Nicole Owens

Benefits of water quality policies: the Chesapeake Bay

Abstract The Chesapeake Bay is a unique and treasured natural resource. It is the largest estuary on the Atlantic coast and one of the largest estuaries in the world. The Chesapeake drains portions of six states: Virginia, Maryland, Delaware, Pennsylvania, New York, and West Virginia and the District of Columbia. As testimony to its importance, the US Congress issued a directive in 1976 to the Chesapeake Bay Program (CBP) to examine and identify the factors that were altering the conditions of the Bay. Nutrient delivery to the Bay, which has increased dramatically over time, was identified as one of the factors and has been the primary focus of research and policy efforts related to achieving water quality improvements. The purpose of this paper is to estimate the benefits of water quality legislation in the Bay region from 1972, the year the Clean Water Act (CWA) was promulgated, to 1996. Nutrients, nitrogen and phosphorous, are the dominant criteria addressed by this case study. Benefits are assessed from a ‘with–without’ perspective. That is, 1996 water quality is compared with what it would have been in 1996 without the CWA and related legislation. The US EPA CBP Watershed and Water Quality Models were used to determine the distribution of nutrient loadings from point and non-point sources and characterize water quality. Modeling results indicate that conditions in the Bay are improved in some areas for some pollutants. Total phosphorus has decreased dramatically from ‘without’ concentrations in all major tributaries and segments of the Chesapeake Bay. The monetized annual boating, fishing, and swimming benefits of water quality improvements in the Chesapeake Bay range from

Risk assessment for benefits analysis: framework for analysis of a thyroid-disrupting chemical.

357.9 million to

Linking Economics and Risk Assessment

1.8 billion. These benefit estimates represent use values for persons living in the District of Columbia, and portions of Maryland and Virginia. Residents of Delaware, New York, and Pennsylvania, which are also part of the Bay Watershed, are not included in this analysis. As such, this range likely underestimates the true benefits of Bay water quality improvement.

What to Do at Low Doses: A Bounding Approach for Economic Analysis

Benefit-cost analysis is of growing importance in developing policies to reduce exposures to environmental contaminants. To quantify health benefits of reduced exposures, economists generally rely on dose-response relationships estimated by risk assessors. Further, to be useful for benefits analysis, the endpoints that are quantified must be expressed as changes in incidence of illnesses or symptoms that are readily understood by and perceptible to the layperson. For most noncancer health effects and for nonlinear carcinogens, risk assessments generally do not provide the dose-response functions necessary for economic benefits analysis. This article presents the framework for a case study that addresses these issues through a combination of toxicology, epidemiology, statistics, and economics. The case study assesses a chemical that disrupts proper functioning of the thyroid gland, and considers the benefits of reducing exposures in terms of both noncancer health effects (hypothyroidism) and thyroid cancers. The effects are presumed to be due to a mode of action involving interference with thyroid–pituitary functioning that would lead to nonlinear dose response. The framework integrates data from animal testing, statistical modeling, human data from the medical and epidemiological literature, and economic methodologies and valuation studies. This interdisciplinary collaboration differs from the more typical approach in which risk assessments and economic analyses are prepared independently of one another. This framework illustrates particular approaches that may be useful for expanded quantification of adverse health effects, and demonstrates the potential of such interdisciplinary approaches. Detailed implementation of the case study framework will be presented in future publications.

Health Risk Information to Reduce Water Pollution

Benefit-cost analysis relies heavily upon risk assessment. The extent to which benefits can be quantitatively included in an economic analysis is frequently determined by risk assessment methods. Therefore, interdisciplinary collaboration between economists and experts in risk assessment-related disciplines is critical to further development of quantitative human health benefits analysis. To further lay the groundwork for such collaborations, this article reviews the economic foundations of benefit-cost analysis, identifies implications of incorporating this approach into risk assessment, and suggests future cooperation between economists and risk assessors.

Valuing Reduced Risks to Children: the Case of Bicycle Safety Helmets

To quantify the health benefits of environmental policies, economists generally require estimates of the reduced probability of illness or death. For policies that reduce exposure to carcinogenic substances, these estimates traditionally have been obtained through the linear extrapolation of experimental dose-response data to low-exposure scenarios as described in the U.S. Environmental Protection Agencys Guidelines for Carcinogen Risk Assessment (1986). In response to evolving scientific knowledge, EPA proposed revisions to the guidelines in 1996. Under the proposed revisions, dose-response relationships would not be estimated for carcinogens thought to exhibit nonlinear modes of action. Such a change in cancer-risk assessment methods and outputs will likely have serious consequences for how benefit-cost analyses of policies aimed at reducing cancer risks are conducted. Any tendency for reduced quantification of effects in environmental risk assessments, such as those contemplated in the revisions to EPAs cancer-risk assessment guidelines, impedes the ability of economic analysts to respond to increasing calls for benefit-cost analysis. This article examines the implications for benefit-cost analysis of carcinogenic exposures of the proposed changes to the 1986 Guidelines and proposes an approach for bounding dose-response relationships when no biologically based models are available. In spite of the more limited quantitative information provided in a carcinogen risk assessment under the proposed revisions to the guidelines, we argue that reasonable bounds on dose-response relationships can be estimated for low-level exposures to nonlinear carcinogens. This approach yields estimates of reduced illness for use in a benefit-cost analysis while incorporating evidence of nonlinearities in the dose-response relationship. As an illustration, the bounding approach is applied to the case of chloroform exposure.

The Price Premium for Organic Babyfood: A Hedonic Analysis

A growing body of empirical studies indicate that farmers are concerned about how agricultural practices may affect health risks and environmental quality. These studies suggest that farmers are not simply profit maximizers. Instead, they have multiple objectives that include health and environmental concerns. As a result, their privately optimal behavior can result in less use of polluting inputs than would result from straight profit maximization. A recent survey of Michigan corn growers found that many do care about herbicide risks, but that growers often lack adequate information about associated health and environmental risks. Results on willingness to pay (WTP) for reduced risk from herbicide leaching, carcinogenicity and fish toxicity suggest that better information could induce crop farmers to reduce nonpoint-source pollution.