Examining Demand for Urban River Rehabilitation in Indonesia : Insights from a Spatially Explicit Discrete Choice Experiment

The demand for urban river rehabilitation can be measured through stated preference surveys such as choice experiments, providing information on the welfare estimates of a particular approach. We deploy such a technique in the context of plans to rehabilitate a major river in Jakarta, Indonesia. The current plan focuses on widening and canalizing the downstream segment of the river, but we hypothesize that residents would demand (and thus be willing to pay for) additional components of an ecological rehabilitation program in the form of riverside park space and upstream forest conservation outside of the city. We develop a spatially-explicit discrete choice experiment in which households register their preferences for channel widening, park space, forest conservation, and a monthly fee to fund the rehabilitation. Using mixed logit models we find significant and substantial demand for both park space and forest conservation, with a lower bound on the total willingness to pay (WTP) of greater than US $4 million per year for park space and nearly US $6 million per year to support reforestation in the upper catchment. These estimates are based on households within the catchment, but we find that demand did not seem to decay with distance so the upper bound on total WTP could be substantially higher. We also find that household income level has a strong effect on marginal WTP for forest conservation, minimal effect on marginal WTP for park space, and that location along the river influenced WTP for park space and channel widening. This provides further evidence that there is substantial demand for river rehabilitation in developing world cities, and that choice experiments can provide information relevant to land use planning