined in relation to the good being valued. Thus, trust in three institutions was measured, directly connected to water management: the Government, the Ministry of Environment and the Municipality (see Paxton, 1999; van Oorschot

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Table 1 Confirmatory factor analysis and factor loadings (FL). Social capital factors

Social capital variables

FL

FL with final variable (social capital)

Cronbach’s ˛

Social trust

Generalized trust Fairness Neighbors

0.66 1.06 0.76

0.62

0.83

Institutional trust

Government Ministry of Environment Municipality

0.65 0.85 0.69

0.85

0.81

Compliance with social norms

Tax evasion Bribing Illegal building constructions

0.50 0.67 0.60

0.15

0.61

Civic participation

Member in political party/activity Signed a petition

0.83 0.97

0.08

0.54

et al., 2006). These questions were also measured on a 0–10 Likert scale, with lowest values representing lowest levels of trust. Regarding social norms, the extent to which citizens justify non-compliance was investigated. Three questions were employed, referring to social norms influencing the general functioning of a community: tax evasion, bribing of public officials and illegal building constructions (see Jones et al., 2008b; van Oorschot et al., 2006). All questions were measured on a 5 point Likert Scale where 1 referred to ‘completely justifiable action’ and 5 to the ‘completely unjustifiable action’. Social norms connected with environmental behavior and specifically water use were also examined and measured on a similar scale. These included car washing and washing of external areas (e.g. balconies) with a hosepipe. Finally, the level of civic participation and activation of citizens was measured through two questions. Firstly, whether citizens worked on a voluntary basis with political parties and other organizations and whether they signed a petition in the past 12 months (Rojas and Carlson, 2006). Both questions were selected as they indicate to some extent the collective activity of individuals. 3.3.3. Willingness to pay questions The contingent valuation questions were included in a different part of the questionnaire. In particular, a hypothetical question was presented to respondents. The scenario included the payment of an additional amount to improve the drinking water pipe system of the city and increase the quality of drinkable tap water provided to households. The payment vehicle used was the water bill issued every 2 months. During the pre-survey it was observed that the scenario was regarded as plausible by respondents thus fulfilling a main requirement of the CVM (Mitchell and Carson, 1995; Arrow et al., 1993). After the hypothetical scenario, a WTP question was presented. This specific format was selected, instead of the ‘Willing to Accept (WTA) compensation’ format, in order to avoid the endowment effect where significantly higher valuations emerge for WTA compared to WTP (Knetsch, 1989; Kahneman et al., 1990). In the questionnaire, respondents were asked through a dichotomous format question to declare whether they are willing to pay some amount. In case of a positive answer the respondent proceeded to the WTP question which was open-ended. The open-ended question was selected based on the results of the pre-survey were it was observed that respondents did not encounter problems in stating an amount which may be attributed to the familiarity with the payment vehicle. In case of refusal, respondents were asked to state a justification. This investigation is important in order to distinguish protest responses from true zeros (Meyerhoff and Liebe, 2006; Jorgensen et al., 1999).

3.4. Sample The questionnaire of the survey was distributed to a sample of 152 citizens during the spring of 2009. The selection of the sample was based on a snowballing technique due to time constraints and the unavailability of contact details for the total population. In order to assure the representativeness of the sample the correspondence and relevance of the sampled population was being tested and confirmed throughout the survey with the characteristics of the real population based on the available data from the 2001 census. 43.2% of the sample population participants were male and 56.8% female which is close to the gender distribution of the real population (2001 census data: 48.4% and 51.6% respectively). Regarding educational level, highest percentage was observed among citizens who have completed secondary education (12 years of education: 29.7%) followed by citizens who have completed 9 years of education (16.2%). However, there is no available data for the educational level of the specific area in order to compare them with the sample. Regarding annual income level, most citizens are included in the second and third category (up to 12,000 D : 39.9%, 12,000–30,000 D : 38.5%, 30,000–60,000 D : 8.1%, over 60,000 D : 4.1%) which is close to the estimated average income of the General Secretariat of National Statistical Service (17,500 D ). Finally, the average age of the sample was 34 with the target group being citizens of 18–70 years of age.

3.5. Data analysis Due to the fact that social capital is measured through multiple variables significantly correlated between them, further statistical analysis was conducted. Specifically it was regarded essential to create a total score of social capital for each individual of the sample through the use of Confirmatory Factor Analysis (CFA) (see van Oorschot et al., 2006; Jones et al., 2008b, 2009; Narayan and Cassidy, 2001). Through this statistical process social capital variables were unified in four factors (continuous variables) representing the four components of social capital (social trust, institutional trust, social norms and civic participation). In sequence, these factors were unified in one final variable, also in a continuous format, representing the total stock of social capital for each individual. The statistical process was conducted with the LISREL 8.80 statistical program (Joreskog, 1990, 1994) using the Weighted Least Squares methodology which is appropriate for ordinal variables. All social capital variables presented in the questionnaire were included in the model. In the case of the third factor, only social norms referring to social issues were utilized (tax evasion, bribing of governmental officials and illegal building constructions).

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Table 3 Social capital variables and intention to pay.

Table 2 Frequency of drinking tap water. Frequency of drinking tap water

N

%

Never Sometimes Most times Always

51 29 17 55

33.6 19.1 11.2 36.2

The results of the CFA are shown in Table 1, presenting factor loadings (FL) and Cronbach’s ␣ for all variables included in the model and the new factors created. All factor loadings are statistically significant at 1% level of significance with the highest influence on social capital deriving from institutional trust. Furthermore, fit indices provided by LISREL indicate the good fit of the model (RMSEA < 0.50, accepted levels < 0.60, Adjusted Goodness of Fit Index > 0.90 and Goodness of Fit Index > 0.90, accepted boundaries for both indexes > 0.90).

Social capital

Intention to pay

Trust other people Most people are fair Trust neighbors Trust government Trust Ministry of Environment Trust municipality Work for political party Signed a petition Tax evasion Bribing public officials Building illegal construction Trust Institutions Civic Norms Social capital total score

Yes

No

3.75 (3.10) 3.16 (2.65) 3.67 (2.97) 1.77 (2.53) 2.34 (2.95) 2.61 (2.79) 0.10 (0.31) 0.31 (0.47) 3.26 (1.55) 4.37 (1.24) 4.16 (1.33) 1.95 (2.96) 2.31 (2.49) 1.20 (0.51) 1.05 (0.89) 1.41 (1.32)

2.93 (2.71) 2.87 (2.60) 2.82 (2.73) 1.22 (1.90) 1. 75 (2.25) 1.91 (2.26) 0.07 (0.26) 0.14 (0.35) 3.05 (1.64) 4.46 (1.13) 3.89 (1.44) 1.20 (2.78) 1.68 (2.14) 1.09 (0.57) 0.88 (0.91) 1. 01 (1.24)

4. Results Table 4 Reason of refusing to pay.

4.1. Frequency of drinking tap water

Responses

An initial issue investigated through the questionnaire was the frequency at which citizens drink tap water. According to the results of the study (Table 2), 52.7% of respondents ‘never’ or only ‘sometimes’ drink tap water. However, 36.2% of citizens stated that they ‘always’ drink tap water. 4.2. Intention to pay Regarding the intention of individuals to contribute some amount for the improvement of water quality, only 40% of the sample stated a positive answer. Such percentages of refusal are not uncommon especially in the context of Greek studies (Dziegielewska and Mendelsohn, 2005; Jones et al., 2008a; Menegaki et al., 2007). Concerning the influence of social variables on the intention to pay, by conducting a comparison of means it is observed that citizens who are willing to contribute an amount have higher levels of social capital. In Table 3, mean average scores for each group of people are presented with standard deviation included in brackets. In particular, as observed in Table 3, the group of people who responded positively and are willing to pay an amount present higher mean scores in all social capital parameters, except for the case of bribing public officials. Similar assumptions are presented both for the social capital aggregated factors and the social capital total score extracted from the CFA (5 last variables in the Table). Thus, citizens who are unwilling to pay for the improvement of drinking water quality have lower ‘stocks’ of

I cannot afford it The state is responsible to pay I don’t trust governmental management I don’t regard that water quality improvement is necessary I already pay enough through taxes Other

N

%

14 38

17.9 48.7

39

50

4

5.1

40

51.3

2

2.6

social capital. However, these mean differences are not statistically significant. 4.3. Reasons of refusal Concerning the reasons for refusing to pay, the most common justification is that citizens regard that they already pay enough through state taxes (51.3%). Furthermore, half of the sample stated that the management from the local governmental actors is not efficient and 48.7% declared that such expenditures are the responsibility of the state (Table 4). All these responses were regarded as

Table 5 Linear regression: variables influencing WTP. Model 1

(constant) Social capital Trust government (institutional trust) Signed a petition Justifying tax evasion Most people can be trusted (social trust) Justifying washing with hosepipe Age Income level Educational level Number of household members Drink tap water

Model 2

Model 3

B

p-Value

B

p-Value

6.023 2.332 – – – – – – – – – –

0.002 0.022 – – – – – – – – – –

−0.378 2.220 – – – – – −0.041 1.315 0.687 0.898 –

0.964 0.048 – – – – – 0.791 0.436 0.501 0.531 –

Model 1—R2 : 0.08, model 2—R2 : 0.09, model 3—R2 : 0.35.

B

p-Value

−13,774

0.115

1.330 −3.313 2.511 0.539 2.662 −0.162 3.993 0.033 −0.115 −0.303

0.03 0.342 0.003 0.318 0.003 0.275 0.020 0.974 0.888 −0.769

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protests because they are connected with elements of the hypothetical scenario (see Jorgensen and Syme, 2000; Jorgensen et al., 1999). On the other hand, reluctance to pay due to budget constraints and the belief that there is no need to improve water quality were regarded as true zeroes (Table 4). 4.4. Willingness to pay and the influence of social variables Regarding the monetary valuation of water quality, the amounts declared in the survey ranged between 0 and 50 D and the average mean amount for the total sample was 4.65 D (standard deviation: 9.56). However, it is regarded as appropriate to exclude from the WTP estimation all protest responses, as they are not true zero valuations (see Meyerhoff and Liebe, 2006; Jorgensen et al., 1999). Thus, by excluding protest responses the average mean amount for the total sample increases to 10.38 D (standard deviation: 12.01). In order to explore the influence of social and other factors on the decision of individuals to pay for water quality improvement, linear regression models were conducted excluding protest responses. As the main purpose of the study was to investigate the influence of social capital on WTP, the first regression model utilized only the total score of social capital extracted from the CFA as an independent variable (Model 1). From the results of the regression it is observed that social capital is a statistically significant variable explaining WTP (Table 5). Thus, higher ‘stocks’ of social capital indicate also an increased monetary valuation for the improvement of water quality. In the second model additional variables were included concerning demographic data. As observed from Table 5, social capital remains a statistically significant explanatory variable. Consequently, individuals with higher levels of social capital also present a tendency to state higher amounts. However, none of the demographic variables explain WTP. In the final model (Model 3), the influence of certain social capital variables on WTP was examined. As social capital variables included in each factor are significantly correlated between them, one variable from each factor was included in the third regression model. Furthermore, two additional variables were introduced in the model: the frequency of drinking tap water and the extent to which citizens justify the washing of external areas with a hosepipe. As shown in Table 5, the R2 in this model is increased and WTP is explained by several variables: trust in government, the extent to which citizens justify tax evasion, the extent to which citizens regard the washing of external areas with a hosepipe as justifiable and income. All these variables are positively connected with WTP. Consequently, respondents who tend to trust the government, regard non-compliance with social norms as unjustifiable and have a higher income tend to attribute a higher value for the improvement of drinking water quality. In Table 5 all three models are included with statistically significant variables presented in bold and italics. From the results of the third model it is also observed that the frequency of drinking water does not influence WTP. In order to further explore this issue a comparison of means is conducted in each category of frequency of behavior. In particular, it is observed that citizens who always drink water from the tap are the most willing to pay (12.69 D ). Significantly lower valuations were declared from citizens who never drink tap water (9.43 D ). Furthermore, citizens who stated that they sometimes drink water are willing to pay 7.5 D and those who drink most times are willing to pay 2.57 D . Nevertheless, these mean differences are not statistically significant. 5. Discussion and conclusions The present study aimed to estimate citizens’ monetary valuation for the improvement of tap water quality and investigate the

influence of social capital parameters on this valuation. According to the empirical results, citizens are willing to pay, on average, 10.38 D every 2 months for the improvement of drinking water quality. The payment vehicle utilized in the study was the water bill. The monetary valuation is relatively high when compared to the current municipal water tax and it is close to results of other national and international studies (e.g. Genius et al., 2008; Cho et al., 2005). Several parameters were investigated as explanatory for individuals’ monetary valuation. Specifically, income is a significant explanatory variable revealing that citizens with a higher income present also higher valuations for the improvement of drinking water quality. It is also interesting to observe that the frequency of drinking tab water does not influence WTP. This issue should be further explored through future research as individuals who avoid drinking tab water have additional expenditures do to the purchase of mineral water. Regarding the influence of social capital as a total stock, through the regression models it was shown to be an important parameter explaining WTP of individuals. Thus, citizens with higher levels of social capital also state higher amounts. This assumption may be explained by the theoretical analysis outlined in the second part of the article indicating the possible connections of social capital parameters with WTP and valuation of environmental goods. The total social capital indicator is useful because social capital variables present significant interconnection between them. In addition, when investigating the influence of specific social capital parameters, institutional trust and social norms remain the most significant factors influencing WTP. The level of institutional trust is connected with WTP as higher levels of trust indicate also a tendency to regard governmental management as efficient. Consequently, citizens are more willing to accept changes proposed by this institution and present higher valuations for the improvement of water quality. In addition, the tendency of an individual to comply with social norms and protect the common good is also influencing his/her tendency to pay for the environment. Despite the above assumptions an important issue is that only 40% of the sample is willing to pay any amount. This result is in contrast with the fact that almost half of the population currently avoids to drink tap water. Nevertheless, high levels of reluctance have been presented in previous studies conducted in Greece and Mytilene in particular (e.g. Jones et al., 2008a; Menegaki et al., 2007). The justification provided by respondents for being reluctant to pay is based on several issues. Firstly, they regard that they already pay enough taxes which may also be combined with the general perception in Greece that state tax management is inefficient. A second reason highly linked with the above, is the protest for the management actor included in the payment vehicle. The reluctance of citizens derives from the fact that they regard governmental management as inefficient and is also combined with the low levels of institutional trust in Greece (Jones et al., 2008b). Nevertheless, management of environmental goods in Greece is mainly the responsibility of the state and the utilization of a different actor in the hypothetical scenario would possibly affect its plausibility. The third reason explaining citizens’ unwillingness to pay is in disagreement to the previous justifications. This refers to the perception that the state is responsible for the management of public goods. Thus, although citizens tend to distrust the state, they regard at the same time that it is the responsibility of the state to take such initiatives forward. This perception may be explained by the socio-political characteristics in Greece where a strong statism culture is accompanied with low levels of awareness and participation of citizens in actions for the resolution of environmental problems (Tsoukalas, 1995; Lekakis, 1995; Jones et al., 2008b). Furthermore, through the results of the study it is observed that citizens with higher ‘stocks’ of social capital are more positive in contributing money. Although no statistically significant relationships were observed, higher means were noted among indi-

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viduals who were willing to pay for the improvement of drinking water. This is may be connected with the fact that social capital parameters also measure the level of distrust towards the state. Finally, although several issues were investigated through this survey, some limitations exist. Firstly, there was no reference to different types of social capital (e.g. bonding, bridging and linking, see Sabatini, 2009) or to ‘good’ and ‘bad’ aspects of social capital. Secondly, there were some limitations regarding social networks where usually both formal and informal connections are measured (e.g. Putnam, 2000; Sabatini, 2009). Despite the above limitations, the present paper aimed to investigate the influence of certain social capital parameters and total ‘stocks’ of individual social capital on willingness to pay for environmental goods. The results of the study are important for future research exploring the economic valuation of public goods and the resolution of biases in CVM studies, such as protest responses. In particular, the inclusion and measurement of social capital parameters in CVM studies will assist researchers to improve the hypothetical scenarios utilized and to further understand the reasons leading to citizens’ monetary valuation. Acknowledgements Funding for this work was provided by Athens International Airport S.A. The authors are indebted to Philippa Harris for her proofreading of the English. References Arrow, K., Solow, R., Portney, P.R., Leamer, E.E., Radner, R., Schuman, H., 1993. Report of the NOAA panel on contingent valuation. National Oceanic and Atmospheric Administration 58, 4602–4614. Beierle, T.C., Cayford, J., 2002. Democracy in Practice. Public Participation in Environmental Decisions. Resources for the Future, Washington, DC. Blamey, R.K., 1998. Decisiveness, attitude expression and symbolic responses in contingent valuation surveys. Journal of Economic Behavior and Organization 34, 577–601. Cho, Y., Easter, K.W., McCann, L.M.J., Homans, F., 2005. Are rural residents willing to pay enough to improve drinking water quality? Journal of the American Water Resources Association 41, 729–740. Chou, Y.K., 2006. Three simple models of social capital and economic growth. Journal of Socio-Economics 35, 889–912. Coleman, J.S., 1990. Foundations of Social Theory. Belknap Press of Harvard University Press, Cambridge, Massachusetts/London, England. Corral-Verdugo, V., Frias-Armenta, M., 2006. Personal normative beliefs, antisocial behavior, and residential water conservation. Environment and Behavior 38, 406–421. Cramb, R.A., 2005. Social capital and soil conservation: evidence from the Philippines. The Australian Journal of Agricultural and Resource Economics 49, 211–226. Crudeli, L., 2006. Social capital and economic opportunities. Journal of SocioEconomics 35, 889–912. Dev, O.P., Yadav, N.P., Springate-Baginski, O., Soussan, J., 2003. Impacts of community forestry on livelihoods in the Middle Hills of Nepal. Journal of Forest and Livelihood 3 (1), 64–77. Dinda, S., 2008. Social capital in the creation of human capital and economic growth: a productive consumption approach. Journal of Socio-Economics 37, 2020–2033. Dziegielewska, D.A.P., Mendelsohn, R., 2005. Valuing air quality in Poland. Environmental and Resource Economics 30, 121–163. Donahue, A.K., Miller, J.M., 2006. Experience, attitudes and willingness to pay for public safety. The American Review of Public Administration 36, 395–418. Genius, M., Hatzaki, E., Kouromichelaki, E.M., Kouvakis, G., Nikiforaki, S., Tsagarakis, K.P., 2008. Evaluating consumer’s willingness to pay for improved potable water quality and quantity. Water Resources Management 22, 1825–1834. Grootaert, C., van Bastelaer, T., 2002. Social capital: from definition to measurement. In: Grootaert, C., van Bastelaer, T. (Eds.), Understanding and Measuring Social Capital: A Multidisciplinary Tool for Practitioners. World Bank, Washington, DC, pp. 1–16. Johnston, R.J., Swallow, S.K., Weaver, T.F., 1999. Estimating willingness to pay and resources tradeoff with different payment mechanisms: an evaluation of a funding guarantee for watershed management. Journal of Environmental Economics and Management 38, 97–120. Jones, N., Malesios, C., Sophoulis, C.M., 2008a. Economic valuation of coastal water quality and protest responses: a case study in Mitilini, Greece. Journal of SocioEconomics 37 (6), 2478–2491.

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