The Economic Value of Water Quality

42 Pages Posted: 17 Jan 2008

See all articles by W. Kip Viscusi

W. Kip Viscusi

Vanderbilt University - Law School; National Bureau of Economic Research (NBER); Vanderbilt University - Department of Economics; Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - Strategy and Business Economics

Joel C. Huber

Duke University - Fuqua School of Business

Jason Bell

Duke University - Fuqua School of Business

Abstract

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

Suggested Citation

Viscusi, W. Kip and Huber, Joel C. and Bell, Jason, The Economic Value of Water Quality. Environmental and Resource Economics, Forthcoming, Vanderbilt Law and Economics Research Paper No. 08-02, Available at SSRN: https://ssrn.com/abstract=1084077

W. Kip Viscusi (Contact Author)

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
United States
615-343-7715 (Phone)
615-322-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Vanderbilt University - Department of Economics

Box 1819 Station B
Nashville, TN 37235
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

Vanderbilt University - Owen Graduate School of Management

401 21st Avenue South
Nashville, TN 37203
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

Vanderbilt University - Strategy and Business Economics ( email )

Nashville, TN 37203
United States

Joel C. Huber

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States
919-660-7785 (Phone)

Jason Bell

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States

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