Parámetros que definen la geometría del mástil

Drinking Water Sewerage/ Lake Balaton Other Rivers and Groundwater

Sanitation Lakes

33% 56% 3% 7% 1%

Figure 5.1: Hypothetical public expenditure distribution, 1996 (HUF1,707 billion)

Finally, in order to make these results resemble a WTP a n s w e r , a last question introduced the possibility of a tax cut due to a reduction of HUF3.5 billion in

Note that the initial budget reallocation questions are not comparable to the CV WTP question: they do not imply a monetary cost to the individual directly but simple a reallocation o f existing funds between possible areas o f expenditure. What is then being evaluated is the optimality o f the initial

administrative costs. Respondents were asked to choose one o f four alternatives: (i) reduce the total tax burden; (ii) allocate the surplus money to the BCUP; (iii) allocate the surplus to other areas o f public expenditure or; (iv) a combination o f all these options. A vote for any category apart from the tax cut constitutes an indirect payment for the chosen purpose (although obviously not a maximum WTP). After some adjustments, it can be seen that approximately 52% o f respondents preferred the money to be allocated to the Balaton, which in essence constitutes a tax cut refusal; 20% chose the tax cut and a further 22% would like to see the money allocated to other areas.

How should these results be interpreted? In the national survey, the valuation exercise showed that only 16% of respondents refused to pay any positive amount for water quality improvements at the Balaton, with the remaining 84% stating a positive WTP. On the whole, the surveyed population was willing to pay up to 1% of their annual income for the proposed clean-up operation. This means that not only does there exist a clear positive benefit o f the proposed programme but also that the large majority of respondents, though naturally disliking paying taxes, do not reject wholly the proposition that they might pay more for environmental purposes.

The budget reallocation exercise shows that, on the whole, 74% of the population is willing to forego some monetary gain to contribute to extra spending in some area (52% mention the BCUP as the preferred area although that result is almost certainly biased upwards by the asymmetric amount of information provided about Lake Balaton versus other possible options). Considering the margins of errors in both approaches this is indicative o f the fact that the estimate of an 84% acceptance rate of a tax increase specifically for the Balaton may be only very slightly biased upwards. Budget reallocation exercises o f this kind can provide a benchmark against which to compare the number o f protest answers and indicate the relative importance o f the proportion of the population that may object to paying more taxes as a way to finance particular causes.

resource allocation between competing uses which is a different matter altogether. But if a surplus can be created in a way that none of the existing areas of interest are impoverished (by reducing bureaucracy, for example) and respondents can choose between a tax cut or an application in some public area of interest, that constitutes in a sense an indirect payment and is thus comparable with a willingness to contribute any positive amount.

5.8 Conclusions

The main purpose of this study has been to illustrate the potential o f contingent valuation, formulated within the general NOAA framework, to estimate the total benefits that Hungarian citizens derive from water quality improvements at Lake Balaton and to explore the scope for generating additional fimds for remedial and preventive conservation actions. For that purpose, three different fimding possibilities were explored. These were an increase in general tax levels affecting all Hungarian tax-payers, an increase in local taxes applicable mainly to residents and second-home owners in the Balaton neighbourhood and an increase in local tourist daily taxes. The results show that water pollution is perceived as the most serious environmental problem in Hungary and that the economic benefits from water quality improvements at Lake Balaton are likely to be substantial. The related externalities would be better captured by an increase in the national tax level affecting all tax-payers. Hungarians are willing to pay an average of HUF3,900 (1995 US$27) every year for clean-up operations, which corresponds approximately to 1% of net annual earnings. Implementation of such a mechanism would substantially increase the effectiveness of efforts to protect Lake Balaton.

The study also shows that referendum contingent markets in a transition economy seem to perform as well as in Western countries, for similar goods. By carrying out a budget reallocation exercise, the survey showed that a large majority o f Hungarians are willing to forego a tax cut in order to finance a number o f areas of public expenditures. The implication is that taxes seem, on the whole, to be an acceptable mechanism to finance and redistribute resources. This indicates that Hungarian consumers have been able to quickly adjust from a centrally planned economy to the opposite side of the spectrum of hypothetical markets. The issue remains whether public preferences are seen as being informative and useful as a basis for public decision-making in Hungary