Estimating the Benefits of Water Quality Improvements in the Upper Narragansett Bay

Abstract

An EPA-sponsored study of the benefits to Rhode Island residents of the water quality improvement in the Upper Narragansett Bay showed that the estimated annual costs ($2.9 million) exceeded the expected annual benefits ($2.0 million). That analysis evaluated only user benefits which were measured via expenditures; nonuser (intrinsic) benefits were not included. This study estimated the benefits to Rhode Island residents using the "Contingent Valuation" approach and responses from 435 residents to a 1985 survey about swimming and shellfishing. Aggregate annual benefits were estimated to be in the range of $30-60 million for "swimmable" and$30-70 million for "shellfishable" water quality, depending on the type of measure (mean or median) and survey format. Secondary objectives of the study were to test different versions of "willingness to pay" questions and compare mean and median values for measurement. Aside from payment vehicle bias, we found no evidence of serious bias.contingent valuation, pollution, water quality benefits, Environmental Economics and Policy, Resource /Energy Economics and Policy,