Valuing Ecosystem Services
Protecting today’s resources for tomorrow!
Water Quality
Natural landscapes can protect water by absorbing and filtering nutrients and other pollutants. Ecosystems provide a water purification service that improves water quality, which benefits coastal zone residents through a safer water supply, enhanced recreation experiences, and improved overall ecosystem health.
Water Quality Ecosystem Services Framework
The well-being of everyone is improved by better water quality, as clean water is essential to human health. Specifically, gains are experienced by: farmers who irrigate crops with cleaner water; aquaculturists who raise healthier fish; swimmers, divers, and beach-goers, who cope with fewer beach closures; and boaters and fishers who experience safer, less contaminated water and fish. In addition, thermoelectric energy generators, water utilities and their customers, private well users, and waterfront property owners also benefit.
Many factors contribute to water quality, such as: waste disposal, as improper disposal of chemicals can contaminate water; fertilizer and pesticide applications can run off land into local water sources; septic systems and maintenance; land use, as more impervious surfaces can cause greater contaminated runoff; maritime transportation can result in hazardous materials releases; and policies and regulations that set thresholds for contaminants.
Examples of water quality measurements include: pollutant concentrations (dissolved oxygen, fecal coliform, pH, biochemical oxygen demand, temperature change, total phosphate, nitrate, turbidity, and total solids); water clarity (Secchi Depth); water quality ladders, and rating scales.
Some examples of water quality impacts include:
- Human health: Water quality issues can cause a range of impacts, from cancer to gastronomic issues and transmissible diseases.
- Economic: Impaired water quality leads to increased costs to make water drinkable, boatable, and or swimmable. For community water systems, treatment costs rise.
- Indirect: When ecosystems are affected, this reduces other benefits such as wildlife and fish abundance and biodiversity.
Economic valuation methods used in water quality studies include: actual market pricing, revealed preference (hedonic, travel cost, averting behavior), and stated preference (contingent valuation). Meta-analysis has also been used to summarize water quality values from original valuation research studies.
Great Lakes Water Quality Valuation Studies
Pollutant Concentration
| Publication | Geography | Change Valued | Value Estimate ($Year) | Valuation |
|---|---|---|---|---|
| Brox, J.A., R.C. Kumar, and K.R> Stollery, (1996); Brox, J.A., R.C. Kumar, and K.R. Stollery (2003) | ON | Several valuation scenarios including hypothetical water quality improvements from below provincial standards, to meeting those standards. | Estimated mean willingness-to-pay/willingness-to-accept ranged from $4.56- $9.42 per household, per month ($1994 CAN). | Contingent valuation |
| Caudill, D.D. (1992) | MI | The baseline scenario was current ground water quality, the alternate scenarios were a groundwater and a well protection policy. | Estimated mean annual household willingness-to-pay ranged from $34.11- $64.52 ($1990). | Contingent valuation |
| Cho, Y. (1996) | MN | The baseline level of provision was current levels of copper, sulfates, iron, and hardness (calcium and magnesium buildup). The alternate level of provision was levels below U.S. EPA's standard levels. | Estimated annual mean willingness-to-pay ranges from $32.16 to $43.56 to reduce iron levels, from $25.44 to $36.00 to reduce sulfate levels, from $33.36 to $47.88 to reduce hardness levels, and from $25.08 to $35.88 to reduce copper levels. Aggregate values are available. ($1995) | Contingent valuation |
| Cho, Y., K. W. Easter and Y. Konishi (2010) | MN | Change in arsenic concentration from 50 micrograms to 10 micrograms per liter. | Estimated median willingness to pay ranged from $6 to $23 annually per household ($2007). | Contingent valuation |
| Epp, D. J. and K. S. Al-Ani (1979) | PA | Change in residential property value associated with one point increase in the mean pH level of 5.5 | For the pooled sample model, one point increase in the mean pH level can be expected to yield increase in mean sales value of a property by $653.96 ($1972). | Hedonic property |
| Giraldez, C. and G. Fox (1995) | ON | Reduction in agricultural nitrate emission from 147 kg/ha to 140 kg/ha (16.67%) sufficient to achieve the 10mg/L acceptable standard. | The estimated annual benefits of improved ground water quality range from less than $1,000 to more than $30,000 ($CAN). | Averting behavior |
| Henry, J.J. et al. (1991) | IL, IN, ME, MA, MI, NH, NY, PA, VT | Actual road salt application | The nine states spent about $1.8 million in prevention and remediation of drinking water contaminated by road salt (2,250,000 tons). In Indiana $175,000 was spent (240,000 tons of salt spread annually) ($1989). | Actual expenditure |
| Konishi, Y. and K. Adachi (2010) | MN | Change in arsenic concentration from 50 micrograms to 10 micrograms per liter of drinking water. | Estimated mean willingness-to-pay ranged from $47.5 to $520.8. ($2007) | Contingent valuation |
| Laughland. A.S., L.M. Musser, W.N. Musser and J.S. Shortle (1993) |
PA | The baseline provision is drinking water quality prior to contamination by Giardia lamblia, and the alternate level of provision is drinking water quality after the contamination incident. | Estimated mean averting costs per month for boiling ranged from $16.50 - $51.18; the mean averting costs per month for purchasing water ranged from $21.31 - $27.88; the averting costs of hauling water per month ranged from $7.01 - $14.02. Aggregate values are available ($1989). | Averting behavior |
| Mathews, L. G., et. al (2002); Mathews, L.G., et al. (1999) | MN | A hypothetical 40% reduction in phosphorus pollution in the Minnesota River. | Estimated household willingness-to-pay was $140 annually. Aggregate values are available ($1997). | Combined revealed and stated preference (Travel cost and Contingent Valuation) |
| Musser, W.N., et. al (1992); Laughland, A.S., et al. (1996) | PA | The baseline level is based on having to boil or haul safe drinking water from alternative sources. The alternate scenario is Giardia free drinking water. | Estimated mean WTP was $17.94, $16.51, and $11.40 for water from Bellefonte, Milesburg, and Boggs respectively. Estimates are available contingent on averting behavior undertaken. Estimated averting costs savings ranges from a low of $14.14 to $36.33 ($1988-1989). | Combined revealed and stated preference (Averting behavior and Contingent valuation) |
| Poe, G. L. and R. C. Bishop (1999) | WI | A 25% reduction in health risk exposures to nitrate-contaminated groundwater | Estimated incremental benefits reached a maximum of $412/year at an intermediate nitrate exposure level, and then decline. | Contingent valuation |
| Poe, G.L., and R.C. Bishop (1992) | WI | The study presents a scenario with and without a groundwater protection program for the wells in Portage County that will keep nitrate levels below government health standards. | Estimated mean and median willingness-to-pay values per household per year were $269.3 and $265.5 respectively (no information provided) and $414.8 and $400.3 (information provided) | Contingent valuation |
| Randall, A. and D. DeZoysa (1996) De Zoysa, A.D.N. (1995) |
OH | Reduction in the range of groundwater nitrate levels from 0.5-3.0mg/liter to 0.5-1.0mg/liter in the Maumee River basin. | Median willingness-to-pay for groundwater improvement program in a one-time payment was $20.80. Aggregate and spatial values are available ($1994). | Contingent valuation |
| Stumborg, B.E., K.A. Baerenklau, and R.C. Bishop (2001) | WI | Reducing the phosphorus load Lake Mendota receives by 50% per year for 10 years; the frequency of algal blooms in Lake Mendota from one out of every two days to one out of every five days. | Mean sample household present value willingness-to-pay of $353.53, aggregate estimates are available ($1990). | Contingent valuation |
| Welle, P. G. and J. B. Hodgson (2011) | MN | Water quality improvement program | Estimated mean willingness-to-pay for water quality improvement program was $145 per household per year (combined model), $296 (Margaret-Gull Chain), $11 (Sauk Watershed). | Contingent valuation |
| Wright, C. (1988) | MI | The baseline level of provision is groundwater that will be contaminated in five years and unfit for drinking without treatment. The alternate level of provision is not contaminated water that can be consumed without treatment. | Annual household willingness-to-pay to protect groundwater quality ranges from $296 to $696. Aggregate results are available. | Contingent valuation |
Water Clarity
| Publication | Geography | Change Valued | Value Estimate ($Year) | Valuation |
|---|---|---|---|---|
| Ara, S., E. Irwin and T. Haab (2006) | OH | One count changes in fecal coliform and one centimeter changes in water clarity using Secchi disk depth readings | Measured at the average house distance to a beach, the marginal implicit price for a one count change in fecal coliform was $1.94 while a one kilometer change in water clarity was $21.54. Net benefit estimates are available ($1996). | Hedonic property |
| Krysel, C., E. M. Boyer, C. Parson and P. Welle, (2003) | MN | Change in water clarity by 1 meter. | For one meter increase in water clarity, the price change ranged from $3.14 to $423.58 . For one meter decrease in water clarity, the price change ranged from $1.43 to $594.16 ($2003). | Hedonic property |
| Moore, R., et al. (2011) Moore, R. et al. (2007) |
WI | An improvement in water clarity in lower Green Bay from the current condition which range from 0.5 feet of clarity to over 11 feet of clarity to a four foot improvement in clarity throughout the bay. | The predicted WTP values varied ranging from $0.0 - $640.59. Aggregate value estimates are available. | Contingent valuation |
| Steinnes, D.N. (1992) | MN | An increase in water clarity, measured as the number of feet below the water surface that a Secchi disk reading can be observed. | Each additional foot increases the average price per lot by $206.00, the total price of all lots on the lake by $3,383.79, and the average price per foot of water frontage by $1.99. | Hedonic property |
Recreation Support
| Publication | Geography | Change Valued | Value Estimate ($Year) | Valuation |
|---|---|---|---|---|
| Croke, K., R. Fabian and G. Brenniman (1986) | IL | Water quality ladder (outings, boating, fishing) | Estimated mean willingness-to-pay for an improvement in water quality to allow outings was $33.49; for an improvement in water quality to allow outings and boating was $37.76; and for improvements in water quality to allow outings, boating, and fishing mean $46.05. | Contingent valuation |
| Desvousges, W.H., V.K. Smith, and M.P. McGivney (1983) Desvousges, W.H., V.K. Smith, and A. Fisher (1987) Smith, V.K., W.H. Desvousges and M.P. McGivney (1983) |
PA | The baseline is the current condition of the water which is described as suitable for boating considering that it is at a 45% level of saturation with regards to dissolved oxygen. The magnitude of change is an improvement in water quality to a level that would be suitable for either game fishing (64% level of saturation with regards to dissolved oxygen) or swimming (83% level of saturation with regards to dissolved oxygen). | The range in values for nonuses and users combined are as follows: i) a decline in quality from boatable to unsuitable for any activity, a range of $29 to $57.40; ii) an improvement in quality from boatable to fishable, $15.90 to $36.90 iii) an improvement in quality from fishable to swimmable, $8.70 to $18.80, and iv) an improvement from boatable to swimmable, $25.10 to $60.20. (annual values per user) ($1981). Travel cost estimates: avoiding decline in water quality from boatable to unsuitable for any activity $82.65; improvement in water quality from boatable to fishable $7.01; improvement in water quality from boatable to swimmable $14.71 ($1981). The study found that an improvement in water quality from being suitable for boating to being adequate for game fishing was valued between $0 and $8.60 per household per season. For an improvement in water quality from being suitable for boating to being adequate for swimming, it was valued between $0 and $18.30. The highest roundtrip travel cost incurred by a respondent amounted to $22.65 ($1977). | Travel cost method and contingent valuation |
| Dupont, D.P. (2003) | ON | Improvement in water quality from a boatable to fishable to swimmable level. | Willingness-to-pay was estimated to range from $12.30 to $57.57 per household per year for swimming, from $6.28 to $33.13 for boating, and from $8.36 to $30.23 for fishing. ($1995 CAN) | Contingent valuation |
| Ecologistics Limited (1990) | ON | The baseline was the current water quality at study site beaches. The alternative is five changes in water quality: very poor; poor; fair; good and very good. | The travel cost model estimated the annual value of a water quality change from existing to very good at $61 per household. That same estimate for contingent valuation was $62. Aggregate values are available ($1988 CAN). | Travel cost method and contingent valuation |
| Hitzhusen, F.J., S. Lowder and R. Ayalasomayajula (2000) | OH | Improvements in water quality through various proposed Muskingum River corridor improvements such as repairing the locks and dams, residential septic systems, extending an existing bike trail, and implementing zoning. | The average annual willingness-to-pay for the proposed improvements, ranged from $0.86 to $2.07 per individual. Aggregate values are available ($1999). | Actual expenditure/market price of output, hedonic property, contingent valuation |
| Lindsey, G., Robert G. Paterson, and Michael L. Luger (1995) | MD, WI, NC | Improvement programs aimed at securing safe waters for fishing and swimming. | In Wisconsin the annual mean willingness-to-pay for improvement programs that would clean up waters safe enough for swimming and fish habitat was $76 ($1989). | Contingent valuation |
| Meyer, A. (2013) | MN | Percentage of the Minnesota River) basin cleaned (50, 60, and 70%). To high enough water quality to 1) maintain healthy populations of aquatic organisms, and 2) be suitable for swimming and other water recreation. The baseline level was the current situation of the basin, where 0% of surface waters are considered clean. | The annual mean willingness-to-pay per person over a five year period for an additional 1% of river basin cleanup was $8.86. The present value of a five year cleanup project was $35.38 if the project started immediately and $19.45 if the project was delayed 5 years. | Contingent valuation |
| Mitchell, R.C., and R.T. Carson (1986) | PA | Changes in water quality from boatable to fishable and from fishable to swimmable levels. | The authors estimate that the value of an incremental change in water quality from boatable to fishable levels is $79. Aggregate values are available. | Contingent valuation |
| Montgomery, M. and M. Needelman (1997) | NY | Three policy scenarios to eliminate toxic contamination in New York fish were investigated: (1) Eliminate toxic contamination in all lakes; (2) Raise pH in acidic lakes so that none is threatened or impaired; and (3) Carry out scenarios 1 and 2. Two additional alternative scenarios were analyzed: (1) that all toxic lakes are closed to fishing and (5) that all acidic lakes are closed to fishing. The baseline scenario is without the policy. | The compensating variation per capita for eliminating toxic contamination is about $0.45 per day and $63.25 per season. Closing toxic sites to fishing generated the largest per capita benefit ($0.62/day and $87.09/season) among the alternative policy scenarios. Eliminating acidity so that no lake or pond is threatened or impaired generated a per capita benefit of only $0.10 per day or $13.82 per season. The benefit of closing acidic sites is $0.10/day and $14.85/season ($1989). | Combined revealed and stated preference |
| Ochs, J., and R.S. Thorn (1984) | OH | Improvement in the Mahoning River's water quality so that the Ohio Water Quality Standard is satisfied. | The total value of a fishing day is $85. Aggregate values are available. | Travel cost method |
| Parsons, G.R. and M.S. Needleman (1992) | WI | The baseline level of provision was the current level of water quality. Four alternate levels of provision were valued: 1) an improvement of all study lakes to a near pristine quality (93 percent of lakes affected); 2) a modest improvement of only the dirtiest study lakes (16.3 percent of lakes affected); 3) a degradation of all study lakes to the lowest quality (83.7 percent of lakes affected); and 4) a modest drop in water quality of only the cleanest lakes (7.9 percent of lakes affected). | The welfare gain per individual per trip for attaining a pristine level of water quality in Wisconsin lakes ranged from $1.50 to $47.50. ($1978) | Travel cost method |
| Patrick, R., J. Fletcher, S. Lovejoy, W. Van Beek, G. Holloway, and J. Binkley (1991) | IN | The baseline condition was the current level of total suspended solids (TSS) and other pollutants in Indiana streams and lakes used for recreational fishing. The following magnitudes of change were examined: i) a one, five, ten and fifteen percent increase in the total suspended solids (TSS), and ii) similar percentile increases in TSS plus other pollutants. | Sample mean estimates for individual anglers were: 1% Total Suspended Solids (TSS) reduction $0.52; 5% TSS reduction $2.63 ; 10% TSS reduction $5.26; 15% TSS reduction $7.92 ; 1% reduction in TSS and other pollutants $0.53; 5% reduction in TSS and other pollutants $2.66; 10% reduction in TSS and other pollutants $5.32; 15% reduction in TSS and other pollutants $7.99. | Travel cost method |
| Phaneuf, Kling, Herriges (1998) | Great Lakes | Scenario (1) 20% reduction in toxins at all sites (2) Loss of southern Lake Michigan for angling entirely. | Average of $35.85 per angler per season gain from scenario (1). For scenario (2) range of $98.34 - $849.09 per angler/season. The high range includes non-use but not existence values. | Travel Cost Method |
| Ribaudo, M. O. and Donald J.E. (1984) Ribaudo, Marc, C. Edwin Young, and Donald Epp. (1984) |
VT | Water quality in St. Albans Bay improves so it would be as clean as in other areas of Lake Champlain that the respondents were familiar with. | For current users of St. Albans Bay, the mean level of annual benefits for an improvement in bay water quality was $123 per person per year. For former users, the mean level of annual benefits attributable to an improvement in St. Albans Bay water quality was $97 per person per year. ($1982). | Travel Cost |
| Young, C.E, and F.A. Teti (1984) | VT | The baseline condition was shoreline property values along St. Albans Bay, which is impacted by extensive macrophyte growth such as Eurasian milfoil, water chestnut and floating yellow heart that thrived in shallow shoreline waters. The extent of change modeled was shoreline property values along cleaner lake water in adjacent Georgia county. | The property value losses were imputed by the water quality rating variable in the hedonic price model. For a unit change in this variable, the marginal sales price increased by $1,417. Aggregate values are available. | Hedonic property |
| Zegarac, M. and T. Muir (1998) | ON | An increase in harbor recreational opportunities created by the construction of several parks, a pier, development of an island as well as improvements in lake water quality from boatable to swimmable. | Property values close to the harbor rfront increased in value when compared to similar properties a specified distance away. For example, this difference increased from statistically similar property values in 1983 to a difference of $8,495 in the 1994-1996 period. | Hedonic property |
Water Quality Rating Scale
| Publication | Geography | Change Valued | Value Estimate ($Year) | Valuation |
|---|---|---|---|---|
| Bouwes, N. W. and R. Schneider, (1979); Caulkins, P.P., Bishop, R.C. and Bouwes, N.W. (1986) | WI | The study measured water quality using LCI (Uttormark’s Lake Condition Index). | Estimated $38,964 loss in consumer surplus from a water quality deterioration of 7 points on the LCI scale. | Travel cost method |
| Farber, S. and B. Griner (2000) | PA | A stream quality improvement from moderately polluted to unpolluted for the Loyalhanna Creek sub-basin (stream A) and from severely polluted to either moderately or unpolluted for the Conemaugh River (stream B). | The marginal valuations for improvement in stream A from moderately polluted to unpolluted ranged from $26.63 to $51.35. For stream B, marginal valuations for improvements from severely to moderately polluted ranged from US$35.90 to US$67.64 and US$75.63 to US$112.44 to return to its unpolluted level. The values represent household willingness to pay per year for five years ($1996). | Conjoint Analysis |
| Lant, C.L. and R.S. Roberts (1990) Lant, C.L., and G.A. Tobin (1989) |
IA, IL | Discrete improvements in river quality, from poor to fair, fair to good, and good to excellent, were considered. | The study estimated the combined mean willingness-to-pay for an improvement from poor to fair at $68.11, from fair to good: $84.26, and from good to excellent: $84.73. Estimated annual willingness-to-pay for an increase from poor to excellent water quality ranged from $166.73 for the Edwards basin to $281.73 for the Wapsipinicon basin. Additionally, the value of wetlands per acre was estimated ($1987). | Contingent valuation |
| Luzadis, V.A. (1997) | NY | Protection of water quality from forestry non-point source pollution. | Forest owners were willing to pay $9,000 - $10,000 to protect water quality in the New York City watershed ($1996). | Contingent valuation |