Urban Forestry & Urban Greening 10 (2011) 119–126

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Urban Forestry & Urban Greening

journal homepage: www.elsevier.de/ufug

Urban stream restoration in Korea: Design considerations and residents’

willingness to pay
Hyunhoe Bae ∗
Department of Public Administration, School of Public and International Affairs, North Carolina State University, Campus Box 8102, Raleigh, NC 27695-8102, United States

a r t i c l e i n f o a b s t r a c t

Keywords: Urban streams in Korea, which until recently were channeled and served only flood control functions,
Conjoint analysis have increasingly attracted attention for their potential as urban parks or residential open spaces. Con-
Flood stability sequently, urban stream restoration has been booming and a number of restoration projects have been
Natural attribute
carried out since 1990s. However, increased flash flood risks created by climate change are reigniting
Recreational attribute
controversies regarding the vulnerability of restored streams to flooding. Furthermore, implementation
issues including landscape/greening and facility design considerations have been under-investigated.
This study explores these ongoing issues associated with urban stream restoration in Korea, as well
as attempts to estimate consumers’ willingness to pay for the restoration process. In particular, this
study estimates the partial values of natural and recreational attributes of urban streams, which can be
improved through various types of urban stream restoration measures, using conjoint analysis. The find-
ings indicate that improving natural attributes by transforming existing concrete-encased streams into
natural state streams increases the value of an urban stream by about 50 USD per household. Improving
recreational attributes, either by creating a walkway where there is no bank or by expanding facilities
to the existing walkway, increases the value of an urban stream by about 25 USD per household. These
estimated partial values of urban stream attributes imply the relative importance of each attribute and
suggest policy implications for priority setting and trade-offs in urban restoration projects.
© 2011 Elsevier GmbH. All rights reserved.

Urban stream restoration in Korea
Since 1990s, sustainable development has been an important
topic in most political arenas, and the agenda has been expanded
to the protection of environmental amenities and recreational
resources in metropolitan areas, which are important elements
of “urban sustainability” (Wheeler, 2000). Despite increasing
demands for environmental amenities, it is becoming more difficult
to reserve or supply land for parks or open spaces in metropolitan
areas with high population densities. Because available open spaces
are limited, financing and land for new park development in exist-
ing urban areas is extremely costly and burdensome to the local
and central governments of metropolitan areas. Accordingly, new
green spaces have mainly been provided through new suburban
development planning (Bullock, 2008). However, more attention
has been paid to utilizing existing open spaces in urban areas,
which have often deteriorated or been abandoned, by improving
their quality as urban green spaces. Improving existing under-
developed or under-maintained urban open spaces can generate
significant social benefits, even more than developing new open
∗ Tel.: +1 919 515 8265; fax: +1 919 515 7333.
E-mail address: hbae4@ncsu.edu
spaces. Bullock (2008) found that the quality of open spaces really
matters, as well as the quantity of open spaces, and improving
existing, degraded urban open spaces by enhancing naturalness,
community amenities, or facilities for recreational activities can
increase their value significantly.
The most salient potential for improving under-utilized open
spaces in Korea might be found in urban streams. Most streams in
urban areas in Korea have been channeled and directed into con-
crete canals for the purpose of flood prevention. Although this may
have eliminated the dangers of flooding, it has also eliminated space
for stream-related recreational activities and excluded the function
of urban streams as an important environmental amenity. In most
cases, wide bank areas, which were reserved as a precautionary
measure against flooding, have been abandoned and not utilized
for any other purpose, although flooding is likely to happen only in
the short, summer rainy season. Instead, these areas could be used
as urban green spaces if they were transformed or improved to the
status of neighborhood parks for the public to enjoy. Utilizing exist-
ing urban stream banks is expected to cause less financial burden
to local governments than the development of a new park which
often requires costly purchase of private property in urban area.
Furthermore, urban streams have great potential for building a
green space network for an entire city (Baschak and Brown, 1995;
Asakawa et al., 2004). For instance, urban streams in Seoul, which

1618-8667/$ – see front matter © 2011 Elsevier GmbH. All rights reserved.
doi:10.1016/j.ufug.2011.02.001
120 H. Bae / Urban Forestry & Urban Greening 10 (2011) 119–126
originate in the mountain area located in the outer part of the city,
run into the center of the city and join the Han River, the major
waterway that passes through the middle of the city. A total of 35
urban streams in Seoul are all linked and accessible to one another
through the Han River, and can be integrated into a single, complete
independent network. However, these continuous green corridors
and network systems are often disconnected by roads or buildings
resulting in green islands (Gilbert, 1989). If the blocking obsta-
cles from human urban activities are rearranged and stream sides
are supported by an adequate alternative transportation function,
such as a cycle paths, urban streams will contribute to reducing
automobile use which is one of the components to building urban
sustainability (Wheeler, 2000)
Accordingly, the recent trend of river and waterway manage-
ment clearly shows the surge of efforts for “rehabilitation of rivers”
(De Waal et al., 1998). River rehabilitation or restoration, which was
originally started to deal with local environmental problems such
as degradation of water quality and ecosystem in Western Europe,
has become one of the top priority agenda in water management
in many countries (especially in developed countries) since 1980s
(Nienhuis and Leuven, 2001). The primary goals of the rehabili-
tation projects include enhancing ecosystem and modifying the
riparian landscape to a more natural state (Yrjana, 1998). While
the first wave of rehabilitation efforts has traditionally focused on
riparian habitats of wildlife and biodiversity in river corridors or
flood plains (Petersen et al., 1992; Petts and Calow, 1996; Downs
et al., 2002), the recent trend shows socio-economic factors act
as an underlying driving force and local residents are key stake-
holders in river restoration projects, which highlights the function
of the urban watershed as a “human habitat” (Wheeler, 2000;
Merrick and Garcia, 2004; Adams et al., 2005; Ryan and Klug, 2005).
In particular, ecological improvements to urban streams, such as
restoring streams to a natural state without channelization or redi-
rection, have been justified by urban residents’ increasing demands
for green spaces where they might have ecological experiences,
recreation and education (Bolund and Hunhammar, 1999; Paul and
Meyer, 2001; Merrick and Garcia, 2004). In essence, urban streams
have great potential to function as a key part of an urban green
infrastructure providing valuable ecosystem services to urban res-
idents.
Along with this global trend, the recent environmental planning
in Korea also shows a great attention to restoration and improve-
ment measures for urban stream areas. Recently, not only the
central but also local governments in Korea have begun actively
initiating urban stream restoration plans to improve urban stream-
sides. The first trial can be found in the Yangjae stream in 1997. This
stream is located in the southeast part of Seoul where land value is
the highest, not only because of its high-valued residential property
but also because of the development of its quasi-business district.
The residents near the Yangjae stream have the highest income
level in Korea, and accordingly, have a high demand for quality
green spaces. The Yanjae stream restoration project was initiated as
an alternative to satisfy this high demand for green spaces without
creating the inevitable huge financial burden with the development
of a new park in this area. This project has been assessed as one
of the most provocative and successful urban stream restoration
projects.
Following this project’s success, a number of projects have been
carried out since 1990s to replicate it. For instance, the Seoul
Metropolitan government conducted the Bulkwang restoration and
improvement project as a part of 2002 World Cup stadium and park
construction plan, which was completed in 2001. Local govern-
ments in Korean small cities have also actively implemented urban
stream restoration projects. As a result, urban stream restoration
projects in each jurisdiction have been one of the typical promises
in political election campaigns throughout the country.
Although some projects driven by small, local governments
often ended up with superficial improvements such as opening
accessibility to streams without involving any substantial improve-
ment, the most recent urban stream restoration projects involved
one or both of two typical improvement measures. The first mea-
sure is to improve the natural attribute of urban streams by
replacing concrete-block with natural stones and greening through
appropriate river basin vegetation. This process restores urban
streams to a more natural state, and is expected to provide intensive
environmental amenities as well as serve an effective function as
a natural/ecological park. The second measure is to enhance recre-
ational attributes by providing open space facilities at streamsides,
such as walkways/trails or sports/exercise facilities to support var-
ious recreational activities.
Re-emerging flood risk
Although urban stream restoration has become one of the key
topics in water management and land use planning in Korea, there
are still ongoing controversies associated with restoration projects.
First of all, there are still considerable concerns about the vul-
nerability of restored streams to flooding. Included in the Asian
monsoon region, Korea has extreme variations in seasonal pre-
cipitation rate. Although Korea has consistent and manageable
precipitation during most of the year, precipitation levels dur-
ing the rainy, summer season are intensively high, often causing
increased and frequent peak/overbank flows in urban streams.
This flooding often becomes worse because of typhoons that pass
through Korea during the summer.
Furthermore, Korea has recently experienced an increased risk
of flash floods, including 500 year-big floods, with two such flood
occurring in consecutive years (2001–2002), as a result of climate
change and urbanization (Gregory and Chin, 2002). For instance,
typhoon Rusa that passed the Korean peninsula in summer 2002
caused 128 deaths and US $1.66 billion in economic losses. Con-
sequently, this is reviving flood control function issue of urban
streams in Korea. Although urban streams stay dry or maintain
minimal water levels most times, these extreme fluxes during the
summer rainy season or typhoons makes it essential to consider
the area’s food stability in urban restoration projects.
However, the early stage rehabilitation trials often fail to incor-
porate full consideration of the increasing severe weather trend in
their stream restoration plan, not only leading to significant dam-
age to the rehabilitated park itself, but also causing more intensive
impact from the flooding on the nearby area than prior to the mod-
ifications. For example, Onchun Stream, which has been one of the
most successful/salient rehabilitation projects in Busan (the second
largest city in Korea), overflowed during the 2006 typhoon Ewiniar,
causing severe damage in the neighboring area.
It is known that the ecological rehabilitation/greening that
incorporates eco-material such as plants, trees, logs and stones
in the stream restoration process increases the risk of flooding
(Woo et al., 2005). Vegetation and ecological corridor planning used
for restoration projects are particularly vulnerable to typhoon-
type precipitation because those features increase the time it takes
water to reach downstream land, raising flow increase rates (Shin,
2007). Shin clearly points out that recent frequent and active
restoration projects on urban streams increased the flood risk sig-
nificantly in Korea. Furthermore, restored urban streams have been
under-perceived by the public for their flood hazard. Local gov-
ernment and planning departments are not providing sufficient
guidelines against flash floods for residents and are not taking
any precautionary actions. Therefore, disaster management with
reliable flood control plan should be the key principle for stream
channel management and should gain priority in urban restoration
projects.
 H. Bae / Urban Forestry & Urban Greening 10 (2011) 119–126
The re-emerging issue on vulnerability of restored streams
to flooding does not necessarily undermine the importance of
urban stream restoration. In many cases, stream restoration can
still secure flood control function if a hydraulic engineering
approach is incorporated into the project (Woo et al., 2005). Recent
river/stream management studies are focusing on how to secure
stability against flood in restoration projects. Several studies in
hydraulic engineering recently have been conducted to develop
a more flood-stable restoration approach and to build an infras-
tructure database for channel design and vegetation guideline with
Korea-specific perspectives (Rhee et al., 2008; Kim and Lee, 2009).
Accordingly, although the very early stage of trials overlooked
hydraulic engineering to manage flood risk, recent restoration
projects show active adoption of various flood-resistant engineer-
ing techniques in stream channel design, which were developed by
private construction contractors, as well as hydraulic engineering
research incubators (Korea Institute of Construction Technology,
1999; Yusin Cooperation, 2000).
Vegetation
Vegetation is one of the key components of urban stream
restoration to increase its natural and esthetic attributes. How-
ever, formulating and maintaining planting/vegetation is not easy
because it requires consideration of not only the usual factors for
general open space design such as ground-level ecological capac-
ity and residents’ preference, but also plants’ hydrophilic aspects.
To be selected for stream basin vegetation, plants and vegetation
should not be easily washed away during flooding and have a high
survival rate even with extended submergence.
Furthermore, riparian vegetation has been known to increase
the risk of flooding by narrowing the stream width and increas-
ing flow resistance, thus reducing velocity of flow and decreasing
discharge rate to downstream. This is the key feature that partic-
ularly makes restored urban streams more vulnerable to floods
than concrete-encased/channelized streams. Thus, the choice for
types of greening and vegetation is limited to those that have
minimum interference with water flow during floods and max-
imum survival length during submergence. Feasible vegetation
in the context of Korea can be found in Salix spp. L., Salix pseu-
dolasiogyne H.Lév., Salix babylonica L., Iris ensata var. spontanea
(Makino) Nakai and Fraxinus rhynchophylla Hance as trees. For
shrub, Phragmites Trin., Salix gracilistyla Miq. and Miscanthus sac-
chariflorus (Maxim.) Hack. have been widely adopted. Aster yomena
(Kitam.) Honda, Imperata cylindrica P.Beauv., Zoysia matrella Merr.,
Pennisetum alopecuroides Spreng. and Phragmites communis Trin.
are the most common and feasible types of grasses (Ministry of
Construction and Transportation, 1998; Yusin Cooperation, 2000;
Korea Institute of Construction Technology, 1999).
Particularly, interference with stream flow during floods
depends not only on types of vegetation itself, but also on its
growth pattern, which determines “roughness” of channel (Chow,
1959). The hydraulic engineering approach is required in a green-
ing/vegetation plan with full consideration on all associated factors
such as height, density and flexibility of leaves and stems, and root
elements of vegetation.
Water quality, landscape design and trade-offs
Harashina et al. (1989) found that perception of water quality
is one of the key components that determine residents’ prefer-
ence of the urban stream corridor. Despite the potential of urban
streams as aquatic habitats, there has been relatively less empha-
sis on water quality and ecological sustainability in rehabilitation
projects in Korea. As pointed out previously, most urban streams
in Korea have extreme variations of flow level and remain dry or
121
maintain low water flow except during the summer rainy season.
Although improving water quality is essential for its environmen-
tal amenity, it is often infeasible because it requires consistent
water flow, which is not likely during the dry season. Large-scale
restoration projects driven by central or major city governments
occasionally incorporate artificial increase of water flow to secure
appropriate levels of water amenity. For instance, the 2005 Cheong-
gye stream project, which was the one of the largest projects in the
past decade funded by Seoul metropolitan government, included
the measure to provide an artificially consistent water flow, which
released 120 million liters of tap water into the stream using
110,000 kWh electricity per year. However, using artificial water
flow to improve water quality is not only controversial because of
its excessive resource consumption, but is also impossible in most
small scale projects funded by local governments because of their
limited resources.
Accordingly, water quality or water flow issues have been
dropped in most urban stream restoration projects, thereby min-
imizing them at the very preliminary level to include minor
changes such as construction of walkway paths without signifi-
cant improvements. Most previously exercised restoration plans
located bicycle paths and tails on riverbanks, although the com-
plete bicycle path system separated from the walkway or road
is found only in certain major large scale projects. Moreover,
most projects driven by small local government often have not
been equipped with the appropriate level of facilities congruent
to urban neighborhood parks, such as lamps or bridges with dis-
ability access. In addition, although concrete-channelized streams
converted into natural state streams seems a key part of rehabil-
itation, small local governments often face too limited resources
to accommodate this aspect in their plan. Several projects adopted
by small local governments often focus on enhancing recreational
attributes and keeping the concrete-encased canal, which is rela-
tively less expensive. In contrast, the Cheonggyecheon restoration
project funded by the Seoul metropolitan government includes the
expected issues as well as restoration of historic relics such as the
former dynasty’s stone bridge (Gwanggyo), which traces back to the
1400s.
In essence, although improving natural and recreational
attributes are two key common components in urban stream
restoration projects, as pointed out earlier, there is a wide variety
of the types and levels of improvements in previously imple-
mented projects. For future plans, local governments often face
the situation where they cannot incorporate improvements of
both attributes and must set priorities/trade-offs among key com-
ponents and their appropriate levels because of their budget
constraints. Thus, the next section of this study tries to estimate
the partial value of natural and recreational attributes of an urban
stream that can be obtained through various types of improve-
ment measures. Through estimating partial values of each attribute
at various levels and comparing them, this study tries to suggest
policy implications for value-maximizing restoration plans and pri-
ority setting/trade-offs among natural and recreational attributes.
Estimation of part-worths of urban stream attributes using
conjoint analysis
This section estimates the partial values, or part-worths, of the
natural and recreational attributes of an urban stream. The tar-
get urban stream is the Hong-je stream, which runs through the
northwestern part of Seoul. Estimating the value of urban streams
requires particular techniques, because environmental goods and
amenities have no markets. Among various non-market valua-
tion techniques, this study uses the stated preference approach,
conjoint analysis, which makes it possible to measure part-worth
122 H. Bae / Urban Forestry & Urban Greening 10 (2011) 119–126
attribute values of goods and to compare the relative importance
of each attribute.
Methodology – conjoint analysis
There are various methods for estimating the monetary value
of environmental goods, which do not have actual markets. Of the
two basic approaches of non-market valuation, the demand curve
approach and the non-demand curve approach, the demand curve
approach can be classified into stated preference (SP) method and
revealed preference (RP) method. The SP method is a technique that
utilizes individual respondents’ statements regarding their prefer-
ences, which are expressed through questionnaires on hypothetical
markets. Through SP, one can estimate respondents’ willingness to
pay (WTP) or willingness to accept (WTA). On the other hand, the
RP method refers to the techniques that derive individuals’ prefer-
ences regarding environmental goods from their associated market
behaviors. The most common example of the SP method is the con-
tingent valuation method (CVM), and those of the RP method are
the travel cost method and hedonic pricing method.
Conjoint analysis is one of the SP methods and is conducted
through a questionnaire. The underlying assumption of the con-
joint analysis method is that any services or goods can be defined
as a combination of different levels of multiple attributes. Con-
joint analysis takes a decompositional approach that estimates the
part-worths of attributes from respondents’ overall evaluations or
preference choices from a set of alternatives that are prespeci-
fied in terms of different attributes and various levels. By setting
at least one of the attributes to be a monetary attribute, such as
cost, researchers can allow respondents to reveal their WTP for
each attribute. More specifically, in the conjoint analysis proce-
dure, respondents are presented with a set of alternatives differing
in the levels of their component attributes. Respondents are asked
to choose among (rank/rate) the alternatives on the basis of their
utility or preference on these attributes’ levels. The results of this
choice (ranking/rating) experiment are used to estimate the WTP
for given attributes at different levels through the part-worths and
their division by that on cost.
The conjoint analysis method has been actively used for eco-
nomic analyses on consumer behaviors and demands in the field
of marketing and transportation. Recently, environmental valua-
tion studies have increasingly begun adopting the conjoint analysis
method (Rae, 1981; Lareau and Rae, 1989; Mackenzie, 1990, 1993;
Adamowicz et al., 1994; Garrod and Willis, 1997, 1998; Farber
and Griner, 2000; Foster and Mourato, 2000). Particularly in the
context of value of urban river/stream, Smith and Desvousges
(1986) estimated the value of the water quality improvement and
corresponding recreational activities using conjoint analysis and
they found improving water quality from boatable to fishable has
approximately 40–80 USD value per year per household. Farber and
Griner (2000) estimated residents’ WTP for Pennsylvania water-
shed quality improvement using conjoint analysis and found that
the value of the improvement from severe to moderate pollution is
about 49.62 USD per 5 years per household.
Conjoint analysis as a non-market valuation technique is
receiving more attention because, although it retains the general
advantages of the SP method, it also partly complements the limi-
tations of the questionnaire-based SP approach by providing more
realistic and flexible hypothetical situations for surveys. From an
empirical standpoint, respondents tend to feel more comfortable
with choosing, ranking or rating alternatives than with open-ended
valuing tasks. In particular, among three types of decision mod-
els (choosing the best, ranking or rating), choosing the best choice
is closer to the real world consumers’ behavior in the markets,
minimizing respondents’ fatigue and reducing evaluation burdens
(Halvorsen et al., 1996). (However, the other SP method, CVM is not
necessarily an open ended type. It can be a close-ended/multiple-
bounded dichotomous type in which respondents’ valuing burden
is less intensive. Moreover, some scenarios lend themselves better
to ranking approach, although it is generally argued by economists
that the process of choosing is closer to real behavior.)
According to Adamowicz et al. (1998), the conjoint analysis is
less sensitive to respondents’ strategic thinking than CVM because
the conjoint analysis makes respondents focus more on their choice
and trade-off tasks than CVM during the survey. More impor-
tantly, conjoint analysis can provide meaningful outcomes, such
as part-worths of attributes of environmental goods that are hard
to obtain using the CVM, the predominant approach of the SP
method (Goodman et al., 1996). Ryan (1996) suggests that the
major advantages of the conjoint analysis are that it makes possible
the estimation of the relative importance of individual attributes
and the trade-offs or marginal rates of substitution among mul-
tiple attributes, as well as the total value of goods with different
combinations of attributes.
Although conjoint analyses have some advantages over other SP
methods, the limitations of the approach have also been pointed out
by researchers (Roe et al., 1996; Stevens et al., 2000). Conjoint anal-
ysis inevitably changes the scenario during the survey. This might
prevent respondents from understanding the scenario thoroughly,
which is one of the most critical requirements for reliable estima-
tion results in SP method applications. Furthermore, the conjoint
analysis also has been known to be more sensitive to misspecifica-
tion of functional forms. As the same branch of SP method, conjoint
analysis and CVM share the limitations and potentials of misspeci-
fications that come from inappropriate scenario design, insufficient
explanation on the scenario, price scope effect or wrong choice of
functional forms. Conjoint analysis and CVM have several different
types of approach (e.g. choice/rank/rate based conjoint analysis,
open/close ended CVM) and each approach has a different level of
strength in dealing with each issue.
Despite the limitations, this study uses the conjoint analysis
approach to estimate consumers’ value on urban stream attributes
since it enables the estimation of part-worth of each attribute of
urban stream, which can be used as the basis for priority settings
in urban stream improvement policies.
Theoretical framework
Conjoint analysis was principally developed by Green and Rao
(1971) and Johnson (1974), based on the work of Luce and Tukey
(1964). Choice-based conjoint analysis, which was the method used
in this study, was developed by McFadden (1974) based on the
Random Utility Model (RUM). Choice-based conjoint analysis has
evolved into various versions. Among various applications of con-
joint analysis, this study closely follows the choice-based approach
used in Foster and Mourato (2000). After comparing ranking and
choice-based approaches, Foster and Mourato (2000) chose the
choice-based approach as the primary model because it is less com-
plex and involves fewer assumptions for the decision criteria than
ranking approaches. According to the RUM, the indirect utility func-
tion for each respondent i can be decomposed into two parts –
a deterministic or systemic element (V) and a stochastic or ran-
dom element (ε), as presented in Eq. (1). A deterministic element
is assumed to be a linear combination of the attributes (X) of the
j different alternatives, as stated in Eq. (2). Although more com-
plex formulations are possible such as non-linear combination of
attributes for utility or flexible error structure, this study assumed
simple linear combination of attributes for more straightforward
calculation of the marginal WTP from the estimated coefficients as
done in Foster and Mourato (2000).
Uij = Vij + εij (1)
 H. Bae / Urban Forestry & Urban Greening 10 (2011) 119–126
Vij + bXij
The probability that a particular respondent most prefers alter-
native g, might be derived as the probability that the utility with
alternative g exceed any utilities with any other alternatives h, as
presented in Eq. (3). Error terms (εij ) are assumed to be distributed
with a Weibull distribution, in which they are independently and
identically distributed with an extreme-value distribution as in Eq.
(4).
   
P (Uig > Uih ∀h =
/ g) = P (bXig − bXih ) > (εih − εig )
P(εij ≤ t) = exp(− exp(−t))
The multinomial logit model is used to analyze the error terms
in this study. The probability of a particular alternative g being
selected as the best alternative can be expressed with a logistic
distribution, as presented in Eq. (5).
  exp(bXig )
P (Uig > Uih ∀h =
/ g) =  (5)
j
(exp(bXij ))
This model is estimated by the maximum likelihood method,
which is the procedure to find the value of b that maximizes the
probability that a given respondent selects the alternatives in the
order they were actually chosen. The likelihood function that the
actual choice pattern in the dataset would be observed is shown in
Eq. (6), which is the function of b. To find the value of b that maxi-
mizes L, Eq. (6) was transformed into logarithm form as presented
in Eq. (7) for computational convenience, in which the right side of
the equation turns into a simple linear combination. Once the value
of b has been estimated by this maximum likelihood procedure,
utility function in Eqs. (1) and (2) can be identified.

L(b) = (Pij )kij

Max ln L(b) = kij · ln Pij
j i
Utility function (1) can be presented in the scalar form with
each attribute (C – cost, N – natural, R – recreation) and corre-
sponding coefficients (bc , bn , br ), as presented in Eq. (8). Marginal
WTP for each attribute is the marginal rate of substitution between
each attribute and cost attribute. Thus, the negative ratio between
coefficients of two attributes derives marginal WTP. For instance,
marginal WTP values for the natural attribute can be derived from
the ratio between bn and bc , as stated in Eq. (9).
Uij = bc · Cij + bn · Nij + br · Rij + εij
dUij /dEij
Marginal WTP for natural attribute = −
dUij /dCij
Economic theory would suggest that individuals’ WTP might
interact with their income. Individuals’ WTP will increase as their
incomes go up. According to Foster and Mourato (2000), the income
interaction model can be estimated by incorporating an interaction
variable, which expresses the cost attribute as a function of indi-
vidual’s income (Y), as presented in Eq. (10). Marginal WTP of the
income interaction model might be calculated by Eq. (11).
Cij
Uij = bc · Cij + by + bn · Nij + br · Rij
Yij
dUij /dNij
Marginal WTP for natural attribute = −
dUij /dCij
bn
=−
[bc + (by /Yi )]
123
(2) Table 1
Attributes and levels used for this study.
Attribute Level
Concrete-encased stream
Natural attribute
Natural state stream
No recreational area
Recreational attribute Recreational area with walkway
Recreational area with walkway + facilities
0 USD
Cost attribute 15 USD
(3) 30 USD
(4)
Survey design
Attributes and levels
The first step of the conjoint analysis procedure is establishing
the attributes and their levels. As mentioned in the introduction
section, the attributes of the urban streams this study tries to
address are the natural attributes related to the streams’ rehabil-
itation into natural state streams, and the recreational attributes
related to the improvement of the streamsides to create recre-
ational facilities. The natural attributes are specified into two levels:
concrete-encased streams and natural state streams. The recre-
ational attributes are specified into three levels: no recreational
area, recreational area with walkway and recreational area with
walkway + facilities. The cost attribute, which is stated as the cost
respondents’ households would have to pay for improvements of
natural and recreational attributes, is specified into three levels:
0 USD, 15 USD and 30 USD (USD: US Dollar). The levels of cost
attributes are determined based on the plot survey. Table 1 shows
the target attributes and levels of this study.
(6)
Questionnaire design and conducting the survey
Each question consists of three alternatives, and respondents
(7) are asked to choose the most preferred. Each alternative is a mix
of specified particular levels of natural and recreational attributes,
as well as a corresponding cost. Because this study sets two lev-
els for natural attributes and three levels for recreational attributes
and for costs, there would be 2 × 3 × 3 = 18 possible alternatives
as combinations of attributes levels. This number of alternatives
was reduced from the original 18 to 9, using a fractional factorial
design. The full factorial designs expand the number of alterna-
tives in exponential fashion according to the number of attributes
and levels. On the other hand, the fractional factorial design allows
researchers to reduce the number of alternatives without losing key
(8) information. The fractional factorial design is practical with many
attributes/levels or small sample size. Although the fractional fac-
bn torial design is sufficient to estimate main effects of attributes, it
=− (9)
bc cannot estimate interaction effects between attributes. This study
utilized the fractional factorial design to overcome the problems
associated with a small sample size. The fractional factorial design
was conducted with the ORTHOPLAN procedure in the statistical
software package SPSS.
One of the alternatives of each question should include the
current status, which is the concrete-encased stream with no
recreational area and no extra cost (0 USD). The other two alterna-
tives show any improvements from the current status, which are
increased levels of natural and recreational attributes with a cer-
(10)
tain accompanying cost. Fig. 1 illustrates an example of a question.
Each alternative is presented with a brief picture, as well as ver-
bal description. Pictorial presentation is expected to carry several
advantages, such as a reduced information overload and fatigue as
well as effective perception level.
The questionnaire consists of three parts – the provision of
(11)
background knowledge and basic information about the Hong-je
stream, alternative choice exercises, and questions about the socio-
124 H. Bae / Urban Forestry & Urban Greening 10 (2011) 119–126

Fig. 1. Example of conjoint analysis survey questions.

economic status of respondents. Each questionnaire includes four Table 2

Model estimation result.
alternative choice exercises. Approximately 100 residents of the
Hong-je district were selected on the street around the Hong- Baseline model Income interaction model
je stream and asked to participate in the survey interview. By Natural attribute 1.2350*** (0.1824)a 1.2438*** (0.1834)
dropping missing responses, a sample of 92 valid and 368 alterna- Recreational attribute 0.5691*** (0.1203) 0.5735*** (0.1207)
tive choice responses were obtained. Interviews were undertaken Cost attribute −0.02203** (0.0855) −0.0469*** (0.0153)
during October 2001. All on-site interviews were conducted on a Cost/income 674.8228* (346.4772)
N 368 368
face-to-face basis by trained interviewers.
Log-likelihood −324.3765 −322.3174
Pseudo R-squaredb 0.1976 0.2026
a
Estimation results Standard errors are shown in parentheses.
b
Pseudo R-squared is computed as 1-(restricted log-likelihood/unrestricted log-
likelihood) and an alternate measure of goodness-of-fit for probabilistic choice
The NLOGIT procedure of the econometrics software package models.
LIMDEP 7.0 (Greene, 1998) was used for statistical analyses. The *
Significant at p < 0.1.
two models – the baseline model and income interaction model – **
Significant at p < 0.05.
***
were estimated. The baseline model is simply based on attribute Significant at p < 0.01.
levels and costs, while the income interaction model incorporated
respondents’ incomes in the model as a form of the cost–income
interaction variable (cost/income). 0.1 level. The low significance of the cost/income variable could be
Table 2 reports the results of the model estimation. The signs the result of the limitation of the specification scheme used in this
of coefficients of natural and recreational attributes variables are study, which includes only two attributes with limited number of
positive, indicating that the higher level of attributes increases levels and applies a simple linear functional form.
individuals’ utility level. Conversely, the sign of the cost variable Table 3 presents marginal WTP for improvements of each
is negative, suggesting that increase of cost reduces utility level. attribute, which is calculated from the baseline and the income
The signs of coefficients in both models are consistent with eco- interaction model estimation. The baseline model specification
nomic theory in which the WTP for each attribute increases with shows that estimated WTP for nature attributes at each level is
income level. Every coefficient is statistically significant at the 0.05 0 and 56 (based on Eq. (9), marginal WTP for natural attribute is
level, except the cost/income variable which is significant at the – (1.2350/−0.02203) = 56.1). In other words, the increased value

Fig. 2. Marginal WTP for urban stream improvements (USD).

 H. Bae / Urban Forestry & Urban Greening 10 (2011) 119–126
Table 3
Estimated willingness to pay (WTP) for urban stream attributes (Unit: USD).
Attribute Level Baseline Income
interactiona
Natural Concrete-encased stream 0 0
attribute Natural state stream 56 49
No recreational area 0 0
Recreational
Recreational area with 26 22
attribute
walkway
Recreational area with 52 45
walkway + facilities
a
WTP for the income interaction model was estimated at the mean household
income (USD 31,522).
through the rehabilitation of the concrete-encased stream into a
natural state one is 56 USD per household. On the other hand, the
income interaction model specification shows the increased value
through the rehabilitation of a concrete-encased stream into a nat-
ural state one is 49 USD per household, which is slightly lower than
that of the baseline model (based on Eq. (11), marginal WTP for
natural attribute is – (1.2438/−0.0469 + (674.8228/31522) = 48.7)).
Marginal WTP for recreation attributes at each level are 0, 26
and 52 in the baseline model. This means the value obtained by the
improvements of streamsides – such as creating a walkway where
there is no bank or expanding facilities with the presence of only a
walkway – is 26 USD per household. Estimated WTP for recreation
attributes in the income interaction model were 22 and 45, which
is also slightly lower than that of the baseline model.
The coefficient of the cost/income variable in the income inter-
action model in Table 2 is statistically significant. The negative
coefficient of the cost/income variable supports the positive rela-
tionship between income and WTP, which is consistent with
economic theory. This provides evidence of the theoretical validity
of results (Foster and Mourato, 2000) (Fig. 2).
Conclusion
Both central and local governments in Korea are attempting
to address issues surrounding the increasing demand for environ-
mental amenities and recreational resources in metropolitan areas.
Because available open spaces are limited, financing resources and
land for new park development in existing urban area is extremely
costly and burdensome. This paper indicates how urban streams
are being transformed or improved to the status of neighborhood
parks for the public to enjoy.
Although urban stream restoration has become one of the key
topics in water management and land use planning in Korea, there
are still ongoing controversies associated with restoration projects
including flood stability, vegetation/greening, water quality and
landscape/facility design. Although these issues can be addressed
through channel design, hydraulic engineering and appropriate
choices in greening and vegetation, budgetary constraints require
both central and small, local governments to explore opportunities
for maximizing resources and setting priorities.
To assist in the priority setting process, this study estimates
the attribute values of urban streams, using conjoint analysis. Par-
ticularly, this study estimates the natural and recreational value
of an urban stream that might be obtained through urban stream
improvement measures. The value of the natural attribute was esti-
mated at two levels: concrete-encased stream and natural state
stream. The value of the recreational attribute was estimated at
three levels: no recreational area, recreational area with walkway,
and recreational area with walkway + facilities.
The basic findings of the study show that the value of the nat-
ural attribute at each level was estimated at 0 and 56 with the
baseline model and 0 and 49 with the income interaction model.
125
Additionally, the value of the recreational attribute at each level
was estimated at 0, 26 and 52 with the baseline model and 0, 22
and 45 with the income interaction model. The findings indicate
that the increased natural attribute value derived from transform-
ing the existing concrete-encased stream into natural state stream
is about 50 USD per household. The increased recreational attribute
value either by creating a walkway where there is no bank or by
expanding facilities to the existed walkway are about 25 USD per
household.
Although the income interaction model allows a researcher to
incorporate the relevant economic theory, differentiated WTPs by
income level, the estimates of the income interaction model did
not show a sizeable difference from those of the baseline model.
Moreover, the income interaction variable was significant only at
the 10% level. This indicates that the income interaction improves
the estimates slightly, but the performance of the baseline model
is sufficient for predicting WTP for urban stream attributes in this
study.
Given the high population density in the Seoul metropolitan
area, the estimated WTPs in this study suggest a significant level
of total benefit for an urban stream improvement project, which
might be obtained by multiplying the estimated WTP per house-
hold by the total number of affected households. This is consistent
with the recent phenomenon of frequent adoptions of urban stream
improvement plan throughout the country, which must have been
driven by this considerable benefit that outweighs the cost.
The estimated WTP demonstrates the part-worths and relative
importance of the natural and recreational attributes of the urban
stream. The estimated WTP in this study also provides the basis
for the total value of the streams with different combinations of
attribute levels. Moreover, the results of this study are expected to
provide policy grounds and evaluation criteria for prior or ongoing
urban stream improvement plans. Moreover, these results might
suggest meaningful policy implications regarding urban stream
land use planning by providing the basis for value-maximizing
measures and cost benefit analyses.
Natural and recreational attributes are fundamentally comple-
mentary, where the value of each attribute gets more meaningful
when the other attribute exists. However, due to limited resource
availability, most local government-driven, small-scale projects
must make trade-offs between rehabilitation into a natural state
stream and improvement of recreational amenities. This study
attempts to address this current urban stream design issue in Korea
by explicitly incorporating these options into the attribute levels.
Therefore, the findings in this study are expected to have practi-
cal implications for local governments as they set priorities while
operating under budget constraints.
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