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Valuing the Incremental Benefits of Groundwater Protection when Exposure Levels are Known

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  • Gregory Poe
  • Richard Bishop

Abstract

Both economic theory and psychological research indicate that benefit functions for reductions in health risk exposures may be conditional on current exposures. Using nitrates found in household wells, it is demonstrated that perceptions of health risks across exposure levels are affected by the individual's current exposure level, thus providing support for a conditional benefits function approach. Functions of conditional incremental benefits are estimated from a contingent valuation study of households that had been informed of their water test results. Incremental benefits reach a peak at an intermediate level of nitrates and then decline. Possible explanations for this non-convexity are provided. Copyright Kluwer Academic Publishers 1999

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  • Gregory Poe & Richard Bishop, 1999. "Valuing the Incremental Benefits of Groundwater Protection when Exposure Levels are Known," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 13(3), pages 341-367, April.
    • Handle: RePEc:kap:enreec:v:13:y:1999:i:3:p:341-367
    DOI: 10.1023/A:1008251418007
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    2. Hasler, Berit & Lundhede, Thomas, 2005. "Are Agricultural Measures for Groundwater Protection Beneficial When Compared to Purification of Polluted Groundwater?," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24587, European Association of Agricultural Economists.
    3. Schläpfer, Felix & Erickson, Jon D., 2001. "A Biotic Control Perspective on Nitrate Contamination of Groundwater from Agricultural Production," Agricultural and Resource Economics Review, Cambridge University Press, vol. 30(2), pages 113-126, October.
    4. Olivier Beaumais & Anne Briand & Katrin Millock & Céline Nauges, 2010. "What are Households Willing to Pay for Better Tap Water Quality? A Cross-Country Valuation Study," Documents de travail du Centre d'Economie de la Sorbonne 10051, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    5. Schlapfer, Felix, 2006. "Survey protocol and income effects in the contingent valuation of public goods: A meta-analysis," Ecological Economics, Elsevier, vol. 57(3), pages 415-429, May.
    6. Melo, Grace, 2016. "Valuing Groundwater Quality: Does Averting Behavior Matter?," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 230001, Southern Agricultural Economics Association.
    7. Isabell Goldberg & Jutta Roosen, 2007. "Scope insensitivity in health risk reduction studies: A comparison of choice experiments and the contingent valuation method for valuing safer food," Journal of Risk and Uncertainty, Springer, vol. 34(2), pages 123-144, April.
    8. Cai, Yongxia & Shaw, W. Douglass & Wu, Ximing, 2008. "Risk Perception and Altruistic Averting Behavior: Removing Arsenic in Drinking Water," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6149, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Guignet, Dennis, 2012. "The impacts of pollution and exposure pathways on home values: A stated preference analysis," Ecological Economics, Elsevier, vol. 82(C), pages 53-63.
    10. Li, Xiaoshu & Boyle, Kevin J. & Pullis, Genevieve, 2012. "Does On-site Experience Affect Responses to Stated Preference Questions?," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124991, Agricultural and Applied Economics Association.
    11. Kountouris, Yiannis & Nakic, Zoran & Sauer, Johannes, 2015. "Political instability and non-market valuation: Evidence from Croatia," Resource and Energy Economics, Elsevier, vol. 41(C), pages 19-39.
    12. Mukherjee, Sacchidananda, 2008. "Factors influencing farmers\u2019 willingness to protect groundwater from nonpoint source of pollution in the Lower Bhavani River Basin, Tamil Nadu," Conference Papers h041886, International Water Management Institute.
    13. Nick Hanley & Felix Schlapfer, "undated". "What determines the demand for programmes providing local environmental public goods," Working Papers 2001_7, Business School - Economics, University of Glasgow.
    14. Johnson, Kris A. & Polasky, Stephen & Nelson, Erik & Pennington, Derric, 2012. "Uncertainty in ecosystem services valuation and implications for assessing land use tradeoffs: An agricultural case study in the Minnesota River Basin," Ecological Economics, Elsevier, vol. 79(C), pages 71-79.
    15. Li, Xiaoshu & Boyle, Kevin J. & Holmes, Thomas P. & LaRouche, Genevieve Pullis, 2014. "The effect of on-site forest experience on stated preferences for low-impact timber harvesting programs," Journal of Forest Economics, Elsevier, vol. 20(4), pages 348-362.
    16. Onjala, Joseph & Ndiritu, Simon Wagura & Stage, Jesper, 2013. "Risk Perception, Choice of Drinking Water, and Water Treatment: Evidence from Kenyan Towns," RFF Working Paper Series dp-13-10-efd, Resources for the Future.
    17. Poe, Gregory L. & Boyle, Kevin J. & Bergstrom, John C., 2000. "A Meta Analysis Of Contingent Values For Groundwater Quality In The United States," 2000 Annual meeting, July 30-August 2, Tampa, FL 21871, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    18. Tanellari, Eftila & Bosch, Darrell J. & Mykerezi, Elton, 2009. "On Consumers' Attitudes and Willingness to Pay for Improved Drinking Water Quality and Infrastructure," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49535, Agricultural and Applied Economics Association.

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    More about this item

    Keywords

    contingent valuation; damage and benefit functions; groundwater quality; risk perceptions; JEL classification: Q21; Q25; D62;
    All these keywords.

    JEL classification:

    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

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