ASSESSING THE ECONOMIC BENEFITS OF GROUND WATER FOR ENVIRONMENTAL POLICY DECISIONS¹

Abstract

The full range of environmental and economic services of ground water need to be accounted for in policy decisions. Nonrecognition of these services imputes a lower value for the ground water resource in establishing policies. We describe a conceptual framework for identifying and measuring the economic value of groundwater. The valuation framework links changes in physical characteristics of ground water to services provided by ground water and the economic effects of changes in ground water services. In addition to the framework, we develop a general protocol to follow for assessing the benefits of ground water policies. Application of the protocol will aid in establishing structure and consistency across policy assessments and improve the accuracy and completeness of benefit estimates, avoid double-counting problems, and eliminate duplication of ground water valuation efforts. (KEY TERMS: economics; ground water hydrology; surface water hydrology; water demand; water policy/regulationldecision making.)

Decision support for water policy: a review of economic concepts and tools

“…Berrens et al, 1996), groundwater protection (e.g. Bergstrom et al, 1996) and outdoor recreation have been valued using CVM surveys. CVM surveys also have used to value more complex environmental programs, such as hazardous waste reduction, endangered species' habitat protection and human lives saved (e.g.…”

Negative externalities on property values resulting from water impairment: The case of the Pigeon River Watershed

“…Instream nonuse benefits are often difficult to estimate because they involve the public-good characteristics of nonrivalry and nonexcludability and they are typically not directly reflected in market prices. In respond to these challenges, a great deal of research has been devoted to the estimation of instream nonuse benefits, based mostly on nonmarket valuation methods (e.g., Agudelo, 2001;Bergstrom et al, 1996;Loomis, 1998;Wilson and Carpenter, 1999). Among these studies, the literature is split as to whether hedonic studies are worthy of attention because the question of whether water quality influences residential property values remains unsettled.…”

Household’s Willingness to Pay for Safe Drinking Water: A Case Study of Abbottabad District

“…Secondly the study shows that contingent valuation is an effective tool for estimating willingness to pay for a Varity of public services. Bergstrom, et al (1996) provides a conceptual model which describes the linkages between changes in groundwater quality and the services that are received by households. Whitehead, et al (1998) describe the averting behaviour approach to the valuation of drinking water quality.…”