Investigating distance effects on environmental values: a choice modelling approach *

Analysis of the relationship between distance and willingness to pay (WTP) is important for estimation and transfer of environmental benefits. Several contingent valuation (CV) studies have investigated this topic, but results are mixed. This paper describes a choice modelling (CM) application that estimates distance effects on parameters of three environmental attributes. Combinations of these attributes create different management policies for native vegetation. The CM study is based on a sampling procedure that provides a geographically balanced sample and statistical tests to choose the best specification of the distance-WTP relationship. Welfare analysis shows that disregarding distance causes under-estimation of individual and aggregated benefits and losses, seriously misdirecting resource allocation. Copyright 2007 The Author Journal Compilation 2007 Australian Agricultural and Resource Economics Society Inc. and Blackwell Publishers Ltd .