The Economic Value of Water Quality
42 Pages Posted: 17 Jan 2008
Stated preference values for water quality ratings based on the U.S. Environmental Protection Agency National Water Quality Inventory ratings provide an operational basis for benefit assessment. Iterative choice survey results for a very large, nationally representative, Web-based panel imply an average valuation of $32 for each percent increase in lakes and rivers in the region for which water quality is rated Good. Valuations are skewed, with the mean value more than double the median. Sources of heterogeneity in benefit values include differences in responses to average water quality information and the base level of water quality. Conjoint estimates are somewhat lower than the iterative choice values. The annual economic value of the decline in inland U.S. water quality from 1994 to 2000 is over $20 billion.
Keywords: water quality, stated preference, conjoint analysis
JEL Classification: Q25, Q26
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