Economic Benefits of Improved Water Quality: Public Perceptions of Option and Preservation Values by Douglas Greenley

Author:Douglas Greenley [Greenley, Douglas]
Language: eng
Format: epub
Tags: Political Science, General
ISBN: 9780429705038
Google: emwPEAAAQBAJ
Goodreads: 50547830
Publisher: Routledge
Published: 2020-01-16T00:00:00+00:00

Existence and Bequest Values

Preservation benefits of water quality in the South Platte River Basin were defined to include both the value placed on existence of a natural ecosystem and the value of its bequest to future generations. Table 5.2compares the existence and bequest values reported by recreation user and nonuser households.

River basin households reported willingness to pay an average of $94 annually in sales taxes to improve water quality in the river basin for preservation demand. The 95 percent confidence interval around this mean value ranged from $69 to $119. Preservation benefits include average bequest value of $46 annually with a range of $34-$59 and existence value of $48 annually with a range of $35-$60. These were the preservation values reported by the entire sample of households interviewed including 81 percent who expected to continue using lakes and streams in the river basin for fishing, boating, swimming, and noncontact recreation activities such as picnicking and sightseeing near waterways. If there were no water-based recreation activities in the South Platte River Basin, resident households would still value improved water quality by this amount. The estimates of preservation values by recreation users were premised on the assumption that the respondents knew with certainty they would not engage in water-based recreation activities in the river basin.

Since preservation values were defined as the benefits which would remain in the absence of recreation use, we believe that to avoid upward bias, the preservation values reported by users should not be added to their recreation use and option benefits. As a first approximation, preservation benefits of the 19 percent of respondents who reported a zero chance of future water-based recreation use of the river basin were extrapolated to all resident households. This procedure involves the premise that recreation user households would be willing to pay no more for preservation demands than nonuser households.

Nonuser households reported average total preservation values of $59 annually with a range of $12-$107. The range represents the 95 percent confidence interval around the mean value. This includes average bequest value of $24 annually with a range of $12-$36 and existence value of $35 annually with a range of $0-$71. These were the preservation values reported by the 19 percent of the sample stating a zero chance of future use of the river basin for water-based recreation activities. The two-tailed t-test of significance revealed that the value estimated for this small subsample of respondents was significantly different from zero in the case of existence and bequest values in Denver but not in Fort Collins. A one-tail test may be more appropriate for data such as this where only positive values were reported. Existence value in Fort Collins was significant in a one-tail test at the 95 percent confidence level, and bequest value was significant at the 90 percent level. Thus, we consider the average values reasonable and a larger subsample would increase their significance.

These benefit estimates were somewhat higher than a recent estimate of nonuse benefits prepared for the President's Council on Environmental Quality.

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