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ESTIMATING THE BENEFITS OF PHOSPHORUS POLLUTION REDUCTIONS: AN APPLICATION IN THE MINNESOTA RIVER 1
Author(s) -
Mathews Leah Greden,
Homans Frances R.,
Easter K. William
Publication year - 2002
Publication title -
jawra journal of the american water resources association
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.957
H-Index - 105
eISSN - 1752-1688
pISSN - 1093-474X
DOI - 10.1111/j.1752-1688.2002.tb04343.x
Subject(s) - contingent valuation , willingness to pay , recreation , nonmarket forces , environmental science , pollution , probit model , water quality , cost–benefit analysis , valuation (finance) , environmental protection , agricultural economics , business , economics , ecology , market economy , finance , factor market , econometrics , biology , microeconomics
In order to make economically efficient decisions about water quality improvements, data on both the costs and benefits of these improvements is needed. However, there has been little research on the benefits of reducing phosphorus pollution which implies that policy decisions are not able to make the comparison of costs and benefits that is essential for economic efficiency. This research attempts to ameliorate this situation by providing an estimate of the benefits of a 40 percent reduction in phosphorus pollution in the Minnesota River. A 1997 mail survey gathered information on Minnesota residents'use of a recreational site on the Minnesota River, the Minnesota Valley National Wildlife Refuge, and their willingness to pay for phosphorus reductions in the Minnesota River. The random effects probit model used in this research to investigate household willingness to pay for phosphorus pollution reductions in the Minnesota River incorporates recent innovations in nonmarket valuation methodology by using both revealed and stated preference data. This model estimated annual household willingness to pay for phosphorus reductions in the Minnesota River at $140. These results may be used in combination with cost estimates to determine the economic efficiency of phosphorus clean up.