An evaluation of the natural environment ecosystem preservation policies in Japan

Abstract In this study, we evaluate the Japanese biodiversity conservation policy using a set of choice experiments. We use a random parameter logit model and a latent class logit model to assess the marginal willingness to pay for environmental protection. The main results are as follows. First, we show that respondents clearly exhibit heterogeneous preferences regarding the biodiversity conservation policy. Therefore, a conditional logit model, which assumes the same parameters for all respondents, overestimates the marginal willingness to pay for biodiversity conservation. Second, using the random parameter logit model, we show that the marginal willingness to pay for a 1% improvement in forest conservation is 196 yen; 2,357 yen for farmland conservation; 85 yen for natural parks protection; 1,113 yen for wetland conservation; and −132 yen for endangered species protection. Third, using the latent class logit model, we identified 14 categories of respondents and showed that the utility parameters are significantly different across classes. Therefore, we expect a high probability of conflict in the implementation of biodiversity conservation policies due to substantial differences in the preferences of agents.