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Methods Development for Environmental Control Benefits Assessments: Volumes I-IX (1985)

Paper Number: EE-0278A-J

Document Date: 09/01/1985

Author(s):  University of Wyoming

Subject Area(s):  Economic Analysis, Air Quality, Benefits Analysis, Human Health Benefits, Ecological Benefits, Cost Effectiveness, Distribution and Equity

Keywords: Economic Analysis, Air Quality, Benefits Analysis, Human Health Benefits, Ecological Benefits, Cost Effectiveness, Distribution and Equity

Abstract: 

A series of reports were prepared under a grant awarded to the University of Wyoming for the U.S. Environmental Protection Agency focusing on estimating the benefits of pollution control.  Most of the reports prepared under this grant are available for downloading, unless otherwise noted.

Volume I: Measuring the Benefits of Clean Air and Water.  This volume examines the state of the art regarding benefits assessment, including such tools as bidding games, surveys, property value studies, wage differentials, risk reduction evaluation, and mortality and morbidity cost estimation. It discusses methods for quantitatively estimating benefits derived from the maintenance or improvement of air and water quality. It is a nontechnical discussion of the work of a number of scholars located at Resources for the Future, the University of Wyoming, the University of New Mexico, and the University of Chicago. The focus of these efforts was to develop improved methods for the economic evaluation of environmental improvements or maintenance. The study centered on two broad approaches. The first involves methods based on actual behavior with respect to environmental goods. These include travel to recreational opportunities of varying quality, prices paid for houses in environments of different quality, decisions about farm crops depending upon how they are affected by air pollution. The latter are benefits to people who have a preference for environmental quality in situations in which they do not actually participate. For example, people may value good water quality for the nation as a whole even though they do not recreate in natural waters. (Author: Kneese, Allen V.)

Volume II.  Six Studies of Health Benefits from Air Pollution Control.  The six studies contained in this volume all aim to increase our understanding of the health benefits of air pollution control. The first two studies attempt to determine the relationship between air pollution and mortality. Three of the studies examine morbidity. The five statistical studies presented in this volume show: 1) large associations between health and current levels of air pollution are not robust with respect to statistical model specification either for mortality or morbidity and 2) significant relationships, mostly small, do occasionally appear. However it should not be overlooked in light of the rather ambiguous evidence presented in this volume, that all studies to date have only looked for health affects associated with current air pollution exposures, not at any possible association between current health affects and long term cumulative air pollution exposures. (Authors: Crocker, Thomas D.; d'Arge, Ralph C.; Schulze, William D.; Ben-David, Shaul; Atkinson, Scott E.; Pazand, Reza; Anderson, Curtis L.; Buechley, Robert
Cropper, Maureen L.; Eubanks, Larry; Thibodeau, Lawrence A.)

Volume III.  Five Studies on Non-Market Valuation Techniques.  This volume presents analytical and empirical comparisons of two alternative techniques (hedonic pricing versus survey techniques) for the valuation of nonmarketed goods. Commmon objections about using survey approaches are survey bias, and issues with replication and validation. After an introductory chapter (Chapter 1), the report is divided into five papers or chapters. In the first paper (Chapter 2), the researchers evaluate the results of six recent experiments which have utilized the survey approach and find that survey techniques are consistent with demand theory. In the second paper (Chapter 3), the researchers compare survey results in the South Coast Air Quality basin with a hedonic property value study in order to validate results obtained and they determine that there was no bias in their survey results. In the third paper (Chapter 4), they discuss the advantages of the survey approach, especially in cases where the good valued is hypothetical and the market does not yet exist. The fourth paper (Chapter 5) reports the results of a cost/benefit study of on-road mobile emissions reductions in four counties (Los Angeles, San Bernadino, Riverside, and Orange) in Southern California. The benefits are calculated using housing value differentials attributed to air quality. In the last paper (Chapter 6), they report on some exploratory estimates of the effects of changes in air pollution levels on offered wage rates. They discuss whether this information can be used to generate a national benefit estimate and discuss using a survey to obtain visibility improvements to such a national estimate. (Authors: Brookshire, David S.; Crocker, Thomas D.; d'Arge, Ralph C.; Schulze, William D.; Thayer, Mark A.; Gerking, Shelby D.)

Volume IV.  Measuring the Benefits of Air Quality Improvements in the San Francisco Bay Area: Property Value and Contingent Valuation Studies. One purpose of this study is to test the methods developed in the Brookshire et al. (1979) study of air pollution values for Los Angeles in another area, namely the San Francisco Bay Area. In addition, the authors test whether certain modifications of the methods used will effect the conclusions obtained. As in the Los Angeles study, this study includes two different methods for determination of values related to air quality changes. One major study uses property value data to obtain value estimates from actual market transactions. The other study uses survey information; here, value information is obtained from self-reports of behavior in a hypothetical situation.  (Authors: Loehman, Edna; Boldt, David; Chaikin, Kathleen)

Volume V.  Measuring Household Soiling Damages from Suspended Air Particulates: A Methodological Inquiry Report. As measured by the "frequency" approach to estimating household cleaning costs, annual household cleaning costs, annual household soiling damages in the Pennsylvania-New Jersey-Delaware area range from $762 per household (1980 dollars) to $1,386 per household in "do-it-yourself" households as air particulate concentrations range from 40 micrograms per cubic meter to 123 micrograms per cubic meter, such damages for households that hire others to perform household cleaning tasks range from $1,531/household to $2,683/household in the same range for particulate concentrations. Marginal household soiling damages attributable to air particulates are estimated at 46.63/household per micrograms per cubic meter.
The willingness to pay approach to estimating particulate-related household soiling damages is found to be infeasible. Average annual contingent valuations related to the total elimination of air particulates were some $7.32/household in the Los Angeles area and $2.68/household in the Philadelphia area.  Individuals in the Los Angeles and Philadelphia areas indicated a maximum willingness to pay of $32.83/month and $12.59/month, respectively, for the elimination of all air pollutants. These total bids are allocated to pollution effects as follows: 66-76% health; 13-18% visibility; and 0-16% household soiling.  A modified frequency approach to estimating household soiling damages would likely be very effective in terms of providing consistent estimates.  (Authors: Cummings, Ronald G.; Burness, H.S.; Norton, R.D.)

Volume VI.  The Value of Air Pollution Damages to Agricultural Activities in Southern California.  This study explores the impact of adjustments in output and input prices, and cropping and location patterns that agricultural markets and growers make in response to altered levels of air pollution, which are largely neglected in most studies of the impacts of pollution on agriculture. The report contains an introduction (Chapter 1) and three essays. The first essay (Chapter 2) employs a mathematical programming technique to assess 1976 air pollution-induced losses to fourteen of southern California's most highly valued annual vegetable and field crops. The second (Chapter 3) provides estimates of the losses in earnings that workers in citrus groves bear from the oxidant air pollution to which they are exposed in their work environments. The third (Chapter 4) provides empirical evidence of a moderately strong positive association between a frequently employed measure of the risks faced by agriculturists and increases across space and time in southern California air pollution. (Authors:  Crocker, Thomas D.; Thanavibulchai, Narongsakdi; Horst, Jr., Robert L.; Adams, Richard M.)

Volume VII.  Methods Development for Assessing Acid Deposition Control Benefits. The basic purpose of this report is to suggest those types of natural science research that would be most helpful to the economist faced with the task of assessing the economic benefits of controlling acid precipitation. However, while trying to formulate these suggestions, inadequacies in the supporting material the ecologist could offer the economist, and in what the economist could do with whatever the ecologist offered him, became apparent. Therefore part of the effort was devoted to initial development of a resource allocation process framework for explaining the behavior of ecosystems that can be integrated into a broadened benefit-cost analysis which captures traditional ecological concerns about ecosystem diversity and stability. The intent was to make a start at providing a basis for the ecological and the economic disciplines to ask better-defined questions of each other. (Authors: Crocker, Thomas D.; Tschirhart, John T.; Forester, Bruce A.; Adams, Richard M.)

Volume VIII. The Benefits of Preserving Visibility in the National Parklands of the Southwest.  This study was designed to measure the economic value of preserving visibility in the National Parklands of the Southwest. This was done using survey techniques, which revealed that Americans place great value on the preservation of air quality in the Parklands Region and that this valuation is not localized to residents of the Southwest. Further, the report found that pure existence value overwhelms a substantial user value for the National Parks of the region. (Authors: Brookshire, David S.; Schulze, William D.; Ben-David, Shaul;
Walther, Eric G.; Kelley, Karen; Thayer, Mark A.; Whitworth, Regan).

Volume IX.  Evaluation of Decision Models for Environmental Management.   Report centers on how the Environmental Protection Agency can use decision models for environmental management with a focus on those that allow for the consideration of all tradeoffs. Section 2 contains some abstract discussion of models and a survey of some candidate models for environmental policy. Section 3 describes more fully three models that are thought to have potential for environmental management. The theoretical foundations and operational linkages of these models to the environmental problem are described. Section 4 concludes with remarks about the interrelationships among the recommended models, the information requirements of each, the satisfaction of model criteria by each and the areas thought promising for future research.(Author: Sorrentino, John).

Volume X. Executive Summary. The studies summarized by this volume represent original efforts to construct both a conceptually coherent and empirically verifiable set of methods for assessing environmental quality improvement benefits. The authors believe that a conceptually and empirically simpler method than traditional - the survey method - holds great promise for expanding the range of environmental phenomena that benefit-cost analysis can reliably capture. The authors also attempt to demonstrate that some environmental phenomena, particularly those involving the human health and ecosystem effects of pollution, will require the use of more complex models and estimation procedures if consistently reliable measures intended for policy guidance are to be obtained. (Authors: Brookshire, David S.; Crocker, Thomas D.; d'Arge, Ralph C.; Schulze, William D.; Ben-David, Shaul;  Kneese, Allen V.; Cummings, Ronald G.; Loehman, Edna)

This paper is part of the  Environmental Economics Research Inventory.

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