William H. Desvousges

Measuring water quality benefits

1 Measuring Water Quality Benefits: An Introduction.- 1.1 Background.- 1.2 Regulation: An Overview.- 1.3 Objectives.- 1.4 Preview.- 1.5 References.- 2 The Conceptual Basis of Benefits Estimation.- 2.1 Introduction.- 2.2 A Brief Review of the Conventional Theory of Benefits Measurement.- 2.3 The Treatment of Nonuse Values and Uncertainty in Benefit Analysis.- 2.4 Measuring the Benefits Associated with Changes in Environmental Amenities: An Overview.- 2.5 Benefit Measurement Approaches Considered in This Study.- 2.5.1 The Travel Cost Approach.- 2.5.2 The Contingent Valuation Approach.- 2.5.3 The Contingent Ranking Approach.- 2.6 Summary.- 2.7 References.- Appendix: Analytical Background for Valuation Under Uncertainty.- 3 Survey Design.- 3.1 Introduction.- 3.2 The Monongahela River Basin.- 3.2.1 Geography.- 3.2.2 Uses.- 3.2.3 Recreation.- 3.2.4 Basin Socioeconomic Profile.- 3.3 Sampling Plan.- 3.3.1 Target Population.- 3.3.2 Sample Selection and Survey Design.- 3.4 Survey Plan.- 3.4.1 Questionnaire Design and Limited Local Pretest.- 3.4.2 Retaining Field Supervisors and Hiring Interviewers.- 3.4.3 Counting and Listing of Sample Segments.- 3.4.4 Developing Field Manuals and Conducting Interviewer Training.- 3.4.5 Conducting Household Interviews.- 3.4.6 Initial Contacts and Obtaining Cooperation.- 3.4.7 Household Enumeration.- 3.4.8 Interviewing Procedures.- 3.4.9 Implications.- 3.5 References.- Appendix: Interviewer Debriefing.- 4 Contingent Valuation Design and Results: Option Price and Use Values.- 4.1 Introduction.- 4.2 Design Issues and Contingent Valuation.- 4.2.1 Eliminating Information and Hypothetical Biases.- 4.2.2 Considering the Role of Framing Biases.- 4.2.3 Addressing Procedural Issues.- 4.3 Questionnaire Design.- 4.3.1 Part A-Background.- 4.3.2 Part B-Benefits Measures.- 4.4 Profiles of Survey Respondents.- 4.5 Protest and Outlying Bids.- 4.5.1 Protest Bids.- 4.5.2 Identifying Outliers.- 4.6 Distribution of Option Price Responses.- 4.7 Mean Option Price Responses.- 4.8 Test Findings: Starting Point and Interviewer Biases.- 4.9 Use Value Results.- 4.10 Implications.- 4.11 References.- Appendix: Additional Empirical Results.- 5 Measuring Option Value.- 5.1 Introduction.- 5.2 Recent Estimates of Option Values.- 5.3 Measuring Option Value: Survey Design.- 5.4 Survey Results-Option Value.- 5.4.1 Option Value-Demand Uncertainty.- 5.4.2 Option Value-Supply Uncertainty.- 5.5 Summary.- 5.6 References.- 6 The Contingent Ranking Method and Benefit Estimation.- 6.1 Introduction.- 6.2 The Random Utility Model of Consumer Behavior with Discrete Choices.- 6.3 Estimation of Random Utility Models with Ordered Alternatives.- 6.4 Contingent Ranking and Valuing Public Goods.- 6.5 Applications of Contingent Ranking Method.- 6.6 Monongahela Contingent Ranking Experiment: Design and Estimates.- 6.7 Benefit Estimates with Contingent Ranking Models.- 6.8 Implications and Further Research.- 6.9 References.- 7 The Travel Cost Approach to Recreation Demand Modeling: An Introduction.- 7.1 Introduction.- 7.2 The Household Production Framework and Recreation Demand Models.- 7.3 The Opportunity Costs of Time.- 7.4 Measuring Site Usage.- 7.5 Heterogeneous Recreation Sites and Site Characteristics.- 7.6 Summary.- 7.7 References.- 8 Travel Cost Model: Data Sources and Variable Measures.- 8.1 Introduction.- 8.2 Sources of Data.- 8.2.1 The 1977 Federal Estate Survey.- 8.2.2 Recreation Resources Management System.- 8.2.3 National Water Data Exchange.- 8.2.4 Personal Correspondence.- 8.3 Survey Issues.- 8.3.1 Onsite Survey.- 8.3.2 Multiple Visits.- 8.4 Data Character.- 8.4.1 The Quantity Measure: Visits.- 8.4.2 Distance Cost Component of Travel Costs.- 8.4.3 Time Cost Component of Travel Costs.- 8.5 Site Profile.- 8.6 Congestion at U.S. Army Corps of Engineers Sites.- 8.7 Water Quality.- 8.8 Users.- 8.9 Profile of Activities at the Corps Sites.- 8.10 Summary.- 8.11 References.- 9 Generalized Travel Cost Model.- 9.1 Introduction.- 9.2 Implementing the Generalized Travel Cost Model.- 9.2.1 The Conceptual Links Between Visits and Characteristics.- 9.2.2 The Two-Step Estimation Procedure.- 9.2.3 Additional Econometric Considerations.- 9.3 Estimating the Generalized Travel Cost Model.- 9.4 Valuing Water Quality Changes.- 9.5 Summary.- 9.6 References.- 10 Comparing Direct and Indirect Benefit Estimation Approaches.- 10.1 Introduction.- 10.2 Past Comparisons of Benefit Estimation Approaches: A Review.- 10.3 A Comparison of the Generalized Travel Cost Model and Contingent Valuation.- 10.4 A Comparison of a Simple Travel Cost Model and Contingent Valuation.- 10.5 Comparisons of Benefit Estimation Approaches: Some Interpretations.- 10.6 References.- 11 Research Issues in Benefit Estimation.- 11.1 Introduction.- 11.2 Our Findings: A Perspective.- 11.3 Measuring Nonuse Values.- 11.4 Site Attributes and Recreation Demand.- 11.5 Contingent Valuation Versus Indirect Methods for Benefit Estimation.- 11.6 Benefits Transfer.- 11.7 Prognosis.- 11.8 References.- Appendix A: Survey Questionnaire as Administered During the Monongahela River Basin Survey.

Benefit transfer: Conceptual problems in estimating water quality benefits using existing studies

The Environmental Protection Agency has used existing studies to estimate the benefits of environmental improvements associated with several regulatory proposals The problems encountered in using existing studies to measure the benefits of water quality improvements are investigated in this paper. We propose criteria for selecting transfer studies and present a case study of a transfer. Our research indicates that although benefit transfer may offer promise, the fact that existing studies were not designed for transfer places severe limitations on the current effectiveness of transfer. Suggestions for future research are presented to address these limitations.

An Empirical Analysis of the Economic Value of Risk Changes

This paper reports detailed empirical tests of how an individuals valuation of a risk change varies with the level of the baseline risk. The findings reject the conventional hypothesis and indicate that the estimated marginal valuation of a risk change decreased with increases in the level of risk. They also indicate that the direction of the risk change and perceived entitlements to safety affect the reported marginal valuations. The specific application involves a contingent valuation analysis based on the responses of a representative sample of households in suburban Boston to proposed reductions in the risks of exposure to hazardous wastes.

Option price estimates for water quality improvements: A contingent valuation study for the monongahela river

Abstract We present the findings from a contingent valuation survey designed to estimate the option price bids for the improved recreation resulting from enhanced water quality in the Pennsylvania portion of the Monongahela River. The findings are based on a survey design that used professional interviewers to conduct personal interviews determined from a representative sample of 393 households. In addition, the research suggests that protest bids and outliers be viewed similarly. Accordingly, a new technique for identifying outlying responses is proposed. The findings suggest that the question format affects the option price estimates and that criteria for determining the final sample of responses can have an important influence on contingent valuation results.

Willingness to pay for improved respiratory and cardiovascular health: a multiple-format, stated-preference approach

This study uses stated-preference (SP) analysis to measure willingness to pay (WTP) to reduce acute episodes of respiratory and cardiovascular ill health. The SP survey employs a modified version of the health state descriptions used in the Quality of Well Being (QWB) Index. The four health state attributes are symptom, episode duration, activity restrictions and cost. Preferences are elicited using two different SP formats: graded-pair and discrete-choice. The different formats cause subjects to focus on different evaluation strategies. Combining two elicitation formats yields more valid and robust estimates than using only one approach. Estimates of indirect utility function parameters are obtained using advanced panel econometrics for each format separately and jointly. Socio-economic differences in health preferences are modelled by allowing the marginal utility of money relative to health attributes to vary across respondents. Because the joint model captures the combined preference information provided by both elicitation formats, these model estimates are used to calculate WTP. The results demonstrate the feasibility of estimating meaningful WTP values for policy-relevant respiratory and cardiac symptoms, even from subjects who never have personally experienced these conditions. Furthermore, because WTP estimates are for individual components of health improvements, estimates can be aggregated in various ways depending upon policy needs. Thus, using generic health attributes facilitates transferring WTP estimates for benefit-cost analysis of a variety of potential health interventions.

Valuing Public Goods: Discrete versus Continuous Contingent-Valuation Responses

Independent applications of open-ended and dichotomous-choice formats are compared using tests of means, estimating joint likelihood functions and nonparametric tests of distributions. The null hypothesis of no difference in the open-ended and dichotomous-choice estimates of central tendency cannot be rejected for two out of three data sets, while estimated standard deviations are significantly different for all three data sets. In addition, actual dichotomous-choice means and standard deviations exceed those from comparable synthetic dichotomous-choice data sets, suggesting either open-ended questions underestimate values or dichotomous-choice bid structures may lead to systematic overestimates.

Can public information programs affect risk perceptions

This article provides the first controlled evaluation of how different information materials explaining the risks from radon influenced peoples perceptions of these risks. Using a panel study, it was possible to observe how stated risk perceptions responded to information about indoor radon concentrations and brochures explaining the radon readings. The findings indicate that risk communication policies can be effective in modifying risk perceptions. Moreover, they have three specific implications for radon policy: (1) Public officials should not adopt strategies that provide minimal risk information to the public as a means of avoiding undue alarm, for this can have the reverse effect; (2) measures of the effectiveness of risk communication will depend on how education and behavior change are defined; (3) categorical guidelines about risk without quantitative information can lead people to treat the levels as thresholds, creating an artificial discontinuity in their responses to small changes in risk perceptions.

Valuation of Multiple Environmental Programs

We examined sequence effects on willingness-to-pay (WTP) when people evaluate a series of environmental goods. Each respondent evaluated five different environmental goods using WTP and four evaluative attitude ratings. There was a strong sequence effect: WTP was much larger for the first good than for goods evaluated afterward. Also, total WTP for the bundle of five goods depended on which good was evaluated first: the more highly valued the first good, the higher the total WTP for the bundle. The attitude ratings are shown to be more statistically efficient than WTP in measuring the relative importance of different environmental goods.

Assessing the externalities of electricity generation in the Midwest

This paper summarizes the research strategy adopted in developing separate estimates of environmental costs for two major private utility systems. One of the systems, North States Power Company in Minnesota, is used to describe the model structure. Particular focus was given to developing methods to assist in the transfer of damage function and monetary valuation estimates to other locations and contexts.

Learning about Radon's Risk

This article reports the results of an evaluation of the effectiveness of different types of information materials in communicating the risk from exposure to radon, a naturally occurring indoor air pollutant. The study involved a panel of 2300 homeowners who actually experienced risks from radon, and the information program used to explain these risks. The analysis considered information transfer and performance on specific tasks requiring information on the risk from radon to measure learning. The results suggest a systematic learning process, but indicate that the process can be influenced by how risk information is presented.